|Source • Brands||
Price • Origin
Grohe America, Inc.
241 Covington Drive
Bloomingdale, IL 60108
Grohe Canada, Inc.
1226-1230 Lakeshore Rd
E. Mississauga, ON L5E 1E9
Friedrich Grohe & Co. AG
58675 Hemer, Germany
(Meets North American Standard)
This Company In Brief
Grohe, as a brand and as a company, has undergone and is still undergoing tidal changes. At one time, in the not too distant past, Grohe was a family-owned German faucet company selling well designed, good quality faucets manufactured in Germany. Today it is the subsidiary of a giant Japanese building products conglomerate that manufactures faucets mostly in Mexico and China. The staid, but reliable, engineer-driven bathwares company of the 20th century is gone. In its place is a new company that is very bottom-line oriented with a crushing need to greatly increase revenue in the short term even at the expense of brand viability in the long term, and with few options for doing so that do not affect product quality.
In the not too distant past Grohe was a family-owned German faucet company selling well designed, good quality faucets manufactured in Germany.
Today it is a German company owned by another German company owned by a Luxembourg holding company owed by a Japanese conglomerate that manufactures most of the faucets destined for North America in Mexico and China using Asian-made parts and components.
A Grohe faucet is no longer a German faucet. It is a German-designed faucet that has unlikely to have ever seen Germany or been touched by an actual German.
Pronounced "grow-HEE" in North America, and "grow-HEH" nearly everywhere else, Grohe is the largest European-based manufacturer of sanitary fixtures with a global share of the sanitary fixtures and accessories market estimated by the Wall Street Journal to be about 8%.
Founded in 1911 as Berkenhoff & Paschedag, the company was purchased by Friedrich Grohe in 1936. It became Fredrich Grohe Armaturenfabrik in 1948 then Fredrich Grohe AG in 1991 and Fredrich Grohe AG & Co. KG in 2000 after being acquired by BC Partners and privatized.
In 1962 Grohe pulled off a coup of sorts by obtaining exclusive rights to produce the Moen single handle cartridge faucet for the European market, a move that greatly increased its market share, and helped make it the single largest faucet maker in Europe.
Under the stewardship of BC Partners, Grohe participated in a scheme involving 17 European sanitary wares manufacturers to fix prices in Germany, Austria, Italy, Belgium, France and Holland over the eight year period between 1992 and 2004. The conspiracy collapsed after then the new owner of Hansgrohe, discovered the scheme and immediately informed authorities.
In 2010 the European Commission fined Grohe $68.5 million for violating Article 101 of the European Union Treaty, finding that the company had been a willing participant in the illegal activities of the group, but reducing the fine in light of Grohe's cooperation with investigators.
The following companies were implicated in the conspiracy:
Grohe Group Sàrl is owned by the giant Japanese holding company, LIXIL Group Corporation, headquartered in Tokyo with 80 thousand worldwide employees. LIXIL bought Grohe from BC Partners for a reported $4.13 billion in 2014.
Grohe's parent company, LIXIL, is itself a very new enterprise, formed in 2010 by merging the Japanese toilet and sanitary ware maker Inax, with building materials manufacturers: Tostem Corporation, Shin Nikkei Co , and Toyo Exterior. LIXIL is expanding rapidly into European and American markets through acquisitions as its home market in Japan shrinks. Japan's aging population and very low birth rate have resulted in a rapidly declining interest in new home-building.
It purchased in 2012, and with its purchase of Grohe (organized with American Standard into the LIXIL Water Technology Group) it is now one of the largest sanitary wares companies in the world, possibly the largest.
Grohe owns two large Asian subsidiaries, and production facilities in Portugal and Mexico:
• Joyou AG, acquired in 2011, is a holding company listed on the Frankfurt Stock Exchange that owns sanitaryware manufacturers in China, including Joyou Sanitation Technology Industrial Co. Ltd. and Zhongyu Sanitary Technology Ltd. in Hong Kong. It was founded in 1979 by Jianshe Cai to manufacture faucets.
