Notable Processors of 2010
Published: April 1st, 2010
Each year our Notable Processors feature highlights processors around the globe who are doing their part to bring this industry forward, and this year’s class is a great example. Here, presented in alphabetical order, are some of your outstanding peers.
L.D. Blackwell Principal, Blackwell Plastics
Wrapping up his eighth decade in the industry, L.D. Blackwell’s life in plastics is best told through the eclectic parts his company has made over the years. Items as iconic as the Weed Eater, Screw Pull wine opener, C47 gun ports, traffic markers, heart bypass pump housings, and even the sensors that monitored astronaut Alan Shepard’s vitals during his historic journey into space have come through Blackwell’s custom molding shop south of downtown Houston (TX), often arriving as little more than an inventor’s vague concept. From a table occupying the company’s original 6000-ft2 building that opened in 1939, Blackwell and company president Jeff Applegate are surrounded by the molder’s history through parts adorning the walls and occupying shelves of the conference room.
The story starts with the slip cork insert, an adjustable-height fishing float developed by L.D.’s father. To supplement income from his auto repair shop, Blackwell’s father took up fishing and created the device to fish at different depths. Originally made from wood, L.D. had the idea to fashion the float out of the plastic that was used for toothbrushes. The Blackwells would go on to build their own plunger-style press to fabricate the products, and Blackwell Plastics was born. After serving in the Air Force during World War II, L.D. came back and took over the business following the passing of his father, a World War I veteran who had been gassed in Europe.
With all manner of items still rationed after the war, Blackwell had to lobby his local congressman for a veteran’s exemption to purchase a brand new 250-ton HPM injection molding machine, paying around $11,000. Although the fishing product was good business, Blackwell soon learned that money could be made taking on custom molding work. Over the years the story of Blackwell Plastics became intertwined with the story of Houston, with the company’s molding linked to the oil and gas industry, the city’s medical center, cooler manufacturer Igloo, computer maker Compaq, and more.
Today a visit to the shop reveals every one of its machines not only molding different parts but also making components for entirely different industries. “All my life we’ve had an extremely diversified business,” Blackwell says, “which has enabled us to go through periods of ups and downs in the plastics industry. We felt the slump last year—don’t think we didn’t—but we have gone through these for many years. When some products go down, others go up, even in an economic slump.”
Now 85, Blackwell stays involved in a market that he believes will continue to grow. “There’s still a need for plastics, so many people need plastics, still today,” Blackwell says. “I think we’re still in a young industry. There are so many things to do and be made, I tell Jeff, we just have to be selective.”
George Blank CEO and group president, MedTech Group
MedTech Group (South Plainfield, NJ) was founded 31 years ago with the objective to manufacture plastic parts for the medical market. Today the company is a contract manufacturer focused exclusively on the medical/surgical, pharmaceutical, diagnostic, and biotech sectors. George Blank says that it was always the Group’s “charter” to focus on the medical and healthcare markets, and it’s kept to that. “We started with the idea that medical device companies need high-quality plastic parts, and suppliers that understand that business and its manufacturing requirements,” says Blank.
Today, the company has evolved into a global contract manufacturer, serving customers in Puerto Rico, Costa Rica, and soon in Singapore, in addition to its U.S. facilities. While MedTech is focused on its markets and the types of products it manufactures for its customers in those markets, the company is very diverse in the services it provides. In 2000, MedTech Group acquired a toolbuilding company in New Jersey, and in 2003 it added specialized metal medical manufacturing.
In February 2009, MedTech Group announced the acquisition of a medical products design company, TDC Medical, which was expanded in September 2009 to add to MedTech’s capabilities. TDC Medical currently operates design and engineering facilities in Marlborough, MA, Sunnyvale, CA, and Boulder, CO, where it provides “Concept to Clinical” product development services.
In the fall of 2009, MedTech announced the opening of a second plant in Costa Rica dedicated to full product assembly, and then just two months ago announced it would open an injection moldmaking operation, also in Costa Rica and scheduled to open in June 2010.
