2001 Annual Report - Investor Relations - Sherwin Williams

Consumer segmentThe three operating units within our ConsumerSegment – the Consumer Division, the Wood Care Divisionand the Diversified Brands Division – producesome of the most powerful brand names in the coatings industry.Private label manufacturing and licensed brand programs haveextended our reach among home centers, hardware stores, massmerchandisers, industrial distributors and independent paint storesthroughout North America.CONSUMER22% of Net External SalesConsumer Division – With 10 manufacturing facilitiesand eight distribution centers, the Consumer Divisionhas the resources to serve both external customers andSherwin-Williams paint stores. We manufacture and marketwell-known brands like Dutch Boy ® , Pratt & Lambert ® andMartin Senour ® . We also supply private label products to leadingretailers.Successful product launches in 2001 included the Dutch Boy ®Dimension ® line of products for faux decorating; the MarthaStewart One Coat Program; and the Pratt & Lambert ® Ovation line of faux decorating products.The Consumer Division launched severalkey operations initiatives designedto reduce costs and maximize efficiencies.These include a suppliercollaboration program that relies onclose interaction with raw materials suppliers,a purchasing program thatleverages our buying power, and a supplierdiversity program.We also implemented Six Sigma, astatistical approach to process improvement,as part of our OperationalExcellence initiative. We are committedto establishing measurableoperational procedures and a cultureof continuous improvement.Wood Care Division –Headquartered in Upper SaddleRiver, N.J., the Wood CareDivision is responsible for our Minwax ® , Thompson’s ®Water Seal ® , Formby’s ® , DuraSeal ® and Fabulon ® productlines. Constant product innovation and technologicaladvancement differentiates our Wood Care products andhelps build and strengthen our brands.Our products are developed for performance, convenienceand lasting beauty. In 2001, we introduced Minwax ®Stainable Wood Filler, an interior/exterior wood filler forwood finishing repairs. It is a latex formula that stains canpenetrate as well as natural wood. We also added Minwax ®Super Fast-Drying Polyurethane for Floors, an oil-based protectiveclear finish designed for use with hardwood floors.Because of its fast drying time and formulation that doesn’trequire sanding between coats, consumerscan begin and finish aproject in a single day.Diversified Brands Division– The Diversified BrandsDivision produces aerosol paintsand chemicals, paint brushes androllers, and caulks and sealants. Ourbrands include Krylon ® and Dupli-Color ® spray paints; Rubberset ® andSherwin-Williams ® brushes androllers; and White Lightning ® caulksand sealants. Additionally, we supplyprivate label spray paint toseveral mass merchandisers.We are the largest manufacturer andmarketer of aerosol paint in the country. In2001, we launched several key products intothis market. Dupli-Color ® Mirage ® is a multicoloreffect spray paint for automotive retailuse that is gaining popularity among do-it-yourselfersand professionals alike. The Krylon ProductsGroup introduced several new products under theKrylon ® brand for the craft market and developed targetedprograms for contractors.We also launched a complete line of extension poles foruse with our paint rollers.11