Charlotte-based building supply company Tucker-Kirby has been a well-known and respected name in the Charlotte business community for many years now. Founded in 1920 by W. F. Tucker Sr. and Robin S. Kirby Sr. as Tucker-Kirby Hardware Co., it was originally located at the corner of W. Ninth Street and Railroad.
“You can still see a portion of the foundation of the building,” beams Terry Ward, vice president of Tucker-Kirby, who recently located the exact site.
A couple of years later, the company moved westward to Palmer Street and Railroad, where it remained for over 80 years before eventually losing the property to railroad acquisition. In 2004, it moved to its present location anchoring the Wilkinson Park Business Center. Says Ward, “We’re still on the same route, just farther down.”
Bill McKinnell IV, company president, explains, “We needed to expand, but we needed to still be in the vicinity of uptown. Much of our business is generated by uptown construction, and being close to uptown is good for ‘pickup business’—work that can be handled by pickup truck.”
Set in Cement
For more than 90 years, Tucker-Kirby Co. has been a recognized provider of concrete, masonry, waterproofing and geotextiles for the residential, commercial and industrial building markets in the Carolinas. It sells to general contractors, subcontractors and top masons involved in the building of high-rise buildings, schools, medical and sports complexes, dormitories, supermarkets, big-box stores such as Wal-Marts and Sam’s Clubs and others.
It has been a supplier for a major Camp LeJeune military project, the largest masonry project in North Carolina’s history, the Apple Data Center in Lincoln County, and the Charlotte Motor Speedway’s zMAX Dragway Complex.
In addition to its headquarter facilities in Charlotte, Tucker-Kirby now has two other branches, one in the Raleigh/Apex area and the other in Columbia, S.C. These expansions have allowed the company to continue to grow its presence in the Carolinas and to follow its contractor clients into other states including Georgia, Tennessee, Mississippi, Kansas, Nebraska and Colorado.
The products Tucker-Kirby sells represent six divisions of the 16 divisions of construction as defined by the Construction Specifications Institute’s MasterFormat. They are: Site work and Drainage, Concrete, Masonry, Waterproofing, Finishes, and Specialties. The bulk of the company’s multi-million-dollar revenue comes from sales related to the concrete, masonry and waterproofing divisions.
Products include such items as ADA mats, concrete stains, curing and sealing compounds, epoxies, expansion joint material, concrete form materials, reinforcing mesh, rebar, vapor barriers, masonry cement and mortar, reinforcing wall bracing materials, flashing, anchors and ties, silicone and urethane caulk systems, rubberized asphaltic sheet membrane, fire safing insulation and rigid foam insulation.
“We don’t sell ready mix concrete, but we sell all the accessories—everything that’s below that concrete—and we don’t sell brick and block, but we sell the accessories to make them work,” explains Ward.
“When you see a concrete or masonry building, it’s not just a box,” continues McKinnell, “there’s quite an infrastructure to it. You have to tie that masonry in with metal ties and anchors and waterproof it. On a typical project, we could have $100,000 in materials in a building and none of it would be visible once the building is finished.”
Currently, approximately 60 percent of revenue comes from masonry-related sales and 40 percent concrete-related sales. Tucker-Kirby also sells pre-mixed bag goods, primarily for construction projects in urban areas too tight for the big concrete mixer trucks to get on site. “Ten days out of the month we are sending tractor trailer loads to Wal-Mart construction sites,” says McKinnell.
The bids that Tucker-Kirby prepares and the products it sells are “spec-driven,” or specified by the architectural plans and specifications of a given construction project.
“For this reason, our sales people are well-trained; many are certified in masonry and/or tilt wall casting,” says McKinnell, who credits much of the company’s success to its knowledgeable sales force. “Our people know the product line, the industry and they can read the plans and specifications. Our customers can feel confident that our quotes reflect the plans.”
“We don’t have order takers,” adds Ward. “We have true salespeople and we truly want to be a partner to our customers.” He says that Tucker-Kirby works closely with the North Carolina Masonry Contractors Association and participates in its certification programs: “They used to be just for masons; now we send our people to them.”
With regard to competition Ward says, “Everybody’s prices are basically the same. There’s not a nickel’s worth of difference between our prices. It boils down to us having the knowledge and the service to get the business,” says Ward. “Some of our competitors have tens of branches; others have hundreds, but we—with our three branches—are the workhorse for the masonry and the tilt side of construction in the region.”
A Cohesive Block
The Tucker-Kirby sales force starts out in the warehouse. “I came up through that route,” says McKinnell. “It makes a difference. The average person wouldn’t know anything about this business. We have 10,000 different products to learn about.”
Between the three branches, Tucker-Kirby employs 28 people. “A business is no better than its people and we have great people,” affirms McKinnell
Tucker-Kirby is the quintessential family business. While none of the company’s ownership, management or staff have been related to either the Tucker or Kirby families since the McKinnell family bought the business in 1984, a significant number of them are related to the McKinnells as spouses, in-laws, siblings, sons and daughters.
“We have lots of family members who work here, not just our family but multiple members of other families,” says Ward, who is married to McKinnell IV’s sister who also used to work for the company.
“Nepotism laws don’t apply here,” assures Bill McKinnell III, who represents the second generation of McKinnells to own Tucker-Kirby. “We like it this way. We operate as a family and it works smoothly.”
His father, Bill McKinnell Jr., attended The Citadel in Charleston and went to study at Kings Business School in Charlotte. Mr. Tucker and Mr. Kirby approached the school for possible candidates to work in their company.
“The school recommended my father,” says McKinnell III. “He came in 1930 and stayed for 45 years, moving up the ranks from sales to management to part-owner of the company in 1964.”
McKinnell III then came on board in 1966. “My Dad said he would continue to call me Billy but everyone else had to call me Bill and I was expected to carry my own weight. I didn’t want to be just like everybody else; I wanted to do better,” says McKinnell III.
Before retiring in 1975, McKinnell Jr. witnessed the sale of the company in 1974 to a Florida-based entity that had a building supply division.
“It was a good marriage for a while but the Florida company got into financial trouble and started draining the cash assets of the former Tucker-Kirby,” says McKinnell III. The company was involved in Florida real estate and went under, forced to turn the business over to the bank in 1984. By this time, Bill McKinnell IV had been on board since 1977. McKinnell III and McKinnell IV, father and son, bought out the company in 1984. Ward started work at Tucker-Kirby in 1985.
“We refer to that time prior to buying the company as ‘the dark days,’” says McKinnell IV. “It was a learning experience and a bump in the road.”
It was more than a decade later, in 1997, that McKinnell IV and Ward describe how they helped prompted McKinnell III’s retirement in a good-natured way. “He had been talking about it for a number of years, but hadn’t set a date or planned anything,” says Ward. “So, Bill and I got together and threw him a surprise retirement party with 300-400 people in attendance, including customers.”
Nowadays, McKinnell III admits, “I don’t come here much anymore, but I’m always interested in what they’re up to.”
Ward and the McKinnells are all natives of Charlotte. Ward came to the company straight out of high school. McKinnell IV was just 15 credit-hours shy of earning a degree from UNC at Charlotte. “A job opened up that I wanted and I promised my folks that I would go back and finish,” says McKinnell IV. That didn’t happen but the company presidency ultimately did.
“Very few of our employees have four-year degrees but they are highly trained professionals; knowledgeable in their jobs,” affirms McKinnell IV.
Strength in Construction
For Tucker-Kirby, the downturn in the economy hasn’t inhibited their growth. In 2008 when the downturn began, the company was able to increase staff in the Charlotte office and expand into the Raleigh/Apex market.
“Luckily for us, we had a good bit of work coming in from projects with Duke University Health System, Durham Bulls Stadium and dormitories and other buildings on the campuses of UNC at Chapel Hill, N.C. State University and UNC at Charlotte. Plus, we had branched out to military work,” says Ward. “Federal monies were made available for military and civic work. This pretty much kept us going through the slowdown.”
“Our sales staff had to expand on their core territories to find additional work, but we didn’t suffer any loss of staff due to the downturn,” says McKinnell IV.
Importantly, Tucker-Kirby had also begun to get involved with tilt construction projects, here in Charlotte, the Raleigh area and states outside the Carolinas.
Tilt construction is essentially concrete wall casting for large construction projects. Massive walls are built (poured) sideways on top of the building’s concrete floor slab or pad before being tilted (lifted) into place by a crane.
“We sell the release agent that is applied so the wall won’t stick to the pad,” explains Tim Stewart, Tucker-Kirby’s tilt specialist. The walls are built with lifting inserts that enable the crane to erect the walls without breakage. Walls can be stories high or several walls stacked on top of each other.
