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August 22, 1998

5 Min Read
Working with an enterprise zone

Things tend to move pretty fast in the molding business. At least that's been true for Steve Buchenroth, president of World Class Plastics Inc., Lakeview, OH. World Class Plastics will relocate in February to a new 32,000-sq-ft facility, having grown in just three years from a start-up business doing $186,000 its first year to a business expected to do $6.5 million in 1998.

Buchenroth, a pilot with experience in both the Air Force and Air National Guard after graduating from college in 1986, was hired by Precision Custom Products (DeGraff, OH) to fly corporately and to do special projects. He quickly escalated to director of manufacturing and, "partially because I had the ability to fly places," to sales. He left in 1994.

Buchenroth and ex-Precision engineer Scott Wisniewski began talking about forming their own company. One of Precision's clients had been considered extraordinarily demanding, and when Buchenroth learned that Precision might opt out of working with the client, he saw an opportunity. He approached the client and said that his and Wisniewski's new company, World Class Plastics, could and would meet the client's demands. "We knew that the minute we got one customer that would be all it would take to get a press rolling," he says.

Although initially the company wasn't especially interested, "it eventually warmed up. That opened the door for us," Buchenroth says. He and Wisniewski soon rented a 5000-sq-ft facility, "assessed our strengths and weaknesses," and brought in another partner, Neal Schroer, as executive vice president. Each partner put up $10,000 and became equal owners, an arrangement that continues today.

Next, terms were negotiated with Sumitomo for a 100-ton press. A month later, a used 40-ton Arburg was purchased, and - molding small tight-tolerance parts such as clips and fasteners - the trio watched business take off in September 1994. "If our customer called at 2 p.m. and said he needed a part that we'd never molded before on the dock by 6 p.m." says Buchenroth, "we would get it to the customer."

World Class soon picked up two more customers. One was Winchester Technologies of Kentucky. "That company called on a Tuesday asking us to come to Lexington on Friday to give a quote. It had other companies coming in on Wednesday and Thursday. I told its people I'd be there right away if they'd see me. They said, 'Well, okay, but it's a long drive and we don't want you here at 5 p.m.' So I jumped into a King Air and flew down, and 3 hours later we quoted the job to them on a laptop computer at their conference table. They were amazed. They liked our service. "

Managing the Growth

World Class Plastics now leases 10,000 sq ft of space and in 1997 will do about $3.7 million in business using 14 presses running 24 hours a day to mold cams, gears, bearings, clips, and fasteners. The original customer is still the company's largest; another major customer is North American Sankyo Corp. A new contract to mold and assemble air ducts was also recently signed with a major automotive supplier. Materials molded include nylon, ABS, acetal, thermoplastic elastomers, and polyolefins.

With such rapid growth, it has become increasingly obvious that a new facility was essential. Logan County, in which World Class is located, has two enterprise zones, one of which is three miles away from World Class Plastics' current location and offered an attractive relocation site. "But nobody seemed to know what we needed to do to get into an enterprise zone," says Buchenroth. "Then we connected with the new president of the Greater Logan County Area's Chamber of Commerce, Ed Wallace, and he worked with us and the state of Ohio, the state's Office of Tax Incentives, and the Ohio Dept. of Development to get a waiver to make it possible for us to locate there."

Enterprise zones are designed to facilitate tax incentives for new businesses and companies locating from other states, not to encourage existing companies to move 3 miles down the road. To obtain a waiver, a company must meet two criteria: one, that the company is out of space, and two, that it is willing to move to another state.

"We are out of space, no doubt. And although we didn't want to move to another state, we would have. We certainly investigated that, and we were being offered incentives to do so," comments Buchenroth. After all the negotiations were finished, the company got a 60 percent personal property tax abatement and a 60 percent real property tax abatement for 10 years. When World Class Plastics moves, it will change its utilities provider to Logan County Co-op, which is considerably cheaper per kilowatt hour than its current provider.

The new building, plus land, will cost $1 million. Financing is through Huntington National Bank of Ohio and the Ohio Statewide Development Corp., a privately held company that sells AAA bonds guaranteed by the SBA.

All World Class Plastics employees receive extensive orientation (such as what the plastics industry is all about and the company's service philosophy) and in-house training (Paulson videos, safety). One of the company's goals is to achieve ISO 9000 certification by March 1998 and QS 9000 by December 1998.

"We've had wonderful success with our customers," notes Buchenroth. "They've treated us great, and we've carved a niche that is different from anybody else's. We promise delivery within 24 hours, and that's really opened the door for us," he adds.

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