Commercial roofer CentiMark focuses on internal growth, not mergers

Tired of working for someone else, Edward B. Dunlap took a risk in the late 1960s that paid off.

He put $1,000 in seed money into a company that has grown to become the largest commercial roofing and flooring contractor in North America, generating $545 million in revenue last year.

Dunlap was a roofing company salesman when he took the money from a part-time industrial cleaning products business that he ran from his basement to start Northern Chemical Co. He changed the name of the Cecil company in 1987 to CentiMark Corp., which now employs about 3,500 employees, 250 of them local, in 80 offices in the United States and Canada.

“We went ... for a unique system. Where most contractors in the roofing business follow the same process, which is good, we wanted to come up with something that allowed us to cut our own little niche of the marketplace,” said Dunlap, CentiMark's CEO.

The niche is replacing roofs on commercial buildings — a piece of the business that isn't as affected by economic conditions as new construction projects, said Dunlap's son, Timothy, the company president.

CentiMark grew by expanding internally, which is harder than growing through acquisitions but ensures consistent, quality products, Timothy Dunlap said.

He compares the company to a restaurant chain with the same menus and food preparation at every location: “We liken ourselves to the McDonald's of the roofing industry.”

CentiMark expects revenue to grow at least 5.5 percent this year to $575 million, he said. Commercial re-roofing accounts for about 66 percent of total revenue.

Focus on the future

CentiMark isn't ready to curb its growth. During the next five years, it intends to push in several areas: the Canadian market; its service division; the flooring division; and national accounts with hotel chains, stores and other entities.

“It is to their advantage to work with a company where they know they'll get consistency with workmanship and customer service and pricing,” CentiMark spokeswoman Kathy Slencak said. Among Centi-Mark's clients are The Salvation Army, WPS Office Solutions and a number of Fortune 100 companies, she said, though contracts prevent disclosing their names.

CentiMark is roofing the Strip District building occupied by WPS Office Solutions, a Hagerstown, Md., company that sells technology to other companies, said Shawn Madden, its vice president of sales. “They're good. They're responsible. They come out and do a complete job,” he said of CentiMark.

Another goal for the company is to increase its cross-selling of roofing and flooring products to its customer base, Timothy Dunlap said.

Ed Dunlap hopes the company reaches $1 billion in sales in the next five or six years.

“We need to expand our sales force, expand areas that we operate in. We'd like to get (an office in) Mexico. That's high up on the list,” he said.

He wants the company to expand more in Canada, where it has five offices, and Hawaii, where it has one office.

Honolulu has a large number of retail buildings and hotels, “so, we do quite well there,” he said.

From the ground up

The rebounding construction industry makes competition tight for skilled laborers, many of whom are aging out of the roofing profession, said Bill Good, CEO of the National Roofing Contractors Association in Rosemont, Ill. The industry employs 200,000 people nationwide but is understaffed by 10-20 percent, he said.

CentiMark can work around labor shortages in a region by bringing workers from other locations to complete projects, Slencak said.

“It's challenging, but we've been able to find ways to overcome it,” Timothy Dunlap said.

The roofing industry is fragmented — the two largest companies, CentiMark and Tecta America Corp. of Rosemont account for less than 2 percent of market share each, according IBISWorld Inc., a New York market research firm.

Acquisitions or mergers can bring clashing company cultures or procedures, but CentiMark has the advantage of being a single-owner company, Good said.

Timothy Dunlap is an example of its growth: “A lot of our employees, like myself, started out on the roofing and flooring crews.” His father began bringing him to the office on Saturdays when he was 8 years old, to help sweep floors, toss trash and do other chores for a few quarters, he said.

When he was in high school, he worked in the company's Bethel Park warehouse during summer breaks. He started on a crew two weeks after graduation in 1978. “I performed every position” until his promotion to president in 2003.

Timothy Dunlap thinks a father-son leadership team has helped the company succeed.

“We both have our different strengths and weaknesses, and we've become very good at playing off those,” he said.

Tory N. Parrish is a Trib Total Media staff writer. Reach her at tparrish@tribweb.com.