Q+A with Quanex | Rebounding and Rebranding
How a strong company culture and an open mind leads to growth and new opportunities
Above: George Wilson, President and CEO, Quanex
The new year always brings with it discussions about where the industry has been and where it is going, as well as providing an opportunity for new beginnings and reinventions. Quanex rebranded in 2022 and President and CEO George Wilson took the time to sit down with Window + Door to discuss its rebranding, its focus on people, its goals going forward and the industry at large.
Window + Door: What are some of the overarching trends affecting the residential fenestration industry?
George Wilson: There’s a significant economic backdrop that's impacting the entire industry. In addition to that, you have pressures now on energy costs. Our industry has a great opportunity to really help as energy costs continue to rise. Windows and doors are a big part of that energy scape and limiting the amount of energy needed in a home. For us, working on products and influencing codes and standards that improve energy performance is something that’s going to be extremely key in the future on a macro level. Quanex is very active in terms of pushing for greater thermal performance regulation, codes and standards in the industry, as well as developing products that meet that.
WD: How do you anticipate the economy will affect business and the industry?
GW: We expect a slight decrease in volume for window and door production. Although it may be a challenging 2023 and bumpy demand year, I think it will be relatively short-term. When you look at the macroeconomic conditions that exist today, we're still underbuilt in the housing market; there's not enough housing in the U.S. or Europe. The biggest challenge that's putting pressure on that is rising interest rates and the price of homes are at a high level. There has to be a rebound. We believe the housing market could lead an economic recovery. But I do think 2023 will be a challenging year for the industry. We're preparing for that.
WD: How have you prepared for anticipated business challenges?
GW: Even in a down year, we look at it as an opportunity to regroup and focus on ways to improve. Sometimes a breather in terms of demand allows you to reinvest time, energy and money back into your own business. Luckily, we're in very strong financial position. We've been focused on improving cash flow, safety metrics and operating metrics to be able to serve our customers. It's also positioned us to weather any sort of storm and reinvest in our people at a time when it is slow. Companies that haven't been able to prepare for that will be challenged.
WD: Quanex rebranded from Quanex Building Products to Quanex. Tell me how Quanex hopes to grow within the new branding.
GW: We're in the process of trying to get everyone to understand, both internally and externally, that Quanex is a manufacturing company. We're not a window and door company. We're not a cabinet company. We're a manufacturing company that has a unique set of core competencies that can serve many markets. Taking the “Building Products” off the Quanex name doesn't change anything core to our existing business, but what it does do is open our mindset to not narrowly focusing on certain areas. We're going to seek out opportunities based on our core competencies.
On a go-forward basis our growth strategy will be built on our existing manufacturing processes. We will look to expand organically and inorganically, through investment and acquisition. We're starting to invest a significant amount of money in research and development, such as in our R&D facility in Akron. We continue to invest in our R&D efforts expanding capabilities and adding resources in our Akron, Ohio, location.
My vision three years from now is that you'll see something really special. It's a process. It's important we empower our chemists, development experts and salespeople and let them create. It will take time. There will be wins and losses. Every opportunity is a learning experience and I think that's exactly what we're doing.
WD: Tell me about the people culture at Quanex and the importance of investing in your employees.
GW: Any successful business has to start with the culture and the people it employs. Over the past three years, I've tried to elevate culture as being a top priority, alongside safety. It's really built around principles of empowering our people, making sure that we tap into their energy and resources, making sure everyone in the organization understands what we're driving to and how we're going to get there, and probably most importantly, that it's okay to fail as long as we learn and grow from those mistakes.
When you're able to do that, it creates a special environment. It takes a long time; we're not where we want to be, but you can feel the difference in our culture. I don’t think it's coincidence we've had three record years in almost every metric. That's truly because we have amazing people who are aligned and marching toward the same goal.
WD: That culture also extends into the communities in which you work. How does Quanex engage with the communities?
GW: The new generation of workers are more engaged in trying to do the right thing around the world. We as a company want to exhibit those same sorts of beliefs. Through the Quanex Foundation and volunteer activities at our facilities around the globe, we've become an even more caring and giving company, and I'm proud of the progress we've made. It started a little bit during COVID. We donated almost $1 million in 2020 back into all the communities in total from our Foundation and we have continued since then to focus on ways the Foundation can continue to help our communities through these tough times.
Our plants are located in many small communities where we have an opportunity to make a big difference. I often hear stories about our team members making big contributions of their time, their talents or their resources to help others. We challenge ourselves to consider how we can change the world. Why not Quanex? Why not now? I think it's becoming successful.
WD: This community service mindset also lends itself to Quanex’s tagline “A Part of Something Bigger.”
GW: When we put that message out there it really resonated to almost everything we do. Quanex can be a part of something bigger in how we serve our customers. The products we make are a part of something bigger.
Part of something bigger in terms of our shareholders: We've been able to add significant value in terms of the share price and will continue to push for that.
Part of something bigger with people: I'm just one employee in an organization of almost 4,000 people. You're always a part of a bigger team. That's so important. You're never alone; you're never on an island.
And then in our communities: We're so blessed to have what we have. Be a part of something bigger and make a difference. That's what we've been focused around. It is something that's near and dear to my heart and something we've made a priority at Quanex.
WD: What is the focus in 2023 and what can we anticipate from the company?
GW: In the past five years our focus has been more internal with developing systems and making sure our internal house was in order. We improved our safety, quality and delivery because you can't grow without those basic fundamental building blocks. You have to be able to serve your customers to be able to grow. We've stabilized our supply chain. We've localized everything. We've minimized risk to our customers. I think we've become a very safe pair of hands for our customers. Now the focus is on growth. You will see investment in growth, research and new product development, as well as looking and expanding our opportunities through acquisition.