Dentsply International Inc. Business Information, Profile, and History

History of Dentsply International Inc.

Dentsply International Inc. produces a complete range of equipment and materials designed for prosthetic, preventive, and restorative dentistry. It is the world's largest manufacturer of artificial teeth and consumable dental products and spends more on research and development than any other dental company. Products are marketed under the Ash, De Trey, Dentsply, and Caulk brand names and include artificial teeth, teeth implants, dental caulk, and surgical tools and appliances. They are sold in over 100 countries, on five continents, and are manufactured at plants located throughout Europe, Asia, and North and South America. A private company for most of its existence, Dentsply went public in 1993 when it merged with Gendex Corp., a publicly held entity.

Dentsply was originated around 100 years ago in New York City by Dr. Jacob F. Frantz, George H. Whiteley, Dean C. Osborne, and John R. Sheppard. In 1899 these four men (all with experience in the dental business) opened a retail dental supply service under the name The Dentists' Supply Co. of New York. At that time the dental supply business was highly competitive. The new company was battling to gain a foothold in New York's tightly controlled market when the four men received word that a small Pennsylvania manufacturer of porcelain teeth was going out of business. Convinced that their efforts would be better rewarded if they focused on manufacturing and selling only ceramic teeth-&shy opposed to retailing numerous types of supplies in New York--the four purchased the ailing company.

One of the four, George H. Whiteley, had considerable experience as a ceramist and was well versed in the process of man-ufacturing ceramic teeth. Whiteley was sent to oversee operations of the new company while the three others set up a marketing and distribution center in New York. At that time, the ceramic tooth industry in the United States was dominated by a few players with considerable experience and strong reputations in the business. Faced again with tremendous competition, the founders of the young Dentists' Supply Co. believed that their success depended solely on their ability to offer improved manufacturing services to the dental profession.

One of the first major improvements the company made was in the production of ceramic teeth. At that time, all artificial teeth were made of porcelain. In order to secure the tooth to the denture base, platinum pins were baked into the tooth's ceramic structure. These pins put undue stress on the tooth, and when unusual pressure was exerted while a person was chewing, the tooth would often break. Whiteley developed a patented process that solved the breakage problem. In his process, platinum split-ring anchorages were baked into the ceramic tooth. After the tooth was baked, the troublesome pins were soldered into the platinum rings. This greatly reduced pressure on the tooth's structure, and, according to company publications, 'markedly reduced the frequency of breakage, lessened embarrassment to patients and saved dentists and dental technicians time, trouble and money.' They named their new product Twentieth Century Teeth, in honor of the advent of the new century.

Armed with an innovative new product, the young Dentists' Supply Co. was able to carve out a niche for itself in the artificial tooth market. In just six years the company established a strong client base and a solid reputation as a provider of quality teeth. Fueled by the success of its new product, the company instituted a policy of continued professional service to the field of dentistry and began devoting a larger portion of its revenues to research and development. In 1906 Dentists' Supply instituted another 'first' in the business when it hired a trained prosthodontist to lead a team working towards the development of stronger and more realistic-looking dentures.

Several years later, in 1914, Dentists' Supply Co. introduced another innovative new product--a series of different-sized teeth that could be selected and mounted into the denture in a manner that would be in harmony with the shape and size of a patient's face. Named the Trubyte System, the series was developed by Dr. James Leon Williams, a practicing dentist who was fed up with the awkward tooth sizes that had been produced up until that time. The company also underwrote the research of Dr. Alfred Gysi, a Swiss dentist involved in researching another first--the development of artificial posterior teeth that fit comfortably in the mouth. Together, the two doctors developed tooth size and placement standards that continue to form the fundamentals of dental teaching worldwide. In the 1920s the company introduced Twentieth Century Solila Vulcanite Gum Teeth, in which the teeth were imbedded in a strip of pink rubber that resembled natural gum tissue. The company also made important contributions towards selecting natural shades of teeth based on the age of the patient.

Early in its existence, Dentists' Supply Co. had entered into a distribution agreement with E. de Trey & Sons, an upstart dental distribution business founded by two young Swiss men whose father had invented an improved form of gold tooth filling called 'Solila Gold.' Caesar and August de Trey had come to the United States to sell their father's filling product, but soon realized that 'American dental products matched the preeminence of American dentistry' and decided to export these products to Europe. They set up an office in London, from which the youngest of the two brothers, Caesar, sought to conquer Europe with American dental products. Within a decade, E. de Trey & Sons became Dentists' Supply Co.'s sole distributor. As Dentists' Supply continued to introduce new products, De Trey continued expanding its markets and by 1923 Dentists' Supply products could be found in Paris, Milan, Petrograd, Brussels, Zurich, New York, Moscow, Madrid, and London.