May 21, 2015, Hamburg
In accordance with § 15 of the German Securities Trading Act (Wertpapierhandelsgesetz), Joyou AG announced that it has filed an application of insolvency in the district court (Amtsgericht) of Hamburg. The filing resulted from losses estimated at over $650 million due to accounting fraud, including off-the-books loans and by Jianshe Cai and Jilin Cai, chairman and deputy chairman respectively of its subsidiary, Zhongyu Sanitary Technology, Ltd. of Hong Kong.
The alarm was raised in April when the company warned shareholders of potential problems. Since then the once $400 million company has lost nearly all its market value. Through insolvency proceedings, the company expects to write off about $300 million in loans that Joyou had secured from a consortium of Japanese banks in 2014.
The insolvency petition was filed barely seven weeks after LIXIL Corporation completed its acquisition of the final 12.5% of the shares of Grohe Group, S.a.r.l., the owner of Joyou AG.
Jianshe Cai and Jilin Cai have, according to the announcement, "engaged in inaccurate accounting and unlawful reporting for many years," falsely stating and grossly inflating sales and assets. There are also early indications that Texas Pacific Group and Credit Suisse Private Equity, Grohe's former owners, may have manipulated Joyou to enhance the value of Grohe and inflate the sales price to LIXIL.
Jianshe Cai and Jilin Cai have both been dismissed and are looking at possible criminal charges. David Haines, the Grohe Group Sàrl CEO installed by Texas Pacific in 2013 and a member of Joyou's board of directors has been let go as "redundant". Grohe denies that the separation has anything to do with the Joyou debacle. The acquisition not only gave Grohe enhanced manufacturing capacity in some of the most modern factories in Asia, but enhanced the company's access to China's growing luxury bath wares market though Joyou's over 3,000 Asian distributors along China's south coast.
Joyou acquired Yongsheng Galvanization Industrial Co. Ltd., a metal plating company in 2010, expanding its capacity to manufacture finished faucets, and further modernized its faucet production line in 2014 with a $100 million loan. Most of its faucets are destined for for the Chinese market, in which Grohe is a major player, but it also produces faucets for North American sales.
German Firm Plans New Faucet Factory
by: Soonya Vanichkorn
The local unit of Germany's Grohe AG, a leading provider of premium bath faucets and showers, will build a third, 600-million-baht [$18 million] factory in Thailand to serve a larger market under the Asean Economic Community (AEC).
Grohe Siam Co., Ltd. is a joint venture between the Dusseldorf-based Grohe [GmbH] and Haco Group Co. Ltd., its Thai distributor.
"Our foreign counterpart has always been interested in the tax incentives under the AEC and wants to make Thailand its main production base," said Dhitipong Dowpiset, Haco's chief marketing officer.
Grohe Siam's two present factories are in Rayong's Klaeng district. Running at 80-90% capacity, they produce a combined 100,000 items a week. Mr. Dhitipong said the third plant will increase output by 30%, making the faucet manufacturing site the largest of its kind in the world.
Only 5% of the products are sold in Thailand, with the vast majority exported mainly to .... India, China, Europe and the U.S.
• Grohe Siam, Inc. is owned by Grohe in partnership with Haco Group Co., Ltd.. Grohe Siam is a manufacturer of faucets and other decorative fixtures in Klaeng on Thailand's south coast. It has recently invested $18 million to expand the manufacturing capacity of its modern factories by thirty percent. Most of its products are made for the Asian market, but it has also become a source of components used in Grohe faucets world-wide, and produces some of Grohe's economy faucets sold in North America.
• Grohe Portugal: Componentes Sanitários, Lda with 750 employees produces about 25% of total Grohe's European production including several lines of kitchen faucets. Most production is sold in Europe, but some end up in North America.
• Servicios Grohe Mexico S. de R.L. de C.V.. Until recently, Canada was the primary source of Grohe faucets sold in North America. Grohe manufactured "American style" and stainless steel faucets at its Mississauga, Ontario factory. In 2015, however, Grohe dismantled the entire factory and trucked all of its machinery to Ciénega de Flore, just outside Monterrey, Mexico where it has set up shop in an assembly plant abandoned by its sister company,
According to Dr. Ulrike Heuser-Greipl, senior vice-president, public and investor relations for Grohe AG, the Canadian plant was closed
"because of its limited productivity compared with our other production facilities …"Grohe left behind its 300 veteran Canadian workers, and it will take a while to train a rookie Mexican work force, so not only will production be down, but the quality of Grohe's Mexican faucets will be suspect for quite a while. Eventually, however, this plant is expected to become Grohe's main source for faucets sold in the U.S. and Canada.