Leon Farahnik Chairman, HPC Industries LLC
Leon Farahnik’s family was a major player in Iran’s plastics industry, and that is where he got his own start, opening his first facility, a bag-making plant, in 1977 at the age of 22. Two years later, the Shah was dethroned and Farahnik’s family was forced to leave the country, settling in California. There he started a new company that eventually grew into Hilex-Poly, the world’s largest processor of plastic shopping bags, leading the transition from paper to plastic bags at the country’s grocery stores.
He sold Hilex-Poly to Sonoco, then 15 years later bought it back, and finally sold his share in the company about two years ago. Just two months ago (February 2010), he signed a letter of intent to sell PWP Industries, one of the largest thermoformers in the U.S. and a company he grew and ran since 2001, to Pactiv for $200 million. Over the years he has been involved in just about every type of plastic processing facility except for rotomolding.
Sit back now and relax, enjoying his successful string of operating and selling companies? Not Farahnik, who says entrepreneurship runs through his blood. He already is embarking on his next mission to start a massive 100 million-lb/year PET recycling facility in California. Planning for the facility began as part of PWP’s growth plan, but Farahnik decided to keep the plans for the recycling facility when he sold the thermoformer.
“Recycling of all materials is increasingly important because it is a powerful tool in reducing carbon emissions. Recycling not only conserves virgin resources and helps reduce landfill, it also capitalizes on the energy already invested in the materials being reclaimed. Carbon footprint reduction will become the major motivation for all recycling programs,” he says.
Currently much of the PET recyclate collected in California is exported to China, which Farahnik considers to be an unfortunate loss of an important carbon-reducing asset. “It’s largely due to a lack of local processing capacity, and we’ll help fix that,” he notes, and reckons he can compete for enough postconsumer PET recyclate to keep his new plant fed. “I feel PET is the right product for the future of packaging,” says Farahnik, adding the recycling plant’s output will be sold out easily. And one plant is just the start: “Within the next six years, I predict I will have three plants of this size across the U.S.” Slow down? No way. “I know I’ll keep working and I know it will be in plastics,” he says.
Eddie Fong Managing director, Plasform
Going the extra mile doesn’t merely mean doing what your customer demands, says Eddie Fong, managing director of Malaysian injection molder Plasform Sdn Bhd (Kajang). “We tend to get very involved with the customer from the very onset of a project. In one case we were able to suggest a change in the packaging method that ended up increasing their line productivity by 30%,” he recalls. In many cases, Plasform incorporates its knowledge of materials, mechanical design, moldmaking, processing, and even packaging to come up with a robust, integrated solution for its clients.
“When customers tell us they want the lowest cost, we generally tell them up front that we are not the cheapest,” says Fong. “Cheapest does not necessarily mean most cost effective over the medium or long term.” Plasform has, in fact, turned away customers who want the cheapest molds and later found out that their tooling made elsewhere runs at a 50% longer cycle time. “They pay for it over the life of the project,” notes Fong.
Originally from the corporate world, one of the more rewarding aspects of owning a small injection molding operation is the satisfaction that his efforts have a direct correlation with the success of the company. “In a corporation you are more a part of a collective effort,” he notes. Going forward, Plasform plans to cultivate its own corporate culture based on “joy, innovation, teamwork, commitment, and efficiency.”
Garth Galloway Managing director, Galloway International
Rotomolding has a promising future from an environmental perspective, according to Garth Galloway, managing director of Galloway International (East Tamaki, New Zealand). For one, access to water is becoming a key global issue, and rotomolded tanks, as well as more challenging components such as filtration housings, have a key role to play. Secondly, the challenges associated with recycling of thermoset composites have helped rotomolding make a charge into areas such as amusement park rides and playgrounds.
Galloway acquired the rotomolder he now heads in 1997 in order to apply rotomolding in playgrounds. Previously he worked as an amusement park consultant for clients, including Disneyland. “It’s come full circle now because we’ve started supplying flumes to Disneyland for retrofitting to some of their North American rides,” he says. Galloway is also one of only two companies globally that molds playground equipment for McDonald’s. Despite its remote location, Galloway has been recognized as a technology leader in the rotomolding field.
Galloway feels that the industry has rested on its laurels somewhat in being dominated by water tanks that are relatively easy to make, and strong demand for those has stifled the incentive to move on to more challenging jobs. To further rotomolding, Galloway is working with Auckland University’s Plastics Center of Excellence to design a finite element analysis package, develop methods to better carry out physical testing, and even design special rotomolding resin grades.