“One of our vendors has recently come out with an insert capable of supporting 24,000 pounds,” continues Stewart. Only two companies in the nation are authorized to sell these—we are one of them.”
Tucker-Kirby also owns bracing equipment that can be taken to construction sites. “That also gives us an advantage in the marketplace,” says Ward.
The expansion to Raleigh has paid off.
“Since opening the doors in 2007, the Tucker-Kirby Raleigh location has focused heavily on the service aspect of contractors’ needs along with a great sense of urgency on delivery schedules. Growing the product offering has also been a major focus aligning the company with top-ranked equipment lines in the industry like EDCO Masonry Saws, EZ Grout Mixers and STIHL,” says Guy Harrigan, operations manager of the Apex office.
“This, in addition to the material inventory levels in stock, speaks volumes about Tucker-Kirby’s partnership commitment to the contractor and has allowed the company to grow even in a very sluggish economy,” he adds.
Looking down the road, Ward expects the company to expand to other areas. “We’ll do our research on places and figure out where we need to be.”
A Uniform Mix
The masonry industry has its fun and competitive side. One of Tucker-Kirby’s vendors sponsors the Spec Mix Bricklayer 500, an annual fastest bricklaying trial competition between regions. The winner enjoys a trip to Las Vegas for the company’s annual convention, and has the opportunity to compete for the World’s Best Bricklayer title against winning masons from around the globe.
“Last year we were asked to host the trial competitions,” offers McKinnell. “Well over 200 people were in attendance at our facilities. We’ve been honored to be chosen to host the event again this year,” says McKinnell.
Despite the ownership changes from the original lineage, the McKinnells were never tempted to change the name of the company. “The Tucker-Kirby name was so well known when we bought the company,” says McKinnell, “that changing the name would have been a big mistake; it would have required a total rebranding. It was a case of ‘If it’s not broke, don’t fix it.’”
“We’ve even had the same phone number for decades,” adds McKinnell III with a chuckle. “Customers know us.”
It’s not surprising that the company has an adage that says, “If people come to work at Tucker-Kirby, they retire at Tucker-Kirby.”
“It’s always been like that,” attests McKinnell. “It’s a good solid company with a good reputation and fair pay. I think that’s what’s made it so successful.”
John Norman thought he was in college studying to become an engineer, when he realized he had a proclivity for accounting. He completed his bachelor’s degree in business administration and a master’s in taxation from the University of South Carolina, and joined up with Charlotte’s PricewaterhouseCoopers as a tax consultant. That was the early ’90s and already he was developing a passion for small to mid-sized companies doing business internationally.
Unraveling the complex tax laws governing foreign-owned businesses became his niche. He enjoyed solving problems while developing business relationships. When Norman learned of GreerWalker LLP and its focus on middle-market companies and international affiliations, he realized its business model closely aligned with his interests and joined as a senior associate in 1993.
Today, he has overall responsibility for the firm’s global services and manufacturing and distribution practice, and is managing director of its exit planning and investment bank affiliate, GreerWalker Corporate Finance, LLC. In short, he specializes in resolving international tax issues for foreign firms doing business in the U.S., as well as U.S. firms doing business in foreign countries. He is considered an expert in mergers and acquisitions, transfer pricing, entity selection, entity structure and ownership changes.
With just a receptionist, Charlie Greer and Kevin Walker started the firm in 1984 primarily to serve manufacturers and distributors. The practice has changed drastically in 35 years. Today, GreerWalker has 12 partners and over 100 associates, and is one of the 10 largest CPA firms in the Charlotte region and considered among the top 200 CPA firms in the nation. It is also the exclusive Charlotte member firm of PKF International, one of the world’s largest networks of independent accountant associations.
“It’s been all organic growth,” says Greer. “We’ve never had a merger.” About 25 percent of the firm’s clients are international.
When Norman joined GreerWalker 20 years ago, he says, “Everybody was doing total quality management, which is looking at your processes to determine how to become viable and independent.”
That’s when it became evident to Greer and Walker that they needed to delve into international markets, to offer global services, to avoid losing business. “Now we’re on the offense with it,” he asserts.
“Nowadays,” Norman emphasizes, “there’s no such thing as international business. If you’re in business, you’re going to have to deal globally. But,” he insists, “being effective in a global arena requires team effort.”
Klaus Becker, honorary consul of Germany, has worked with Greer and Walker for over 30 years. “They go out on a limb to be good corporate citizens and to interact with people,” says Becker.
Becker, president of Nirosteel LLC, considers the firm’s close ties with the community instrumental in developing strong business relationships. The three met when both companies operated out of 112 S. Tryon Street.
“They really do an excellent job of supporting the German community,” offers Becker. GreerWalker also supports the consul and the German American Chamber of Commerce. The firm’s generous investments include organizing seminars and supporting German-related speaking events.
“I really admire Kevin and Charlie,” admits Becker. “They’ve worked very hard to become the largest privately-held CPA firm founded in Charlotte.”
Under Norman’s leadership, the firm’s global services have steadily grown. About 80 percent of Norman’s time is dedicated to tax planning, compliance and consulting services for a wide range of international businesses.
While global business is essential to the firm’s continued growth, the company also specializes in real estate, construction and motor sports. Greer says, “It’s a rarity for a firm our size to have such a strong international tax practice.”
Greer credits the firm’s team model with setting it apart from other CPA practices. “Every client is a client of the firm and not the individual partner, so there’s a sharing of clients that you don’t see at other firms,” explains Greer. “Whenever a client gets into an international situation or is going to Germany and Italy,” comments Greer, “we automatically get John involved.”
“John’s always focused on what’s best for the client in everything he does,” says David Jones, a fellow partner who specializes in manufacturing, distribution and international business. “He creates relationships with clients that are more than just professional and client. They’re friendships,” he says.
“John’s very practical and has dealt with a lot of different businesses over time and not only helps people make tax decisions, but also helps with general business planning,” adds Jones. “There are many professionals that approach taxes and assurance as if they were a product, but have very little interaction with their clients. We as a firm, but John in particular, strive to be a lot more than that—we constantly talk what else we can do to help our clients.”
For example, it’s not unusual for GreerWalker advisors to discuss buy-sell agreements with clients, life insurance for owners and other non-tax or assurance-related business transactions. According to Jones, companies must take into consideration several aspects to succeed in global business, and Norman is extremely thorough in covering all the bases.
Client loyalty has been a key factor in the firm’s steady growth. Repeat business long-term from middle-market companies has been essential. “One Chinese company was about $2 million when they started with us,” says Norman. “Now they’re about $200 million.”
Over the last decade, changing economic circumstances necessitating doing business outside the country have contributed to growth. A decade ago, East Coast residents viewed California as a foreign country, jokes Norman, a native of Akron, Ohio. Today, his practice has dozens of U.S. privately held middle-market companies that have survived by globalizing.
In the mid-1990s, U.S. textile and apparel companies made up the first big wave of outbound work. “To remain competitive, they had to go south,” Norman says. “To get around intensive labor costs, they produced in Mexico, Honduras and Guatemala. Those that didn’t, closed.”
Before setting up shop in another country, small privately-owned firms need someone who understands the impact structures can have on company profits and navigate through complex U.S. international tax laws. That’s Norman’s specialty.
“The U.S. international tax law is really written for the old multinationals in the ’60s, and it hasn’t really been upgraded,” comments Norman. “For privately-held businesses, there are some really unfortunate hoops and quirks that can result in seriously negative effects.”
In terms of global markets, the international arena is broken into two categories: Inbound is when companies originating outside the U.S. come here; outbound is when U.S. companies do business in other countries.
When engaged globally, it is important to realize it is not a level playing field. For example, one major mistake businesses make is assuming they’re eligible for indirect foreign tax credits. “If you pay taxes in another country on your income there, that credit does not naturally flow back to you as a U.S. owner,” explains Norman. “So you end up paying twice on that same income unless you do some tax planning.”
That is the type of situation where clients need skilled tax advisors who understand international tax laws, effectively tax planning to ensure clients receive all the credits to which they are entitled. Through market analyses, advisors also help clients avoid setting up facilities in jurisdictions that are heavily taxed.
By staying abreast of international market trends in distribution and manufacturing, the firm helps clients operate more profitably. For example, in the global apparel manufacturing business, the high fashion industry has 13 seasons, rather than four. Fashion industry colors rotate every month to keep apparel trends fresh. If it takes designers six weeks to finalize color schemes, manufacturers aren’t able to produce apparel in China and get it to U.S. stores in time.