Until 1998, Grohe and were owned by the same family, the descendants of Hans Grohe who founded Hansgrohe in 1901. His son, Friedrich, started with his father's firm, but left after buying his own company in 1936. His firm eventually became Fredrich Grohe AG.
Many Grohe family members inherited shares in both firms, but the two enterprises always operated as separate organizations, often in competition. They fought over the brand name "Grohe" for several years, finally reaching an understanding that gave Friedrich Grohe AG the Grohe brand name while Hansgrohe kept the Hansgrohe name.
The family feud settled down in 1998 when the Grohe AG family owners sold the majority of their shares to BC Partners. Hansgrohe remained under family ownership until 2002 when a majority stake in the company was sold to That sale ended the family competition once and for all.
Some Grohe family members still own shares in the two firms, but they are minority shareholders and are no longer involved in management of the companies.
Grohe's main European faucet plant is now in Albergaria, Portugal. We can find no evidence that much, if any, of the faucet output from either of these European facilities reaches North America. Most appears to be sold within the European Community.
In addition to manufacturing faucets in its own facilities, Grohe buys finished faucets, in the box and ready to sell from factories in Asia and Mexico, including:
• Delmei Sanitary Ware Co., Ltd., an manufacturer in China. Delmei also manufactures faucets for brand faucets for RONA in Canada, but that relationship appears to have ended.
• also a Chinese manufacturer that seems to make faucets or faucet components for nearly the entire faucet world, including among others, as well as Grohe.
• AS Maquila Mexico, S. de R.L. de C.V., a subsidiary of American Standard Brands founded in 2007 whose 4,000 employees manufacture vitreous plumbing fixtures for American Standard. The plant also inherited faucet production in 2014 after American Standard closed its faucet factory in Monterrey, Mexico (now occupied by Grohe). It is now American Standard's primary producer of faucets for export to the U.S. and Canada.Grohe's Thailand factory manufactures a large percentage of the parts, components and sub-assemblies that go into all Grohe faucets, wherever made. In addition, the company contracts with outside suppliers in China and Taiwan for parts and components, including:
The association with AS Maquila Mexico may be temporary, ending when the new Grohe Mexican factory get up to full production. But a lot depends on the market and circumstance within the company. With Grohe's troubles with Joyou, the additional production capacity may be necessary for a while yet.
American Standard Brands and Grohe are essentially the same company now, so we expect an increase in consolidated manufacturing is in the cards for both companies, but we anticipate it to occur in China, not Mexico.
• Seagull Kitchen & Bath Products Co., Ltd. in Guangzhou, China. Seagull makes finished faucets for
• Sunspring Metal Corp., Ltd. of Taichung, Taiwan, the worlds largest consumer of ZAMAK, the zinc/aluminum alloy, colloquially called "pot metal", used in inexpensive faucet parts. With a large factory in Taiwan and two more in China, Sunspring is a major supplier of faucet components and fittings to such diverse faucet manufacturing companies as It has the ability to manufacture complete faucets, in the box and ready to sell, but there is no evidence that it provides Grohe with more than faucet parts and components.
As late as 2004 Grohe sourced 80% of its faucet components from European suppliers. No longer. Almost all faucet components are now made in Asia. With the acquisition of Grohe by LIXIL Group, expect the number of Asian-made faucets and the amount of Asian content in Grohe's faucets to continue to increase.
Mexico and China are the major producers of the mid-level and economy Grohe Faucets that make up an ever-increasing proportion of the Grohe faucets offered for sale in North America. Customs and import records show a very substantial increase in faucet imports from Asian factories over the past five years. Grohe's volume of imports is impressive.
In the first five weeks of 2016, Grohe America imported a total of 13 tons of faucets: five tons from Mexico, and eight tons from various Chinese suppliers.
Grohe employs a large in-house design team headed since 2005 by Paul Flowers, which is pushing the somewhat dated and dowdy line of faucets into more contemporary forms. Grohe designs have won an impressive number of international awards including the iF Design Award, over 15 Red Dot awards and a half-dozen or so coveted Good Design awards from the Chicago Athenaeum.