Sales slowed slightly when World War I brought about heavy tariffs on imports into European countries. This inspired Dentsply to establish tooth manufacturing operations overseas, the first of which was built in Paris in 1920. The postwar years were profitable ones, with De Trey making significant progress selling Dentists' Supply dentures and related products worldwide. However, when sales began to slacken, the manufacturing/distribution team found itself engaged in a fierce battle with London-based Ash Company, a leading producer of denture equipment. As they fought for control of the European and American dentures markets, the two rivals began slashing prices drastically. Dentists' Supply's Twentieth Century Tooth, marketed under the name Solila in Europe, had captured the largest market share, but both companies had cut prices so low that neither could generate a cash flow.

The war between De Trey and Ash became so grave and had such adverse effects on the dental industry as a whole, that in 1923 a group of independent dental professionals brought the two together to broker a settlement. The following year a solution was agreed upon: Ash and De Trey merged their distribution efforts to form the Amalgamated Dental Company Limited.

Around 1920, the international world of dental supply manufacturing consisted of only a handful of key players. Dentists' Supply had earned the position of being the world's largest producer of artificial teeth. Other companies dominated in the instrument and equipment fields. In 1925 Dentists' Supply purchased a 45 percent share of Zahnfabrik Weinand Sohne & Co. G.m.b.H., a German producer of artificial teeth that had been suffering from the combined effects of World War I and British and American domination of the dental supply market. The new Amalgamated Dental Co. purchased a 30 percent share in the company over a two year period. Soon after the purchase, Dentists' Supply reorganized the German factory to increase productivity and improve the quality of the teeth it produced.

After World War II, Dentists' Supply's close tie with Amalgamated Dental proved fruitful: when Zahnfabrik's Berlin sales and distribution offices were destroyed by Allied air raids, Dentists' Supply made distribution arrangements with Amalgamated's German subsidiary, De Trey Gesellchaft, to distribute its teeth. Furthermore, normal business operations in Germany had been thoroughly disrupted by the war, and both companies lost their Eastern European markets when the Soviet Union dropped the Iron Curtain, closing its borders to western businesses. Managers from both companies worked together to institute a postwar marketing strategy.

Based on the knowledge that 'dental conditions in Germany [were] closer to other European countries than conditions in the U.S.,' Dentists' Supply set up a new European research facility in Germany. The company hired a German dentist, Dr. Konrad Gatzka, to lead research operations. Within a few years, Gatzka had created Biodent, the world's first vacuum-fired porcelain tooth. Biodent soon grew to be the best-selling artificial tooth product in Europe, and continues to hold top market share.

As Dentists' Supply's teeth became known worldwide, the company continued to expand its manufacturing. Between 1920 and 1950, foreign factories were established in England, Germany, Italy, Australia, Argentina, Brazil, and Mexico, bringing the product closer to its market and avoiding potentially high tariffs on imported goods. In 1947 Dentists' Supply ventured into the Australian market, incorporating Dentsply Australia Pty. Ltd. to allow for the purchase of Natudryl Manufacturing Company, a specialist in the production of plastic teeth.

By 1950, the artificial teeth and dentures market had matured, and Dentists' Supply had dominated the market for years. At that time, management decided that if the company were to maintain a top portion in the rapidly changing market, it would have to make some changes. They began research into other growth areas of dentistry and collaborated with a Washington D.C.-based inventor named Dr. John V. Borden in the development of a new dental drill. Within a few years, Borden created a drill with rotational speeds of up to 250,000 R.P.M., a speed much faster than conventional drills, which rotated at 6,000 R.P.M. The Borden Airotor, as it was known, revolutionized the dental practice and soon dominated the market. In 1961 the company launched a worldwide introduction of another revolutionary dental tool, Dentsply Cavitron, the first ultrasonic teeth cleaning machine. On the foreign front, the company's Australian research laboratory introduced Neolux and Neolux pearl in 1962 and 1969, respectively; these two lines of plastic teeth 'incorporated pearlescence ... in imitation of the pearlescent quality which can be seen in many natural teeth.' Dentsply Australia also developed denture veneers that imparted denture bases with the natural colors of living gum tissue.

Organizational changes continued through the 1950s, and in the early 1960s the company developed a 'three-point program of diversification.' First, the company planned to diversify its product offerings and venture further into the dental equipment market. Secondly, the company sought to expand its fields of expertise through mergers with other dental product manufacturers; and lastly, management decided to venture into the optical business due to the similarities of the industry's market structure to that of the dental supply market.