As a result, over the last several years, much of the high fashion production has shifted back to the western hemisphere. Some has returned to the U.S. while some has gone to nearby Honduras, where there’s only a three-week turnaround. But more of the higher-end products are being made in North and South America.
While relocations of giant manufacturers like BMW, Siemens and Boeing make headlines, small family-owned foreign businesses bring their share of jobs to the region. They may create 20 to 30 jobs at a time, but it’s not insignificant.
Norman and his colleagues get a lot of new clients from working with the Charlotte Chamber of Commerce and the Charlotte Regional Partnership as they bring companies to the area. They also get business referrals from local law firms, bankers and PKF International. When companies express interest in Mecklenburg County, GreerWalker advisors sit down with them to review tax structure, business structure and incentives to come.
Norman points out that Charlotte’s central geographic location makes it extremely marketable. The accessibility to Charleston ports, a major airport and the trucking industry make the Charlotte region a prime location. The area’s well-educated, well-trained workforce and openness to diverse groups is another plus, he says.
“When I came to Charlotte, basically what I was told was it didn’t matter where you came from or what you did,” recalls Norman. “Just get involved in some community organization and give back to the community, and you’ll be accepted.” He finds that attitude equally applicable to the community’s broad acceptance of foreign firms.
“It doesn’t matter if you’re from Germany, Japan or China; the expectation is that if you give back to the community, you’re going to be accepted,” says Norman.
International business inevitably depends on relationships at the local level. For example, a foreign manufacturer inbound has to ensure a continuous production cycle for dependable distribution of its product. That means it has to have local resources readily available—repair parts and service technicians—for its production processes, otherwise production stops.
“So the only way to increase sales and be accepted in the U.S. market is if you have spare parts and technicians that are available right away, not days away,” says Norman.
Norman points to a German machine tool maker for textiles that actually set up sales and service companies in the U.S. The same thing is happening now with Chinese companies. Being local also lowers shipping costs. One client that makes machines used in nonwoven textiles noted its customer moved all of its production from the U.S. to China five years ago to save on labor cost, but recently brought it back because the savings in the cost of electricity to run the machines far outweighed the labor savings overseas.
According to Norman, location says it all. Two thirds of the U.S. population is one trucking day away, and Charlotte is half way between New York and Miami. Quick access to U.S. Interstates 85 and 77 running north and south and 26 and 40 running east and west are major sellers.
“We are at the center of the hub to reach U.S. markets from a distribution standpoint,” says Norman. “From the airport, service technicians can get anywhere in the world within 24 hours.
“In the ’60s and ’70s, mostly German and other European companies were drawn to the area. Chinese companies mostly settled on the West Coast. But the West Coast is only a third of the U.S. population,” continues Norman, “and going west to east with transportation doesn’t make sense.
“There’s just so much that’s right about Charlotte. I always question when they don’t choose this region. I think we will continue to see more direct investment from Asia.”
Typically, it’s not cost effective for U.S. companies to invest directly in China, but in Hong Kong through Wholly Owned Foreign Entities, known as WOFE’s. Norman says, “It’s a weird thing between China and Hong Kong—same country, but different rules.”
Since Hong Kong has no currency restrictions, U.S. companies can send currency back to the U.S. or anywhere at any time. China has restrictions on getting money out of the country. But there are no restrictions going between China and Hong Kong. Hong Kong has no tax treaty with the U.S., but China does. Because Hong Kong has a 17 percent tax, U.S. companies have to decide if they want to pay the tax and not get a credit, or set up the business to get a flow-through credit and do the surplus.
That’s the type of tax challenge Norman thrives on helping clients understand the implications. “I love problem-solving and thinking outside the box,” he admits. He likens the necessary acuity to math word problems. “If you’re a word problem person, you belong in tax,” says Norman. “That describes tax people.”
A new zeitgeist is growing in Charlotte—a feeling that Charlotte is on the brink of something even larger. And there’s evidence to support that feeling. Things are happening here and around the globe that are and will continue to significantly impact Charlotte as we strive for greater prosperity.
A Global Business Environment
There was a time when being a global company was an exotic idea. Smaller businesses tended to be local; larger ones national. Today, going global is not only a possibility, it is almost a necessity. Consumers, businesses and governments have become accustomed to searching for the best products and services worldwide.
“When you speak about the global competitiveness of the Charlotte region and how we might enhance that going forward, you have to understand we start from a very strong base,” says Michael Almond, CEO of the international business and economic development firm Antaeus Consulting, LLC.
Almond has spent more than 35 years involved in international economic development, most notably as a member of the Council on Foreign Relations from 2007 to 2012 and as president and CEO of the Charlotte Regional Partnership from 1999 to 2005.
“We have a strong manufacturing base, a strong distribution base, energy, banking and finance and health care here,” Almond continues. “Our diversified economy has enabled this region to avoid or be late to join recessions and be quick to recover from them.
“The Charlotte region is a destination market for foreign investment. If you were to combine the gross state product of the two Carolinas and compared that to countries around the globe in terms of GDP, the Carolinas would rank around 15th or 16th in the world.”
Michael Gallis, a transportation and logistics expert and principal of Michael Gallis & Associates, likens our present day attempt to define our future growth to the work 20 years ago by Jerry Orr and others on growing the airport to be an economic force.
“We were maybe third or fourth tier down the line,” says Gallis of the airport’s previous status as a freight center. “We weren’t a global hub, we weren’t a U.S. hub, and we weren’t even really a Southeast hub. We were just a regional hub serving the immediate area.
“‘How does Charlotte get in the game?’ we asked, but we realized the only game to get in was global. Great global hubs around the world are dynamic and successful because they have the greatest access to markets. Trade from around the world passes through them and businesses love them because from them, they get direct access to the world market. Cities like New York, San Francisco, Los Angeles and Atlanta are doing so well because they’re big global access points.”
Ask the Experts
Mark Beattie is a principal with Hickey & Associates, LLC. His firm specializes in global site selection, public incentives and workforce solutions. When evaluating potential business sites, they consider certain key factors fundamental to the search process.
Among them are: availability/cost of land and proximity to major highways, available infrastructure (utilities, sewer/water, power, transportation networks, etc.), site-ready location, cost of doing business, access to raw materials and supply chain, access to logistical support, tax and regulatory environment, availability of labor and wage requirements, location of zone designations that may affect the company, availability of public incentives to offset startup cash and reduce long-term reoccurring costs, and quality of life.
Beattie confirms that Charlotte has many advantages it can use to attract business globally.
“The strength of the businesses that are currently here are a stabilizing influence,” he says. “And Charlotte has grown up. It has greater diversity than ever in terms of its population and business representation. From a global perspective, the more diverse your platform of business and cultural opportunities, the more attractive it is for those considering the area from a foreign direct investment perspective.
“Charlotte also has a good quality of life. People don’t work 24/7 and businesses recognize the importance of an environment where employees feel comfortable and can enjoy their off time. Charlotte is a place of recreation, leisure and cultural engagement. The proximity of the mountains, the sea and other city venues within a two or three hour drive all add to the quality of living here.
“Also the growing visibility and positive reputation of the city is a huge strength in competitiveness,” Beattie continues. “The way that Charlotte handled the Democratic National Convention was very positive and the upcoming soccer match between English Premiere Team League’s Manchester City and Liverpool this August will have the whole world tuning in.
“Our ability to attract world class artists, like when Yo-Yo Ma performed with the Charlotte Symphony a couple of years ago, is recognized in the cultural world. All of these things give Charlotte visibility around the globe.”
His observations are matched with comments for real executives at real businesses choosing to do business from Charlotte.
“I am an advocate for Charlotte. Our relocation from New York City to Charlotte has been nothing short of spectacular,” says Eric Steigerwalt, head of U.S. Retail, a division of Metlife, Inc. which recently moved into new office space in the Ballantyne area of Charlotte. We have been hiring for over 900 positions and we have had over 77,000 applications for these jobs.”
“The numbers work for Charlotte, there is no doubt about that, but what is even more important is the quality of life in Charlotte,” says John Williams, CEO of Domtar, Inc. in nearby Fort Mill. “With its proximity to the mountains and to the shore, and the culture in this community, it is an easy decision.”
How Do We ‘Get in the Game’?
How do we ‘get in the game’? We’re already in it.
A grass roots Charlotte group, dubbed by The Charlotte Observer as the Global Vision Leaders Group, describes the long-term economic vision for the Charlotte region to become “a global hub of international trade”: a great inland port city leveraging its financial, energy, health care, educational, entrepreneurial, manufacturing, and logistical resources to world prominence.
