Moll charges up acquisition hill

Injection molder Moll Industries Inc. has made some key acquisitions recently, expanding its geographic reach as well as its customer list and capacity. Next stop is Asia, according to president Ron Embree.

Embree spoke with MPW in his firm''s administrative office in Dallas, TX on Jan. 31, the day Moll closed its acquisition of Mexican appliance parts molder Formec, based in Monterrey. Moll grew rapidly via acquisition in the 1990s but, unable to service its debt, went into Chapter 11 bankruptcy in 2002 and was taken over by its chief lender, Highland Capital Management.

The firm exited Chapter 11 in June 2003, but not before disposing of its facilities in Europe, some in the U.S., and its previous leadership. The Formec purchase was Moll''s first foray outside the U.S. since then, but not its last, as the firm announced in early February it also had bought InteSys Technologies Inc. from conglomerate Textron (Providence, RI). The InteSys deal included facilities in Ireland, Mexico, and California.

Moll did not release terms of either deal. Embree, who took the reigns in October 2003, says the firm is en route to again being a global player, but will not make the acquisition mistakes of the 1990s. "We are now strategically expanding on what we know well," he says. "We are not and do not pretend to be all things to all people."

Dana Gecker, marketing manager, adds, "The kind of acquisition and growth we are doing now is different than it used to be. We focus very closely on investing in alignment with our customers," she says. Adds Embree, "We only go into business that is not going to be commodity and eventually sent to Asia [or other low-wage regions]." He says expansion, when it comes, will be within the three markets that Moll serves: appliances, medical, and consumer products.

Embree says the firm''s re-entry into Europe, and expansion in the U.S. and Mexico, is not the final hurrah. Prior to the InteSys purchase, he said, "Europe will happen before Asia, but Asia is right behind," and that Moll will have a footprint in Asia before year''s end.

The appliance market accounts for about 60% of sales (Whirlpool is a key account), and medical, 25% to 30%. Embree says the goal is to have the three markets in balance and says acquisitions will help reach that goal. Last year the firm acquired the assets and customer list of Creative Plastic Molders Inc. (Lexington, NC) and that location became its East Coast consumer parts production center, enabling it to focus medical parts processing in the region at its facility in Seagrove, NC.

While Formec''s experience is mostly in molding parts for home appliances, the larger InteSys acquisition will have more impact on Moll''s medical products processing. InteSys had a relationship with an unidentified Chinese moldmaker, which Embree says Moll will maintain and develop.

Focusing the corporate culture

Embree came up through the ranks at Moll, including running the firm''s largest facility in Ft. Smith, AR, and has spent a total of 14 years there. As president, he says he has worked to rid the firm of any internal struggles wherein a manager might be more concerned with hitting his numbers than advancing the greater goals of the firm.

"The bottom line is the very bottom line," Embree says, encouraging employees to work together and not be as concerned with their piece of the pie. That does not mean all is peace, love, and understanding at Moll. Though the firm has an informal corporate culture, Embree says, "I encourage conflict...The only way to improve is to change. If you''re not changing, you''re stagnating."

"I work at getting everyone focused on the goal," Embree says. Part of that includes frequent use of Six Sigma quality improvement strategies. "We measure everything," he says, and tries to ensure the firm has Black Belt-trained managers in each of its plants.

Moll uses technology as a differentiating factor. The firm is considering expanding its portfolio to include blowmolding, extrusion, or other plastics processes. "We don''t do vertical integration so much as hub integration," which he explains as adding whatever skills are necessary to complete a project.

With the recent acquisitions, Moll now has about 270 injection presses. Assembly has also become a large part of the firm''s business. "We couldn''t survive as a shoot-and-ship molder," he says. But the firm''s current strategy is geared for more than simply survival. "Our finances are in very good order and our owners are very aggressive about strategic acquisitions," he says. Last year the firm''s VP of sales and marketing, Joe Pack, beefed up his sales staff, too. Embree, forecast 2005 sales growth of more than 20%, even before the firm''s recent acquisitions.

Over the last 60 years, Moll has seen long, steady growth, then swift, heady growth, followed by a financial fall. Now the firm wants to move forward aggressively, but on solid footing. How well it succeeds will be worth watching.

Matthew Defosse [email protected]