In 1963 Dentists' Supply merged with The L. D. Caulk Company, of Milford, Delaware. L. D. Caulk enjoyed the reputation of being the best supplier of products used daily in dental offices, including restorative systems, dental cements, alloys, denture base materials, and a wide range of other products. A year later, Dentists' Supply merged with the Ransom and Randolph Company of Toledo, Ohio, a well respected manufacturer of ceramic materials, dental instruments, and dental burs. The company further reorganized its strategy in 1968, focusing on 'related fields, markets or technology which were well managed and had growth potential equal to, or greater than, that of the industry as a whole.' The first acquisition under this new philosophy was F. & F. Koenigkramer Company of Cincinnati, Ohio, a producer of hydraulic equipment, chairs, and stools used in the optical and dental industries.

Throughout its history, Dentists' Supply had developed a number of products under the 'Dentsply' brand name, and over the years the company became more and more known by this name. So in 1969, Dentists' Supply Co. of New York simplified procedures by changing its name to Dentsply International Inc., linking the firm with its brand name and accurately reflecting the scope of its market. Also that year, the company further branched into the optical field and began purchasing several retail optical chains in the state of Kentucky.

Dentsply's largest merger came about in 1976, when it joined forces with its longtime worldwide distribution partner, Amalgamated Dental International. The merger gave Dentsply a highly developed worldwide distribution and marketing network, as well as control over A.D. International (Australia) Pty. Ltd., the largest retail dental supply chain in Australia. Under new ownership, the Australian subsidiary changed its name to Dental Houses/Dentsply. Market conditions changed in the early 1980s leading Dentsply to close its original Australian factory in 1981 and transfer production to its Brazilian operations, Dentsply Industria e Comercio Ltda. Dental House/Dentsply continued to import and distribute Dentsply's line, as well as products by other manufacturers, and grew to become the largest supplier in the country. In 1982 Dentsply acquired the remaining shares of its German partner, Zahnfabrik, which then became a wholly owned subsidiary. Dentsply also sold off its optical business as well as its Koenigkramer equipment manufacturer. Throughout the 1980s and early 1990s, the company continued to broaden its product line through both laboratory developments and brand name acquisitions. Dentsply also ventured further into the Asian market, where large population groups and a booming economy promised enormous sales potential. In the late 1980s, Dentsply opened an Asian Distribution Center in Hong Kong and equipped it with an educational center to teach dentists, technicians, and sales personnel about Dentsply products and equipment. It also established several joint ventures in the People's Republic of China and in India. In 1991 Dentsply opened Dentsply Japan, K.K., a wholly owned subsidiary, opening the door to the enormously large, but tightly controlled, Japanese market.

Dentsply went public in 1993 when it merged with Gendex Corp., a young, publicly traded manufacturer of X-ray machines and equipment used in medical and dental practices. Gendex was founded in 1983 to purchase the dental X-ray branch of General Electric Company and in ten years had grown to become the leading supplier of dental X-ray equipment in the United States. The merger brought Dentsply a large share of the U.S. X-ray market, and provided Gendex with a highly developed international sales and distribution network. Dentsply also purchased Eureka X-Ray Tube, Inc., which conveniently supplied all the medical X-ray tubes used in Gendex systems. The company suffered a minor financial setback the first year it went public, caused primarily by the bankruptcy of Healthco, one of its major distributors. Dentsply absorbed the loss and established relationships with other distributors.

As it nears its 100th anniversary, Dentsply has great cause to be optimistic. It sees great sales potential in the Pacific Rim, and has already laid a strong foundation for growth as that region's economy continues to expand at a rapid rate. The company opened its first wholly owned subsidiary in Thailand in 1993 and seems to be devoting much of its energies to expanding that market. In the United States Dentsply also has cause to be optimistic: the percentage of the U.S. population covered by dental insurance rose by ten percent between 1980 and 1993, to 45 percent. Should a nationwide health care plan be approved, that number ought to increase even more. With its well-established relationships and good reputation in the dental community, Dentsply seems well poised to benefit.

Principal Subsidiaries: Dentsply Laboratory Division; Dentsply Equipment Division; Dentsply Specialty Products Division; Ash Dentsply; Latin America Export Division; Ransom & Randolph Division; L. D. Caulk Division; Ceramco Inc.; Dentsply Implant Division; Dentsply Canada, Ltd.; Dentsply Caulk de Mexico S.A. de C.V.; Ceramco Manufacturing Co.; Dentsply Industria e Comercio Ltda. (Brazil); Dentalina Comercial Ltda.; DeTrey do Brasil Industria e Comercio Ltda.; Dentsply Argentina S.A.C.e.l.; Dentsply G.m.b.H.; Ceramco Europe Limited; Dentsply Ltd.; DeTrey Dentsply, S.A.; DeArt s.r.l.; Dentsply International Inc.; Dentsply Japan K.K.; Dentsply (Australia); Dental House/Dentsply; Gendex; Rand Universal; Eureka.