“The industry has been thought of as a black art, but we’re starting to be more technology minded,” he says. One urgent issue is development of more process-friendly medium- and high-density PE grades. “We exclusively process MDPE and HDPE, but it is very challenging, given they are less tolerant to warpage,” he explains. Overcoming such issues will go a long way to furthering the rotomolding process.
Josh Gray CEO, Goex Corp.
Josh Gray, CEO at profile and sheet extruder Goex, has spent his entire career at the Janesville, WI-based company, and even grew up in its hometown. “When I started, there were six people and one extrusion line,” he recalls. Now, he says, “Our business is growing and the growth remains steady.” Most of the new business is coming at the expense of competitors, he says, a trend he attributes to the processor’s service. “We have outstanding, committed people. . . . We recognize that our markets are ‘quick serve’ markets. In these markets, often the first printer that can do a job, gets the job. So we need to be fast” when supplying those printers with the necessary sheet. “Our objective is to be a five-day supplier,” he says, serving customers spread throughout North America, though with a significant share in the Midwest.
Goex supplied the packaging industry exclusively until 1990, when it was approached by some graphic artists and other printing companies wondering if it could supply their plastic sheet needs. Now, sheet extrusion accounts for about 75% of its business. One initiative involves taking back any production scrap from its customers, and reusing the material in a line of sheet and film.
The company doesn’t waste much material internally, either. All of its extrusion lines are fitted with closed-loop quality control systems continuously monitoring film and sheet thickness, and ensuring it remains consistent.
Looking ahead, Gray reckons the industry is starting to improve, though slowly, and sees Goex faring as well or better than its competitors. “I think we’ve bottomed out, though I don’t know how long the trough will last,” he says, noting that job creation in the U.S. is critical to sustained economic growth. Unemployment in Janesville is close to 17%, about double the national average. Of Goex’s own workers, Gray says, “All I ever ask is that you contribute . . . don’t ‘status quo’ on me.”
As the recession ends and demand increases, Gray foresees a new set of problems emerging. Plastics suppliers have taken capacity offline and won’t bring it back without sufficient cause, which could lead to a surge in demand for what will remain a limited supply. Good for Goex is this means the use of recyclate and the need for processors proficient in reusing production scrap will only increase. “Recycling is definitely here to stay,” he says.
Hans de Haas CEO, Bianor
Hans de Haas, CEO of Polish processor Bianor, is a hands-on investor. He joined the company in early 2007 when it was acquired by Nimbus, a venture capital firm he was part of that invests in “companies in traditional industries, which have reached a crossroads in their development.” The management change has helped Bianor transition from a processor pretty much dependent on business from Philips, which it followed to Poland in 1997 when the latter transferred domestic appliance production from the Netherlands, to an innovative operation with 50 machines that has diversified into packaging, power tools, automotive, and construction.
“What we have done with Bianor is manage change,” says de Haas. “We are not only financial investors; we also bring in our management and information systems, and essentially ‘professionalize’ an operation and enable it to play at the next level. We make the company process-driven.”
The impetus given by recent developments at Bianor has seen the company recognized as a strategic supplier for leading power tool producer Makita. The Japanese OEM demands very high quality standards in terms of functionality, tolerances, meeting deadlines, and control, according to de Haas.
“Progress has not only come through re-engineering all operational processes and introducing lean manufacturing and Six Sigma methods, but through process innovation as well,” adds de Haas. A semi-centralized material handling system has been installed, while Bianor also upgraded rotary blowmolding technology—normally used for molding PET bottles—for application in a stylish LED lamp supplied by Philips. A more recent project with Philips is the new square-shaped Senseo Quadrante coffee machine, where Bianor molded all of the plastic components and also carried out subassembly. “We completed 70% of the final product,” says de Haas.
Philips remains an important customer for Bianor, and de Haas believes this will remain so moving forward. Faced with growing domestic markets in China and elsewhere in Asia, multinational corporations are starting to realize that they cannot produce everything in Asia. “They have to source regionally for regional markets,” he argues.