In the ethos Gallis, Tony Zeiss of CPCC and Chase Saunders of the McNair Law Firm, founders of the Global Vision Leaders Group, the Charlotte region will accomplish this through a three-prong initiative: Creating things better than our competitors by adopting entrepreneurialism and innovation as prominent and core values of the region; making things better than our competitors by growing our advanced manufacturing and export base and providing these businesses with world-class employees through exemplary education and training; and moving things faster and cheaper than our competitors through the new Charlotte Regional Intermodal Facility and access to the deep water ports of Charleston and Savannah.
With this vision in place, the Charlotte region enters the global competition. Through this technological disruption of traditional markets how competitive a region’s offerings are across the globe will determine how successful it becomes. Participation in this new marketplace also brings increased competition from around the globe.
Measuring Global Competitiveness
The idea of measuring competitiveness on a global scale may seem daunting, but several respected surveys/reports have come about to do just that—like the Ease of Doing Business Index and the Indices of Economic Freedom—which look at factors affecting economic growth. Neither of these considers as many as the Global Competitiveness Report, which made up of over 110 variables.
The Global Competitiveness Report is an annual report published by the World Economic Forum since 2004. It ranks countries based on the Global Competitiveness Index, which integrates the macroeconomic and the micro/business aspects of competitiveness into a single index.
The report “assesses the ability of countries to provide high levels of prosperity to their citizens. This in turn depends on how productively a country uses available resources. Therefore, the Global Competitiveness Index measures the set of institutions, policies, and factors that set the sustainable current and medium-term levels of economic prosperity.”
The variables evaluated include the following: Institutions, Infrastructure, Macroeconomy, Health and primary education, Higher education and training, Market efficiency, Technological readiness, Business sophistication, and Innovation.
Since 2010, Switzerland has led the ranking as the most competitive economy in the world. The United States, which ranked first for several years, fell to fifth place (behind Switzerland, Singapore, Finland and Germany) due to the consequences of the financial crisis of 2007–2010 and its macroeconomic instability.
Charlotte ranks among the World’s Most Competitive Cities in a report recently released by IBM and Site Selection magazine. Of the top 100 global cities, including many of the larger business meccas: New York, London, Paris, Hong Kong, Singapore, Dubai and like, Charlotte ranks 40th or higher across the board.
In fact, Charlotte was one of only 12 U.S. cities to make the report’s ranking, grouping it among Atlanta, Chicago, Dallas, Detroit, Houston, Los Angeles, Miami, New York, Philadelphia, San Francisco and Washington, D.C.
The analysis replicates the strategic shortlisting process that companies often utilize when making location decisions. It takes qualitative measures such as business environment and quality of life, while also weighing quantitative cost factors.
The study looks at five investment types: international headquarters (35th), shared services (20th), software development (40th), financial services (26th), and life sciences R&D and production (35th), and ranks each city for the different types of business operations based on defined factors. The breakdown enables cities seeking to attract investment to understand their competitive position within each sector and business function.
The report also compared cities “across the board” for overall competitiveness in a cross sector ranking for the qualitative and financial attractiveness. Warning that cross sector scorings possibly hide particular strengths of individual cities, Charlotte weighs in at 74th financially and 33rd in quality. The relative tradeoff is best illustrated by Dhaka, Bangladesh, ranking first financially and last in quality.
For all sectors, the results display a clear tradeoff between quality and cost, with higher quality locations tending to have lower financial attractiveness and vice versa. For cities seeking to attract investment, it is important that they understand their competitive position within each sector and business function, and are able to see how this translates into a particular value proposition to investors within a regional or global context.
A Global Contender
Charlotte has always been at the crossroads of commerce. From its founding in 1768 at the crossing of two Native-American trading paths to its Gold Rush in the early 1800s and the rise of the region’s textile mills and banks, the city is now known as a top U.S. energy hub, the second largest U.S. financial center and third in the nation in world-class health care facilities.
Some of Charlotte’s major advantages are simply because of where it is located. The area east of the Mississippi represents 29 percent of the contiguous land of the U.S., 59 percent of the population, and 60 percent of all manufacturing establishments, and 65 percent of all manufacturing employment. A full 50 percent of all exports come from the eastern U.S. Charlotte business can reach 60 percent of the U.S. population within two hours by air or 24 hours or less by truck or rail.
Fifty-five of the country’s top 100 metropolitan areas are within 650 miles of Charlotte. It is already a major distribution center midway between the Northeast, Midwest and Florida markets. As a global hub, it has easy access to interstates, rail, intermodal and airport, and most importantly, ports.
Of Fortune 500 firms, 264 are represented in Charlotte. And Charlotte is at the epicenter of the Piedmont Atlantic region, the fourth largest concentration of manufacturing in the country and home to 918 foreign-owned businesses.
Beside its pleasant climate and good natural resources including a relatively low cost of energy, the greater Charlotte metropolitan area is home to 2.2 million people and is the second largest city in the Southeast, and its population in a 100-mile radius exceeds that of Birmingham, Jacksonville, Miami, Tampa, Memphis, Nashville or Norfolk.
As far as infrastructure, it’s hard to overestimate the importance of Charlotte Douglas International Airport (CLT) to the economic success and global competitiveness of the city and region. It ranks 6th nationwide in operations, 8th nationwide in passengers and 33rd nationwide in cargo.
The merger of US Airways with American Airlines makes Charlotte the second largest hub for American Airlines, now the world’s largest airline, and significantly expands Charlotte’s access to international flights.
The recent addition of a third parallel runway and the opening of the Charlotte Regional Intermodal Facility there are important parts of the plan to make Charlotte a global freight hub. Much of today’s cargo moves via a combination of modes such as ocean vessel to rail to truck, known in shipping as intermodal transport. Having multiple modes of transport in one common hub facilitates the transfer of freight, saving time and money.
The hub represents a $92 million investment by Norfolk Southern with $15.7 million of federal assistance and will allow the future ability to transfer containers between trucks and trains equal to the current two largest facilities located in Dallas-Fort Worth and Chicago. It is expected to add long-term benefits of 5,000 additional jobs and $7 billion to the area’s economy.
The new intermodal hub also has the added benefit of being strategically located between I-85 and I-77, providing easy access to the interstate system and better exploiting the city’s natural advantage of being a midpoint location for distribution of goods.
Norfolk Southern Railroad’s $2.5 billion expansion of rail and infrastructure enhancement to its Crescent Corridor allowing the high speed movement of freight between the Southeast and Northeast is also a vital improvement.
Easy interstate access also facilitates movement of import and export cargo from the intermodal hub to the southeast seaports of Savannah, Norfolk and Charleston, which, in order, are the second, third and fourth largest in container tonnage of all East Coast ports.
The convergence of these factors with the $5.25 billion expansion of the Panama Canal, expected to be completed by December 2015, could substantially impact Charlotte’s global competitiveness. Historically, the bulk of the Charlotte region’s trade with Asia has moved across the Pacific through the mega port of Los Angeles-Long Beach and by rail or truck to Charlotte. When the larger capacity post-Panamax container ships are able to transit the Panama Canal, it will provide large capacity container ships an all-water route between Asian and East Coast ports and an alternative to movement via the West Coast.
This could mean much higher cargo volumes for East Coast ports and the inland port of Charlotte could be a strategic logistical link for much of that cargo. Our growing profile as an international freight hub could mean greater international visibility and attractiveness to foreign and domestic companies looking for a location with an infrastructure that supports trade.
“In West Coast ports, trade flow is about 98 percent Asian and two percent European,” comments Gallis. “For Atlantic Coast ports, cargo from Asia and Europe are about equal, but East Coast ports also get a large trade flow out of Latin America. We get trade cargo from Africa, the Middle East and the Indian subcontinent too, so literally all six trading blocs of the world flow through the East Coast.
“We can have access to every one of those trading blocs if we have a global marketing strategy to tell the world that Charlotte is the most efficient place on the East Coast to ship goods.”
How Do We Become an Alpha City/Region?
How do we become an alpha city/region? And how can you participate?
Be aware. First and foremost, it is important to be aware of just how well-positioned Charlotte is to become a hub of global commerce—ultimately leading to increased job growth and prosperity. Being aware of its advantageous position will enhance your decision-making as you operate your business and enable you to better evaluate proposed initiatives in the public sector as well.
Stay informed. Know Charlotte’s strengths and potential and keep abreast of developments and global thinking. Visit www.cltglobal.com for a compilation of great resources; attend the “Discover Global Markets: The Americas” program being held by the U.S. Commercial Service here in Charlotte October 29th through the 31st.
