In the 1930s, Glenn Morthland patented a membrane for builders to install beneath showers or tiles to keep water from seeping through and causing damage. This was the genesis of Los Angeles-based Compotite Corp., which Glenn’s granddaughter Joan now runs.
The company still makes the product, but uses different materials than in the old days.
President Joan Morthland Hutchins said Compotite has achieved growth and adapted to market changes by staying small and farming out the vast majority of its operations.
She told interviewer Wade Daniels how this has been accomplished.
Compotite Corp. has a total of eight employees, but our company makes building materials that are used all over the country.
The original manufacturing was done in the back warehouse of our facility on Glendale Boulevard in Los Angeles. That stopped probably back in the 1950s around when my father took over the company from my grandfather. I took over in 1988.
We do business nationwide by contracting out everything from manufacturing and sales to shipping. Some companies might see advantages in growing their offices and operations. For a small company like us, contracting out work has meant far greater flexibility to adjust to changes in technology and competition.
Our main product is the Compotite Shower Pan, which is a membrane that goes under tiles or showers to waterproof the strata underneath, so the wood and other materials don’t get ruined. The material used for the product has changed in years past and may change in coming years. If we were fully invested in the machinery needed to make the product which costs around $20 million that would be a big problem.
Contracting also gives us greater flexibility in developing new products. For example, a sales rep mentioned that builders sometimes complain that cement slabs cracking underneath tiles causes the tiles to crack. We set out to develop a new product for that, a crack isolation membrane.
We came up with some specifications with help from the Ceramic Tile Institute that’s an industry association. Compotite took those performance requirements to a number of manufacturers and found one that could really meet them. We contracted with them and introduced the product in 1992. It’s called Composeal Gold. Those are our two main products, along with a few installation accessories.
That was a big boost, because since then with the help of some good sales people we contract with our revenues have gone from $1.7 million in 1992 to $3 million this year.
We have also looked at hiring our own sales reps, but we contract with 26 agencies across the country. This not only makes things easier in terms of bookkeeping for us we pay them a straight commission but I think it helps our sales. The sales reps usually have our products and a couple other lines, and people who contact them for the other products then become interested in ours.