Ben Harrison President and CEO, Kaysun Corp.
The best defense against a tough market is proving to be, among other things, a strong offense in bidding for and winning defense-related applications, according to Ben Harrison, who runs Kaysun Corp. (Manitowoc, WI), a family-owned custom injection molder. The company has been successful in a number of markets, but of late is seeing especially strong demand for its services from the defense and medical industries. Having these two industries in its corner also has helped it avoid some of the “heavy migration [of work] to low-cost manufacturing countries,” notes Harrison. “We’ve found the way to be successful is to provide the customer with more, and to be involved in difficult projects,” he adds.
That focus paid off big last year when his company, which employs about 150, won two supplier awards (Lean Initiative and Plastic Supplier of the Year) from Rockwell Collins, the only one of the communications and aviation electronics OEM’s 20,000 suppliers to win two. “We’ve done a tremendous amount of value-stream mapping and made some big changes, which led to a drop in lead times” for that customer, explains Harrison.
Kaysun wasn’t always so progressive. “Years ago, we just had molding machines and people,” he recalls. But over the years (it was founded in 1947) the company has seen that its customers grow to depend on it increasingly for its engineering resources. Recently, he adds, it has been especially aggressive in employing automation for tasks such as welding, machining, and potting to keep quality high, direct labor costs low, and to maintain high output. “We like to be on the cutting edge of technology,” notes Harrison.
The company also is leading the social media charge, with its own blog (which actually gets updated) and a LinkedIn page. “We’re doing quite a bit of social networking,” he agrees, and says it is starting to reap benefits for the molder. It also started its Partners in Progress program last summer, a series of technical presentations offered as webinars to its customers. “Our clients welcome the help,” he says, noting it’s another way to ensure his firm gets called on for those difficult projects.
Jennifer Kaye President, Plastic Package
While many plastics have faced negative publicity over environmental concerns, among others, the packaging sector has borne the brunt of the assault. Bag bans, BPA, big-box-store packaging scorecards, and more might make it seem like a difficult time for Jennifer Kaye to run her business just on the basis of its name—Plastic Package. While its moniker could carry negative connotations for some, the Sacramento, CA-based thermoformer has taken a number of steps to mitigate its environmental impact and beef up its green credibility. From a zero-landfill policy for scrap, to downgauging, to the use of recycled and bio-based materials, Kaye had already positioned Plastic Package as a sustainable firm before taking the next step last summer and adding solar energy modules to its roof.
“In recent years, plastic packaging has been labeled across the board as environmentally unfriendly when, in fact, this is really not the case,” Kaye says. “There are so many factors that go into manufacturing, storing, and shipping all kinds of packaging, that you can’t just broadly categorize any type of packaging as ‘good’ or ‘bad.’”
Originally founded in 1970 by Corbin Burbank in San Jose, Plastic Package was run out of a garage with one thermoforming line. After a fire in 1984, the company relocated to Sacramento, and in 1986, Burbank sold the business to Jennifer’s father, Jim Kaye. From that time, the Kayes have taken the company from six thermoforming lines to 14, with both pressure- and vacuum-forming systems. About 85% of Plastic Package’s business is used in the food industry, with the balance sold into electronics, retail, and secondary medical. Wherever it’s headed, the product must be sustainable.
“Plastic Package has always believed that packaging can and should be sustainable,” Kaye says. “We believe that it is important to be mindful of the environmental changes going on in the world and how we as a manufacturer contribute to those changes. It is our responsibility to provide our customers and our community with the best, most sustainable package possible.”
Ed Mack II President,
Tri-Mack Plastics Mfg. Corp.
Tri-Mack (Bristol, RI) specializes in molding high-temperature and highly filled thermoplastics for the aerospace industry. Ed Mack II is at the reins of the company that his father founded 30 years ago. “The company was started by my father, who was a polymer chemist studying friction wear. He specialized in high-temperature materials, so the company was founded on the specialized materials that he discovered,” says Mack. “We found applications for these materials in the aerospace industry, and as we worked with this market over the years, we got very adept as problem solvers—as materials experts. We then took our ability to solve problems for customers with these materials and that led us into the technologies we have today.”
Today, the company offers a range of processes and solutions to its customers, including compression molding, which led the company into injection molding of high-temperature materials such as polyamide and polyimide—like Torlon—and highly filled materials. The company has 16 injection molding presses from 28-600 tons.
“Over the years, many new opportunities came up and we started working on many different kinds of parts with highly engineered performance requirements, for which high-temperature reinforced plastics were an ideal solution,” explains Mack. “Through our expertise as problem solvers, we were able to expand our capabilities tremendously to grow the company.” (Ed.: Learn more about the company at plasticstoday.com/mpw; search for Ed Mack.)
Daisuke Ono President, Ono Sangyo
Ono Sangyo is no newcomer to the plastics industry, having started processing celluloid way back in 1924. But since the start of the millennium, the Japanese processor, based out of Soka just north of Tokyo, has devoted significant effort to development of its Rapid Heat Cycle Molding (RHCM) process (December 2009 MPW, p. 16). And rather than keep the technology in-house as a competitive advantage, company president Daisuke Ono has spared no effort through licensing to popularize the technology for producing plastic components with superior surface finishes not only in Japan but also globally.
“In our marketing efforts, we found that potential customers were not only active in Japan, but had global operations and wanted all of these served,” recalls Ono. “Rather than establish new plants in the U.S., Europe, China, and Southeast Asia, we decided to license to other processors who operated in these areas.”
In Japan, Ono Sangyo makes the process available to processors in complementary product areas. And practicing what it preaches, 27 of Ono Sangyo’s 60 injection machines at its three molding sites in Japan are equipped with RHCM.
Offshore licensing represents the first phase of Ono Sangyo’s “market in” strategy of manufacturing where there is market demand. “The second phase is collaboration, and phase three is to grow the collaboration into an equity partnership with the licensee,” says Ono. This strategy is reflected in Ono Sangyo acquiring about 16% of Singaporean processor Fischer Tech. Ono Sangyo will assist Fischer Tech in installing RHCM equipment at its plants in China, Thailand, and Singapore.
Ono Sangyo also has its sights set on applying RHCM to biodegradable resins. “Despite the stormy passage of COP15 [the 15th Conference of the Parties at the 2009 United Nations Climate Change Conference], the shift from petroleum-based plastics to plant-derived plastics will inevitably continue, and we intend to respond through R&D and marketing efforts,” says Ono.
Joe Pregont President and CEO, Prent Technologies
Preparing for a red-eye flight to Copenhagen to check in on his company’s newest facility, Joe Pregont, president and CEO of custom thin-gauge thermoformer Prent Thermoforming (Janesville, WI), seems far removed from his first job with the company: sweeping its floors as an eight-year-old. Founded by his parents Jack and Carol Pregont in 1967, the company has also come a long way since Joe first took on odd jobs there. Today it positions itself as a global thermoformed-packaging supplier with seven plants worldwide, spread among the Americas, China, Malaysia, Singapore, and the aforementioned newest site in Denmark. Prior to opening the new Danish plant, the company unveiled a new site in Shanghai, transitioning from its original Chinese operation, which finally outgrew its footprint after expanding three times in the five years since it opened.
From an entrepreneurial adventure embarked on by his parents to a global player in its market, one constant for Prent has been Pregont. “I was pretty focused,” Pregont says. “I wanted to be in the family business.” Furthering that end, when Pregont went to college, it was to University of Wisconsin–Stout, where he earned a degree in industrial technology and packaging. He graduated in 1981 and became CEO of Prent in 1985 at only 26. “I was pretty young,” Pregont jokes. “Now I’m old.”
In the intervening years since he took the reins in his mid-20s, Pregont estimates that he has expanded Prent by some 15 times from its size in terms of sales, machinery, and employees, among other metrics.
“We were a small, single-plant operation at the time that I became the CEO,” Pregont says. “We had a great foundation to work from—a profitable company, a well-run company, great people—and I just set out to set my targets on some different levels of the industry and achieved that. Through strategic planning I established that we should be a global supplier to our global customers.”
As he readied for his trans-Atlantic flight that evening, Pregont told MPW such globe-hopping isn’t optional in today’s industry. “We have to go where our customers are,” Pregont explains. “We can’t stay in Janesville, WI and ship product all over the world and be competitive.”