Become a participant. Join in the global thinking and discussion about how Charlotte resources can be put to better and more synergistic use.
Take advantage. Take advantage of opportunities to move your own business forward globally—maybe investigate international trade opportunities, partner with companies already doing business in other parts of the world, investigate the logistics of transporting your products overseas, look for reps overseas to sell your products, revisit your website to evaluate how well it displays your products/services and whether it accepts foreign currencies, or simply learn another language.
As Chase Saunders says, “Think big. Think how far we’ve come and where we are headed.
“Practically all human knowledge is available to all people on the planet 24/7—think Google. The digital and Internet revolution has erased distance from the access to knowledge—think Apple, Google, Samsung. It is now in the process of erasing time from the access to supply—think 3D printing.
“Mass is being digitized. Products are being designed, prototyped, tested, modeled, and transmitted to production sites for one-off production.
“Think about Amazon and the end of inventory with the just-in-time delivery of things your want. The key to erasing distance from these things are the key locations where things can be made and distributed faster than other places. In the U.S., there are seven of those places and we are at the center of one of them; the world is being divided into other locations as new trade routes are being set up for the next 50 years.
“Charlotte is poised to be the leader in manufacturing and distribution for the entire East Coast with its incredible, new, and huge, inland, intermodal freight and passenger port. There is an old saying that reads, ‘May you live in interesting times.’ Charlotte is on the threshold of a dramatically interesting time.”
Nearly four years ago, Mike Guggenheimer knew that sales at RSC Chemicals, an Indian Trail manufacturer of hands-on household consumer lubricant and cleaning products including Liquid Wrench and GUNK, were optimal.
But what if the company pushed the envelope, capitalizing on the same basic technology RSC Chemicals had been using for 90 years, and formed a sustainable solutions platform aimed at big industry: deep sea oil rigs, waste management, underwater construction and dredging?
What if a new business could produce safe absorbent technology to clean oil spills? Or produce high-performing readily biodegradable industrial lubricants to keep high-risk businesses safer from the start?
“It made perfect sense to combine current technology developed by parent company Radiator Specialty Company and sister company RSC Chemical Solutions, look to acquire and invest in similar bio-based partners, and form RSC Bio Solutions,” says Guggenheimer, who is CEO of the newer company.
Extending Their Reach
“Radiator Specialty Company has a long-standing strength in formulating and manufacturing lubricants and cleaners, so the investments that led to RSC Bio Solutions are a natural extension of this core capability,” states Guggenheimer, 40. “And, Radiator Specialty Company has used bio-based ingredients for many years in its products.”
Thus began a journey of substantial growth for Radiator Specialty Company and a series of acquisitions and partnerships, including Ohio-based Terresolve Technologies’ ENVIROLOGIC line of industrial lubricants.
Guggenheimer and other company executives began working with Radiator Specialty Company owners Alan, Philip and Samuel Blumenthal to create RSC Bio Solutions. All three privately held companies are owned by the Blumenthals, a Charlotte family well known for their civic and philanthropic contributions including the N.C. Blumenthal Performing Arts Center, the Blumenthal Cancer Center at Carolinas Medical Center, and Shalom Park.
Radiator Specialty Company (RSC), RSC Bio Solutions’ founding company, was created by traveling salesman I.D. Blumenthal, great uncle to the current owners, in 1924 after a chance encounter on a Charlotte business trip led him to find a new way to plug a radiator leak. Solder Seal was the first of many products of RSC.
I.D.’s brother Herman joined the company in the ’30s, and when I.D. died, Herman took the helm eventually passing on the responsibility to his eldest son Alan in 1978, who served as president and CEO for 22 years. Currently, John Huber serves as president and CEO of RSC. Owners Alan, Philip and Sam, all brothers, are no longer involved in the day-to-day operations of the three RSC companies, but are “active and engaged owners,” describes Guggenheimer.
In 2010, RSC adopted the name RSC Chemical Solutions to better reflect its range of products, which include lubricants, oils, hydraulic fluids, fuel additives, degreasers, cleaners and sealers.
Guggenheimer describes RSC Bio Solutions as a separate but connected platform to RSC and RSC Chemical Solutions, a longtime name of trusted brands found in stores from Wal-Mart to Auto Zone. The difference? Bigger applications and entrance into a world of biochemistry where sustainability is key.
RSC Bio Solutions manufactures and distributes safer bio-based readily biodegradable cleaning, degreasing and lubricating products for risky business—oil spills, hazardous waste mishaps, etc.—and oversees partners that do both. “Think large cargo container ships or even the simplest of turf lawnmowers used in commercial applications…that’s RSC Bio Solutions’ target audience,” says Guggenheimer.
“The company’s founding story really embodies what we are all about, using chemical tools to solve a problem,” says Guggenheimer. “It ties into the ethos, the spirit of reliance, the ability to fix problems by your own hands. It really is who we are today.”
In 1941, the popular Liquid Wrench product became part of RSC’s line, while automotive chemical, plumbing and hardware products were added after World War II. Rubber production for the retail line was moved from California to Charlotte in 1949. GUNK Laboratories was acquired in 1959, resulting in the addition of an entire line of degreasers, and in 1964 a new office was opened in Charlotte.
In 2007, the company combined its entire work force at what is now 500,000-square-foot plant in Indian Trail where most manufacturing and distribution for all three companies takes place..
Investment in Emerging Tech
RSC Bio Solutions is in close control of procuring raw materials and research and development for its industrial lubricants—hydraulic fluids and gear oils, predominantly—but uses a mix of its own blending facilities and outside manufacturing partners throughout the world.”
Guggenheimer attributes RSC Bio Solutions’ rapid growth to identifying an “unmet” need in their search for other markets: “The key was finding industrial companies that were looking for safer technology without having to trade off cost or performance,” he asserts.
And pushing RSC’s eco-friendly lean was key from the start. “For RSC as a whole, we are committed to running an organization that is sustainable—from an environmental and social standpoint, but also from an economic standpoint,” says Guggenheimer. “We are working to ensure the next 90 years are just as successful as the first 90 years and we see the economic value that safer, readily-biodegradable technology can deliver to our customers.”
For several years, RSC had been researching and planning for its expansion into bio-based fluids while Guggenheimer took the lead in 2010 by negotiating deals with three partners.
Through a partnership with Gemtek, RSC Bio Solutions is now the exclusive North American licensee of SAFECARE technology for cleaners, degreasers and solvents in the industrial market. A partnership with Sorbent Green and exclusive distribution rights to GREENSORB, an absorbent for solvents, oils, hydraulic and functional fluids, followed.
Next came a partnership with Terresolve, involving an investment of growth capital and a minority ownership in the company (which has since become a majority ownership). In addition, the Terresolve ENVIROLOGIC brand of industrial lubricants is now available to RSC customers. “Now there is one company that offers a full array of high-performing, readily biodegradable alternatives to petroleum-based lubricating and cleaning products,” says Guggenheimer.
RSC Bio Solutions also capitalizes on the two retail bestsellers produced by RSC Chemicals. RSC Bio Solutions provides ready-to-use, safer, GUNK Powered by SAFECARE and Liquid Wrench Powered by ENVIROLOGIC products formulated for industrial applications.
Guggenheimer says this means that RSC and both divisions offer a one-stop shop for advanced, readily biodegradable lubricating, cleaning and degreasing chemicals in the industry “These powerful chemicals deliver an enhanced level of safety and business efficiency, reducing workplace hazards and costs across a wide spectrum of applications ranging from waste management and utility fleets to offshore marine and golf course maintenance,” he explains.
Before joining RSC, Guggenheimer was an operating partner for Blackstreet Capital Management, a private equity firm based in Maryland, and previously held a number of general management positions for chemical and textile manufacturer Milliken & Company, headquartered in Spartanburg, S.C.
Competition and Position
Customers of RSC Bio Solutions heavy-duty degreasers, bio-based surfactant blends and solvents, and lubricants go across the spectrum from construction and excavation companies to manufacturing firms with assembly lines.
“The case studies on our website speak volumes,” says Guggenheimer. “Once users decide to try our products, they are sold on RSC Bio Solutions. We also have a long history of approvals from equipment manufacturers,” says Guggenheimer.
There are many customers in the waste management industry. “Perhaps you have garbage trucks being used in a residential neighborhood, and a hydraulic fluid line breaks—you’ve got a real mess on your hands,” says Guggenheimer. “We have to prove that the technology is safer and it works without damage to your trucks. Our products are often better than petroleum-based lubricants; vegetable oils can offer superior lubricity.”
Currently, the company’s best sellers are ENVIROLOGIC products—mainly driven by EPA regulations in the marine industry and lubricants used in large ships and other vessels. “Our products are used by big equipment in sensitive places,” says Guggenheimer.
Airports and other aeronautical-related businesses tend to purchase the company’s cleaners, degreasers and solvents. “There are times when you don’t want chemical exposure to employees, and our safety benefits add real value,” explains Guggenheimer. “Oftentimes cleaners with water cannot be used in an airport hanger, for example. SAFECARE and GREENSORB draw oils out of the hanger, absorbing that oil and encapsulating it for safe disposal.”
Guggenheimer is especially proud of one Charlotte customer, Jacobsen, which designs and builds advanced turf maintenance equipment—big lawn mower fleets. “When a turf mower breaks down on the 18th green of the golf course and has a spill, and we can provide a safe solution that has real value to the client,” he states.
“We are very focused on and dedicated to environmental and alternative industries. We understand alternative technology. We are balancing breadth and scope with tailored customer service,” he says. “We cannot be everything to everybody, but we get to know our customers and their industries very well, as well as the application of our products to their needs.”
Guggenheimer adds that other companies make misleading claims about bio-based products—or simply offer products that don’t work—and that does more harm than good to RSC Bio Solutions. “It’s more difficult to overcome a less than satisfactory prior experience,” he says. “And truthfully, some competitors’ products don’t work.”
As a matter of fact, Guggenheimer says the Blumenthal family wanted to move RSC in a bio-based direction for many years but was wary of “greenwashing.” RSC needed to be sure that offering an environmentally friendly line of products meant more than just slapping a specialized logo on a plastic container. The bio-based products had to be as strong as their petroleum-based counterparts, according to Guggenheimer, to maintain the company’s reputation for quality.
Asked about competitive products, Guggenheimer responds, “We don’t focus too much on the competition because we think we can help build a new marketplace where a number of players can be successful. We worry more about bad competitors who mislead customers and make it harder to build the market than we do about good competitors. I hope we see more strong products from others. We actually have a big oil company as a customer now, and are helping them to address the need with their customers.”
RSC Bio Solutions looks to be positioned well as a thought leader in the ever-evolving world of eco-friendly functional fluids. Guggenheimer is on a mission to educate. He recently spoke at two bio-based chemical conferences, meeting with companies invested in being environmentally safer.
“My vision for RSC Bio Solutions is to be a global force for change in markets using big equipment in sensitive environments. Some of these market areas have been historically very reluctant to change, but I believe we can show them how our products actually reduce risk,” he asserts. “I expect our thought leadership and investments in this space to develop opportunities for RSC and address a looming sustainability challenge we all face.”
RSC Bio Solutions hopes to see significant growth on this platform. Guggenheimer says RSC also has plans for aggressive growth in their traditional consumer products such as GUNK and Liquid Wrench, as well as MotorMedic (maintenance chemicals for vehicles) and TiteSeal (leak repair products). He is quick to credit his colleagues and coworkers in bringing the company together in a “It takes a village” kind of way.
“Although RSC Bio Solutions is fairly small now relative to the full RSC enterprise, it stands as a greater percentage of total sales in the future,” he says. “At the same time, bio-based ingredients have played a role in the core business for many years and we expect the use of these materials to accelerate across the board.”
Don Rothwell’s flight had been airborne hardly 10 minutes before the toddler seated next to him lost interest in the plastic screwdriver his mother had brought along to serve as his in-flight entertainment. As the child’s restlessness grew, Rothwell quickly produced from his briefcase three zoo animal figurines and presented them to the boy and his mother as a gift.
It worked like a charm. The youngster remained fascinated and occupied right through the landing. The executive vice president of Schleich USA, Inc., Rothwell says, “I never travel anywhere without a few of our signature figurines in my bag. They come in quite handy.” The scenario perfectly exemplifies the company’s registered motto: “Anywhere’s a playground.”
Bringing Their Playground to Charlotte
Schleich was founded in Germany by Friedrich Schleich in 1935. The company started as a supplier to the plastics industry, but shortly thereafter Schleich invented the process for manufacturing those classic bendable-wire rubber toy characters (think Gumby and Pokey). As a result, the world-famous Schleich figurines first came on the market in the 1950s.
Today the toys’ intricate design and painstaking hand-painting process—over 100 steps—has made them a favorite of both children and collectors in more than 50 countries around the world. As a global player with Swabian roots, the company is headquartered in Schwäbisch Gmünd, Germany; managing directors include Dr. Thomas van Kaldenkerken and Erich Schefold.
In the 1980s, Schleich introduced their wildly popular animal figurines. Intended to be a realistic reflection of nature on a smaller scale, the quality and attention to detail is so striking that to label them toys seems somehow diminishing. Void of battery power or adjustable parts, these figurines rely on their uncanny realism to lure children into using their imaginations to create wonderful worlds of play with unlimited possibilities. The formula is clearly working as Schleich produces more than 50 million figurines a year.
“Safety and quality control are our top priorities,” explains Rothwell. “We do everything in-house at our German headquarters from the design to the creation of special manufacturing tools.” The actual production process takes place in Germany, Moldavia, Tunisia and China, but Rothwell says it’s certainly not off the table to have at least some of the manufacturing in the United States one day.
Charlotte became a big part of the Schleich story last year when the company relocated their North American headquarters from Ottawa in Ontario, Canada, to the Queen City. “The lion’s share of our business—about 85 percent—comes from the U.S., so it made sense to relocate here,” notes Rothwell.
“During our site selection process we looked at multiple cities including Chicago, Los Angeles and Memphis, but ultimately there were several key factors that led to Charlotte being chosen as our new North American home.” One of those key factors was North Carolina’s reputation for being what Rothwell characterized as a “very business-friendly state.”
As Schleich is a German company, it didn’t hurt that Charlotte is coincidentally home to more than 200 German-owned businesses which collectively make up the largest foreign investment group in the region. Also in the city’s favor was its close proximity to a large percentage of the Schleich customer base; the easy access to the I-77, I-85 and I-40 corridors; proximity to major ports like Wilmington and Charleston; and the regional intermodal freight transport facility at Charlotte Douglas International Airport.
Still, it was more than Charlotte’s business edge that attracted Schleich: “Just as important to us was the quality-of-life factor as well as the cost of housing, median incomes, schools, safety and the various amenities like football, basketball, baseball, NASCAR, the arts programs and museums found here,” explains Rothwell.
“We knew Charlotte gave us the business advantages we were looking for, but we also wanted a city that was a great place to put down roots and raise a family—one that could attract and provide high-caliber employees. And the people are just so amazingly friendly here. The entire package made it very attractive to be in Charlotte.”
Rothwell recounts a recent experience taking a group of New York colleagues to dine at the Mimosa Grill uptown and how “shocked” his guests were at what they considered the epic-friendliness of the wait staff—a level of service unheard of “back home.” Rothwell would know. Having transplanted here from New York 16 years ago, he now considers himself a proper Charlottean.
With over 60 employees now entrenched in the new 125,000-square-foot headquarters on Twin Lakes Parkway in north Charlotte, Schleich is understandably eager about its next big venture. Having recently licensed the rights to the world-famous Peanuts characters, the company is gearing up to launch a new line of figurines featuring Snoopy, Charlie Brown, Linus, Lucy and the entire Peanuts gang. It won’t hurt that a new CGI computer-animated Peanuts 3D movie is due out in late 2015 to coincide with the 65th anniversary of the comic strip.
“What’s most exciting about Peanuts is they have 99 percent consumer brand awareness,” marvels Rothwell. “It’s an iconic brand and fits in perfectly with our initiative to augment our already well-established Schleich products with other evergreen properties—ones that are not only here today, but are going to be here for years and years to come.”
While further expansion into the licensing space is a high priority for Schleich, they won’t be travelling in unchartered waters. They’ve actually held the licensing rights for the recently revived Smurfs for more than 50 years—a fait accompli Rothwell says is unheard of in the licensing industry.
Still ahead, Schleich has also entered into a global partnership with Warner Bros. Consumer Products and the DC Comics pantheon of Super Heroes. Those products are slated to launch in January 2015 and will include the iconic characters Batman, Superman, Green Lantern, Flash and others.
“People don’t realize how deep the DC Comics line really is,” notes Rothwell. “There are hundreds of characters there. The Batman storyline alone includes Robin, Catwoman, The Joker, The Riddler, The Penguin and so many more.”