In the past Grohe's designer faucets were initially made in its Lahr, Germany factory. We don't know that is still true. If not, then we don't know where they are made. In any case, after a few years manufacturing moves to Asian and Mexican factories. The popular LadyLux faucet, for example, has not been manufactured in Germany for years.
The company uses its own proprietary Eurodisc® ceramic disk mixer cartridges in its single handle faucets. These are acknowledged in the industry as some of the best made. The cartridges include a Teflon® coating that Grohe calls SilkMove® technology. According to Grohe the Teflon® makes the cartridge smoother and easier to operate with more precise control. Grohe's testing laboratory in Lahr, Germany puts every Grohe cartridge design through a daunting series of tests in some of the hardest, most mineral rich water in the world, to simulate 15 years of household use. In tests by TÜV SÜD, Grohe cartridges did well against other proprietary European cartridges in most categories. (Download TÜV SÜD test summary.)
TÜV SÜD, founded in 1866 in Munich, is one of the oldest and most respected testing and certification laboratories in the world. If TÜV SÜD says it's so, then it is almost certainly so. We have not, however, seen comparisons to some of the better-known non-proprietary European cartridges such as those made by Flühs Drehtechnik, GmbH or Kerox Kft, and the TÜV SÜD test results from 2007 are getting dated. Considerable improvement in ceramic faucet cartridges technologies has occurred over the past decade resulting in much more robust and durable cartridges, including the diamond-like carbon disc coating used in proprietary PVD+™ cartridges by
The cartridges used in Grohe's two handle faucets are more of a mystery. They are brass stem cartridges widely made in Europe, and may be sourced from a variety of manufacturers. We don't think they are made in house because appears to use the same cartridge in its two-handle faucets, and its unlikely these two European rivals are supplying each other with cartridges. We have never had of a complaint about a malfunctioning Grohe stem cartridge, so we think they are probably well made. Certainly the ones we examined were solid and impressive.
Grohe, as a brand and as a company, has undergone and is still undergoing tidal changes. The reputation of the company and its faucets in North America is based on what the company was 10-15 years ago, and has not caught up to the reality of the new Grohe of today.
The staid, but reliable, engineer-driven bathwares company of the 20th century is gone. In its place is a new company that is very bottom-line oriented and marketing driven. Its new Japanese masters took on massive debt to finance the purchase of Grohe and are focused on increasing revenue above all other considerations. Expect major changes in how and where the company's products are manufactured, distributed and sold, but, even now, the Grohe brand in the U.S. is undergoing changes that are likely to redefine the brand's reputation over the next few years. The bankruptcy of one of its major manufacturing subsidiaries combined with its recent removal of its Canadian manufacturing to Mexico will certainly cause disruption in its supply chain for a while. How long a while is uncertain.
Few Americans realize that Grohe is actually the of Europe. It manufactures faucets at all price levels: economy, mid-price and premium. Until recently North Americans never saw economy or mid-price Grohe faucets. Grohe America imported only the premium end of the faucet line, made in Germany, fostering the illusion that Grohe faucets were all upscale, luxury items equivalent to
Grohe changed the rules starting in 2005. Capitalizing on the company's reputation as a maker of luxury faucets, Grohe America has begun flooding the U.S. market with Grohe's lower-end products made mostly in Mexico and China. Grohe faucets have begun showing up in very un-exclusive and un-Grohe-like places, including mass retailers such as Home Depot, Amazon and even Wayfair and Walmart. What happens to the Grohe brand as it becomes associated with lesser quality faucets is well understood — it will, over time, cease to be viewed as a premium brand.
We think the caché of the Grohe trademark in the North American marketplace is on a downward slide. Expect the average price of Grohe-branded faucets to come down nut also expect considerable overall quality and style erosion as the new company's new masters attach the Grohe name plate to its cheaper, mass market faucets, priced to sell at discount venues.
We saw the same brand erosion infect Black & Decker tools beginning in the 1970s. The tools engineered and manufactured by Duncan Black and Alonzo Decker were at one time the pro's preferred brand in the U.S. The company was the first to patent the pistol-grip power drill in 1917. Black & Decker products were so well-regarded for reliability by the 1960s that they were NASA's choice for use in space by astronauts on the Mercury, Gemini and Apollo missions.
