Natural tendency for corporate bloating, page-5

@MarsC

I went to DLX AGM yesterday and also joined the innovation centre tour at the end of the AGM. Our tour guide mentioned that in that centre, they have something like 60 or 80 (I can't remember which number, but certainly one of these two numbers) chemists working. About half of them have PhD!

Best selling products such as Dulux Wash & Wear are continuously improved, with new versions being released every 2-3 years.

We also saw fancy equipments/machines in the lab. One of the newer additions, which is the size of a printer, costs about $1m each.

With such a strong brand name backed with such a commitment to R&D, it is no wonder that competitors find it impossible to topple DLX.

During the AGM, one of the shareholders mentioned that the room where the AGM was held, was getting too small. The Chairman answered that he doesn't like spending money on hiring expensive rooms in fancy 5 star hotels in the CBD. Although he is certainly making the right kind of sounds, there are still aspects of their decision making that I don't quite agree.

At the end of the AGM, as I was leaving, I saw the newest director, Graham Liebelt, also leaving in a brand new Mercedes S63. His taste in fancy cars certainly has nothing to do with DLX performance, but as an investor, I still prefer to invest in companies run by people who are more.... hmmm.... low profile?