The admiration appears to be mutual as Karen McTier, executive vice president of domestic licensing and worldwide marketing for Warner Bros. Consumer Products stated, “We are thrilled to partner with Schleich and excited to incorporate them into the DC Comics universe to bring their artistic detail and creativity to the devoted fans of the DC Comics Super Heroes.”
Schleich takes the development and manufacturing of their toys very seriously and assumes a genuine responsibility towards parents and children. They rely on the assistance of both, as well as educators, in the design and approach to their creations. Always aiming for products that are as realistic and naturalistic as possible, these figurines may be as close as many children get to actually seeing domestic farm animals, wild jungle animals and oceanic creatures.
When choosing licensing products, special attention is paid to the character and message they carry. Outranking even the allure of sales potential is the educational element which is viewed as the most vital part of the process. To that end Schleich recently added accessories like castles, barns, stables and various “scenery packs” in which their characters and figurines live and play. “That was one of the challenges our customers came to us with,” explains Rothwell. “We were hearing, ‘We love it, now give us the playworld.’”
Smiles Around the World
Demonstrating a genuine commitment to be an active supporter of the community and not just a resident, Schleich recently formed a partnership with Levine Children’s Hospital and gave an initial donation of 500 toys to the facility—something Rothwell describes as particularly “meaningful and rewarding for our staff.” Multiple events with additional donations are planned with the hospital including providing a supply of the new Peanuts characters when they become available later this year.
“Anyone who’s ever visited the Levine Children’s Hospital knows those kids need hope,” comments Rothwell. “They need spirits lifted and all the fun they can get. We are so happy to bring some smiles to those brave kids and help in the healing process.”
Last December Schleich also partnered with the USO which had an astounding 25,000 service people come through Charlotte. As a veteran of the U.S. Marine Corps. and USO runner-up for Serviceman of the Year in Japan, the cause is near and dear to Rothwell’s heart.
“Our idea was to create thank-you packages for the USO service men and women, so we reached out to a handful of other companies including NASCAR, Verbatim and Diverse Marketing to donate items to go along with our Schleich toys,” explains Rothwell, who then asked for staff volunteers who would be willing to assemble what became more than 1,500 packages.
“The response from our folks was overwhelming and I was so proud to see so much being done to support our service men and women. The project was so successful that we’re planning on doing it again in mid-2014.”
The company is also interested in opportunities to utilize their toys for formal education purposes and is looking into partnering with area schools and mentoring programs. “We get a lot of requests from teachers—in particular for our animal figurines,” says Rothwell. “They may not have the resources to take their students to an actual zoo, or are teaching about animals from a specific region and like to use our products for teaching purposes.”
While donations to schools have been made, Schleich doesn’t currently have a formalized process to meet all of those requests, so Rothwell is exploring ways to introduce the products into pre-K and elementary schools.
As the date for their first anniversary in Charlotte approaches, Rothwell says the company couldn’t be happier with their decision. “Quality is at the core of everything we design and produce. It’s a theme central to everything Schleich stands for. It’s only fitting that our North American headquarters has relocated to such a quality city,” says Rothwell with a smile.
And why shouldn’t he be? The man gets to make toys for a living! He adds, “At the end of the day, toys bring smiles. Whether you’re a child playing in his room, a serviceman going overseas, or a child in a hospital, people love toys. We’re just lucky enough to be in a business that’s so much fun.”
Plastics are an important component in thousands of the products that we use everyday. From the alarm clock that wakes us in the morning, our coffee maker and toothbrush, and the container from which we pour the milk for our cereal, to the car we drive and the pump that puts gas in it, the computer and smartphone we use at work, and even the protective wrap around the food we’ll eat for dinner, plastics improve our lives and bring us convenience and efficiency.
Because the flexibility and adaptability of plastics enables them to provide many different solutions in an increasingly complex world, the plastics industry is today the third largest manufacturing industry in the United States. It employs nearly 900,000 workers and contributes more than $380 billion in annual shipments, making a significant impact on the country’s economy.
One of the nation’s largest plastics companies is located in the Charlotte area. Wilbert Plastic Services is headquartered in Belmont with seven manufacturing facilities in five states—North Carolina, South Carolina, Kentucky, Ohio, and Minnesota. It employs over 1,400 workers and manufactures and assembles products in 12 different markets. These markets include automotive, consumer products, commercial equipment, appliances, heavy trucks, health care, aerospace, agriculture and recreation.
“Wilbert Plastic Services is a leading supplier of plastic injection molded and heavy gauge thermoform products and assemblies in North America,” attests Greg M. Botner, president and CEO. “Our ability to produce small to large plastic parts and assemblies to a variety of industries in multiple and strategic locations throughout the country is unique.”
The history of Wilbert Plastic Services goes way back to the middle of the 19th century when a German immigrant, Ferdinand Haase, acquired 55 acres along the Des Plaines River outside Chicago.
In 1874, Ferdinand and his two oldest sons, Emil and Leo, opened Forest Land Cemetery, which included a museum displaying Native American artifacts found on the Haase property. In 1880, Ferdinand’s son Leo founded the L.G. Haase Manufacturing Company and began making concrete burial vaults and covers, as well as cemetery lot markers, benches, tiles and irrigation basins.
In 1902, Leo retired and moved to the West Coast, leaving the Haase company to be run by his nephew Wilbert. When an influenza outbreak spread through the Midwest in 1918 and 1919 causing the death of thousands, the L.G. Haase Company was one of the few companies able to meet the demand for funeral products. In 1919, Wilbert bought L.G. Haase from the family for $19,000 and renamed it American Vault Works.
Wilbert Haase was a worldwide traveler and was fascinated by the preservation techniques of the ancient Egyptians. He was determined to make an airtight, waterproof burial vault and, after two years of trial and error, he succeeded by lining a concrete vault with asphalt. In 1930, he formed the Wilbert H. Haase Company to license the waterproof burial vault technology.
By 1938, the American Vault Works was the world’s largest manufacturer of asphalt-lined concrete burial vaults. In 1955, the company marked its 25th anniversary by producing its one millionth Wilbert burial vault.
In 1948, a group of multiple shareholders bought the W.H. Haase company and introduced a new vault liner to escape the dangerous and superheated use of asphalt. “Plasco,” a hybrid of the words plastic and coating, became the liner of choice for the company’s vaults until the 1960s when the company, now renamed Wilbert, Inc., bought Thermoform Plastics, Inc. and produced a new polystyrene vault liner, which was not only strong, but when bonded with an epoxy formed an airtight seal.
By 1977, Wilbert, Inc. was operating with two distinct divisions, Thermoform Plastics, Inc. and Wilbert Funeral Services.
Over the following decades the company thrived through natural expansion and growth. By the mid-1990s, Thermoform was booming, providing plastic liners for Wilbert’s vaults as well as handling lucrative contracts for a wide range of products in the plastics industry. Through a series of acquisitions, it grew to one of the top five plastics manufacturing companies in the country with sales topping $55 million in 1999.
In 2002, the company acquired Morton Custom Plastics in Harrisburg, N.C. and renamed the Thermoform division to Wilbert Plastic Services.
In 2008, Wilbert Funeral Services was spun off as a separate company, leaving only Wilbert Plastic Services under the operating under the corporation of Wilbert, Inc. Today, the companies operate as independent entities with no corporate relationship.
“Not many companies in the plastics industry have the deep roots and longevity of Wilbert Plastic Services,” says Botner, who began working with the company in 2004 during a period of financial change. As president and CEO—a tenure that began in 2008—he guided the company through another reorganization and set in motion a number of operational adjustments.
Botner was an ideal choice to take the plastics company into the new millennium. Growing up in Michigan, he was no stranger to the manufacturing industry. After attending Wayne State and Oakland Universities, he landed a job with an autoparts company. He soon began a 30-year career in the plastics industry with manufacturing companies serving various markets throughout North America, Europe and Asia.
Immediately prior to joining Wilbert Plastic Services, Botner served as president and CEO of Titan Plastics Group, a private equity-sponsored plastics processing company headquartered in Portage, Michigan.
When Botner joined Wilbert Plastic Services, it was still calling Chicago “home.” In 2010, Wilbert executives decided the company’s headquarters should be in the Southeast and moved to Belmont, N.C. The Gaston County location offered all the right elements—sufficient space for a headquarters building, a professional labor force, a good business community and quick access to the airport.
“Our major share of business was in the South and Southeast,” explains Botner. “And we already had a manufacturing facility in Belmont, so it just made sense to locate here.”
Today, Wilbert Plastic Services supplies 12 major industrial markets with seven manufacturing facilities, totally over 1,300,000 square feet. Its annual sales volume is approximately $260,000,000. It makes everything from washing machine agitators for Whirlpool, fenders for BMW, and hoods for John Deere, to the cowling for GE Medical Systems’ MRI machine.