But, in 1975, after Francis R. Lucier succeeded Alonzo Decker as chairman, the company started focusing on expansion and marketing instead of engineering and quality, and the brand began to drift. It bought GE's small appliances division in 1984 and began renting out the name to other manufacturers to increase revenue. By 1990 the iconic Black & Decker logo could be found on everything from waffle makers to curling irons. Meanwhile, the quality of its core products, power tools, crashed, especially after the company merged with Stanley Works to become Stanley Black & Decker in 2010.
Today, a professional who gets a week's worth of work out of a Black & Decker drill before one of its plastic components shreds is considered "buy a lottery ticket" lucky. The brand is regarded by many building professionals as little more than a toy.
We think Grohe has embarked on the same sort of brand cheapening process that has accelerated since the company's purchase by LIXIL. It is the sort of dementia that infects corporate CEOs facing repayment of huge debts resulting from leveraged buy outs such as LIXIL's purchase of Grohe from BC Partners in 2014 with borrowed billions, and in this case aggravated by the unexpected insolvency of Joyou and potential added debt of $316 million. There is a need to drive up revenue in the short term to pay the enormous debt, disregarding any likely sacrifice of long-term brand vitality.
Consumers can be fooled, but not forever. Initially the availability of low-priced Grohe faucets will spur sales in North America as customers snap up what they believe to be bargains on German-made luxury faucets. But, over time the buying public will come to realize, as it has with Black & Decker, that the Grohe marque no longer represents a high-quality upscale product. Most Grohe faucets sold in North America are already no longer German. Many are not even made by Grohe. The vast majority are from Asia and Mexico, and an increasing number of those are manufactured by outside contract factories.
The Grohe faucet warranty is the standard "limited lifetime" warranty for the North American market. It guarantees against defects in mechanical parts and finishes for as long as the original purchaser owns the home in which the faucet was originally installed. Grohe warranty and parts support, however, is markedly below average. In fact, it is a blot on the brand.
Grohe promises to keep parts on hand for discontinued faucets for just 10 years (15 years for internal parts). The company never does explain how it expects to honor its lifetime warranty after 10 (or 15) years without spare parts.
Much more troublesome, however, is Grohe's customer service in North America. Grohe America clearly prefers not to be contacted at all, but if customers insist, then preferably by e-mail or voice mail. Hold times of more than 20 minutes are common, and 40 minute waits to talk to a customer service agent are anything but rare.
Grohe promises to respond to e-mails and voice mails within 24 hours. But, our experience is that it frequently does not respond at all, and rarely within 24 hours. If your faucet needs a part and is out of service, this kind of delay is a real problem. Expect 5-20 days to get warranty claim resolution from Grohe, compared to 1-2 days for
If you do have the patience to wait for an agent, expect to be treated, at best, brusquely, and sometimes with outright rudeness. Agents act as if talking to you is a major imposition on their valuable time.
We rate Grohe service an abject failure. Only has ever gotten a lower score in our customer service tests, and then by just a whisker.
Our observations are confirmed by the company's Better Business Bureau's grade of "F" on a scale of "A+" to "F". The basis for the poor showing, according to the BBB, is that "Grohe America does not respond to customer complaints."
This is a systemic problem that has been going on for more than a decade. It can be fixed. had the same sort of problems in the early 2000s and took a huge public relations beating, but it made serious efforts to turn its customer support around in just three years, and now has one of the smoothest, most responsive service operations in North America. So, it can be done. Grohe, however, has let the problem go on and on for years and years. It seems that it simply does not want to be bothered.
On the plus side, the company web site for North America is an example of how a web site selling faucets should be constructed. The navigation is intuitive and easy to follow. The information provided about Grohe faucets is very complete, including detailed specifications about each faucet, dimensioned drawings, exploded drawings showing replacement parts, 3D CAD models (universal .dxf format), and even a flow pressure diagram. These are often in the form of slow-loading .pdf files, but at least they are available. What's missing is information about where a faucet is made, something most buyers would like to know, and most faucet importers of Asian-made faucets take pains to conceal.
Imported faucets comparable in quality to Grohe's made-in-Germany faucets include:
For American-made or -assembled faucets comparable to Grohe's products, consider the following: