After acquiring its key competitor earlier this year, it didn’t take long for officials at U.S. Block Windows to recognize that logistics issues plus their own low-cost captive molding capacity were reason enough to pull molds from a Chinese processor and bring them to its own captive molding facility in western Florida. The company also pulled some extrusion tooling from overseas and now has that work done by processors in the U.S.
The acquisition provided a good opportunity for the new owner to consider its options, recalled Roger Murphy, president of U.S. Block Windows (Pensacola, FL). “We’ve always molded our product; Hy-Lite had never done so. They used to contract with Mission Plastics in California for many years. But at some point they moved some of the work to Canada and some to China. The vast majority of their contract molding was being handled in China.”
On the materials side, both companies sourced, and source, their acrylic from Cyro Industries in Philadelphia, PA. Hy-Lite had been shipping the material to China for molding, and then bringing back the blocks. For Hy-Lite, said Murphy, contracting the workout was seen as a lower-cost option to purchasing and running a molding facility. “But when we analyzed it, we saw that it made no sense…we immediately pulled the molds,” he said.
The company’s challenge, he explained, is the number of different blocks it markets. “Hy-Lite had a lot of inventory, and they had to have it due to the long lead times” when shipping from overseas, he explained. “The value (in China) can make sense in a busy market and if you don’t have your own captive processing,” he said. “But we’re comparing with our in-house molding costs, and the costs aren’t that much more here.” Should demand surge, the company has identified a contract molder in Ohio as its backup.
Plus, he added, “They (Hy-Lite) were tying up a lot of capital in inventory. Having control (of captive molding) makes it a simpler logistics issue. The closer to JIT (just-in-time) delivery, the better,” he added, noting this is especially true during a downturn, such as the U.S. residential housing market has experienced, and an upturn, which he says is in progress, albeit slowly. Murphy noted, “We have purchased additional injection molding equipment and added nine employees to our Pensacola molding department to move this work in-house. We anticipate hiring more employees as the housing market recovers and demand for our products increase.” —[email protected]