Brian Ray President, Ray Products Inc.
One of North America’s best-known industrial parts thermoformers, with a reputation beyond the continent’s borders, Ray Products Inc. (Ontario, CA) is a full-service company offering pressure- and vacuum-forming for heavy-gauge parts. The company, more than six decades old, is currently headed by Brian Ray, the third generation, who serves as its president. Under his direction, the company has grown in technology sophistication and capabilities to serve a variety of industries in heavy-gauge parts requirements, including the medical, electronics, telecommunications, pool and spa, transportation, and green industries such as solar and wind.
In 2005, Ray took a big step forward by acquiring the largest rotary thermoforming machine in the western U.S. Investments also have been made in human capital with ongoing employee training in lean principles and more.
“Each generation is faced with challenges, and my generation is no different,” Ray comments. “To continue manufacturing in this country, ownership needs to be focused on advancing process capabilities to maintain a leadership role. With that said, the education of the workforce, as well as the customer base, is critical. A highly skilled workforce with no customers to manufacture product for is not going to work, nor will a customer base that demands capabilities that cannot be met. It is critical to maintain close communication with your employees and your customers to ensure that the capabilities that you offer meet the expectations of the customers and markets you serve.”
Ray has continued the company’s legacy of also working closely with industry trade groups, in particular the SPE Thermoforming Div. Ray was the Chair of the 2008-2010 Executive Committee for the division.
Jim Robinson President, Burger & Brown Engineering
Although probably best known in the industry as a supplier of products and molds, Burger & Brown Engineering (Grandview, MO) also has its own processing operation, and a whole lot more. The company started as Burger Engineering in 1978, founded by Phil Burger, and in 1982 began building injection molds for area plastics companies. During that time, Burger Engineering developed several accessories for molders and launched its Smartflow product line.
Mark Brown joined the firm in 1994 as VP after working for six years in the confectionary industry, automating processes as a mechanical engineer. By 1997, he had purchased a minority position in the company and assumed responsibility for daily operations. In 2002, the company name was officially changed to Burger & Brown Engineering. Brown, who served as president from 2005 until Jan. 1 of this year, is now CEO and chairman of the company.
Starting this year, Jim Robinson was appointed president of Burger & Brown, and comes to the company with 35 years of manufacturing and engineering experience. “Much of our success over the past three decades can be attributed to the fact that we are an engineering company with diversity,” says Robinson. “We didn’t take the route of the typical contract manufacturing, moldmaking, or molding company, but also offer the design and manufacture of special machines, contract quality assurance, product development, and a line of products for the molding industry, which enhanced our full-service approach to our customer base.
“I’m excited about being part of Burger & Brown Engineering,” Robinson states. “I’ve known of them and worked with them for 25 years, and I feel fortunate to now have the opportunity to work with a group that I’ve respected for such a long period of time. [This year] looks very promising; our current customers are seeing improvements to their businesses and we see many new opportunities as we move forward.”
Neil Shillingford CEO, Pexco
Taking over a multi-site processing organization in the midst of the worst market conditions since the 1930s would seem, well, to be a bit of a thankless promotion. But for Neil Shillingford, promoted last October to be CEO at Pexco, the timing is perfect. “Our owners are very acquisitive. We will definitely expect to buy at least two businesses in 2010,” he says.
Pexco is the new and unifying name for a group of profile and sheet extrusion businesses formerly owned by publicly traded Bunzl, then acquired by Filtrona Extrusion and subsequently taken private. “In private equity hands, you can be more open-minded than as a public company,” he says, noting potential acquisitions need not mirror his company’s current operations; they need only be good businesses.
New business also is expected through internal growth, and the company hired salespeople last year to that effect. “Our management team rode through the biggest downturn by flexing our costs—we lost no assets or key people,” he recalls. Too many competitors, he thinks, lack such flexibility in their costs, “so they made cuts that later they’ll regret. . . . I think if anything, this period has brought us closer to some of our largest customers” as they are more appreciative of a stable supplier. “There are fewer buffers in the supply chain, so JIT [just-in-time delivery] is even more important. . . . I think 2010 will be a better year.” —firstname.lastname@example.org