With automotive products making up 39 percent of its production, along with another 6 percent in the heavy truck market, Wilbert’s customers include BMW, Hyundai, Ford, Volvo, GM, KIA and Daimler trucks. It makes covers for Mercury boat engines, child car seats for Britax, and service station pumps for Gilbarco Inc., a Greenville, S.C., company.
“We’re an American company with American-made products. We don’t have operations outside of the U.S.,” says Botner. “We believe the manufacturing capabilities here are the best in the world and we’re investing heavily in that.”
Wilbert Plastic Services has also positioned itself to create products for the aerospace industry by acquiring the mandatory AS9100C certification in the fall of 2013. This certification establishes an international quality management standard for the aerospace industry. The certification demonstrates a manufacturer’s ability to meet various regulatory requirements, including legal and safety standards.
“The AS9100C expands our manufacturing capabilities within the plastics industry,” explains Botner. “It also offers aerospace customers a new option, one with more than 50 years of plastics experience, to choose when considering plastic products. We’re ready to explore these avenues and move into this industry.”
Botner observes that the plastics industry has evolved dramatically over the last several decades, moving from a substitute for other materials in a product to a material that many designs revolve around. Consequently Wilbert has added more engineers to its staff, currently employing around 50, and expanding the services it provides to customers.
“As the demand for our plastic products increases, so does the demand for design and engineering support,” says Botner. “We can manage our customer’s product from concept through production, if desired. We have the capability to take the design intent and provide all of the product.”
While many of its competitors went out of business during the economic recession of 2008-09, Wilbert Plastic Services has survived and is now growing again. Botner suggests that the reason Wilbert survived was that it was already in trouble before the recession impacted the national economy. In 2005-06, the company had lost 20 to 25 percent of its sales volume. Botner was charged with turning things around.
Botner worked on reducing the company’s debt, by closing several manufacturing plants and making reductions in the number of employees. In 2009, the company had cut down to 830 employees and sales had dropped to about $150 million. When the recession hit, Wilbert was ahead of the curve. It was already retrenching and consolidating.
“We were already in the mode when the recession hit,” explains Botner. “Consequently, we were well positioned to weather the downturn. Now we have turned ourselves around and are benefiting from a recovering marketplace.”
Botner believes that Wilbert has been successful over the past four years by investing in its own business growth through careful acquisitions, putting capital into new facilities and new technology, and increasing the levels of productivity. The company has grown to 1,450 employees and Botner expects sales to reach $320 million in 2015.
“I hope we’ve learned our lesson,” cautions Botner, speaking for both his company and the industry. “The answer to success in manufacturing goods is not the pursuit of cheap labor, but rather an investment in the workforce.”
He points out that the Southeast region of the county has always been a center for manufacturing and even though the products may have changed from the traditional textiles and furniture, he believes that the region will continue to dominate the industry for the foreseeable future.
“This is a multi-state community that believes in business,” he asserts. “However, we must continue to attack the cost of doing business here by keeping corporate taxes and utilities low and making sure that the place where we do business is a place where people want to live.”
Another problem that Botner believes the region must attack is a growing skills gap between the labor force and the job demands of the manufacturing industry. Botner says high schools no longer focus on vocational training; instead they put the emphasis on preparing for college. As a result students are coming out of high school without the advanced math and basic programming skills they need to succeed in plastics manufacturing. Many also have a false idea of what the industry is all about.
“Over time manufacturing has gotten a bad reputation,” says Botner “People see it as a shrinking field and one where you have to get your hands dirty working in a factory. They don’t realize that this is a different era of manufacturing. It’s clean work with more use of the head than the hands.”
To help fill the skills gap, Wilbert Plastic Services is initiating its own training programs. In 2013 it launched the B.E.T.T.E.R Workforce Program to provide employees opportunities for training, recognition and a career path within the company. The launch included new training centers and training computers at all of Wilbert’s manufacturing sites.
At the injection molding facilities it installed the Paulson Training System, an interactive computer program which provides employees with a wide range of plastics knowledge from basic safety to advanced problem solving simulation. Injection Molding employees who participate in the Paulson Training lessons not only gain knowledge, they also earn extra pay for the courses completed and receive certificates representing specific job titles.
Wilbert Plastic Services is now working closely with the Paulson Training staff to develop a set of thermoforming courses. It hopes to install this type of training in all its thermoforming sites during 2014.
“We have great employees,” stresses Botner. “The decisions we make affect them everyday. I take that very seriously. When we turned the business around in 2008-09, we were laying off people. That was an awful feeling.”
In addition to the new training programs, Wilbert offers medical insurance and health plans that affect 4,000 people. It provides an opportunity for employees to progress in their careers with the company. And, it encourages all its employees to gain the knowledge necessary to perform their job effectively.
Botner believes these steps will help build a stronger company and a more knowledgeable workforce. “I believe we can recreate the growing middle class,” he says.
The winter of 2014 was one for the record books in Charlotte and the Carolinas. Thanks to the polar vortex, January 2014 was the coldest January in 37 years and the seventh coldest since record keeping began in 1878.
While the exceptionally frigid weather and icy conditions may have hindered our day-to-day activities, it didn’t daunt Piedmont Natural Gas, the energy services company that serves over a million customers in portions of North Carolina, South Carolina, and Tennessee. As a matter of fact, on January 7, the company set a single-day record for natural gas volume at 30 percent greater than its previous daily record set in 2010.
While keeping us all warm may be the most visible role Piedmont Natural Gas plays in the Carolinas, the products and services they provide are also becoming increasingly important to our region’s competitiveness in the global economy.
Natural gas is proving to be one of North America’s most abundant and affordable energy sources, one that has great potential to boost economic growth, help our balance of trade, and reduce the geopolitical risk that is often associated with energy-related products.
Over the last decade, America has seen natural gas emerge as a leading source of domestic energy. Technological advances such as 3D seismic technology have allowed geologic formations to be examined with greater accuracy, reducing the frequency of dry wells. Advances in horizontal directional drilling and hydraulic fracturing, (commonly called fracking) have allowed new supplies of natural gas to be extracted from shale formations deep underground.
Ten years ago, shale accounted for less than 5 percent of America’s 50 billion cubic feet per day (bcfd) of natural gas production. But now, shale represents a full 40 percent of today’s 65 bcfd domestic gas production. As a result of these new resources, the cost of natural gas has declined significantly in the U.S., giving America a competitive advantage over economies in Europe and Asia.
“This game-changing era of natural gas abundance has transpired at a time when our country and our economy really needed some infusion,” says Thomas E. Skains, chairman, president, and CEO of Piedmont Natural Gas. “This abundance of supply has lowered the price of natural gas from, conservatively speaking, $7.50 per million BTUs prior to the recession, to about $4.50 per million BTUs today. That’s a $3 savings on the 25 trillion cubic feet of natural gas that are consumed annually in the United States, representing $75 billion in energy savings per year.”
Skains goes on to say that it still costs over $10 to buy a million BTUs of natural gas in Europe and over $15 in Asia. As a result, many global companies—particularly chemical companies—now have an economic incentive to move manufacturing back to the United States to take advantage of America’s cheap natural gas.
In years past, energy experts believed the U.S. would need to import foreign natural gas to meet our needs. Now, as a result of shale production, efforts are underway to liquefy U.S. natural gas and sell it abroad as liquefied natural gas (LNG). While the certification and approval process for LNG facilities is long, LNG export has the potential to boost domestic job creation, help the balance of trade, and positively impact global energy security by reducing Europe’s dependence on Russia for its natural gas supplies.
While there is no shale production currently taking place in the Carolinas, preliminary studies indicate that the Sandhills region between Southern Pines, Fayetteville and Raleigh may have the right geology for shale production. Work is currently underway by the N.C. Energy and Mining Commission to evaluate an appropriate regulatory framework for possible shale development in North Carolina.
While fracking is controversial because of potential environmental risks—including ground water contamination, air pollution and chemical spills—the natural gas industry believes that hydraulic fracturing is safe when performed in a responsible way and with proper oversight. Skains agrees, and says the economic benefits to our region are significant.
“If we can convert N.C. from an energy-importing state to an energy-producing state, over the long term, we can create lower wholesale energy costs, which would be an added incentive for firms to locate here,” he explains. “The cost of energy at a retail level in N.C. is on average competitive with other regions of the country, but I think we would be even more competitive if we had wholesale supply and production here.”
A Foundation for Transition
In addition to being abundant and cheap, natural gas combustion is highly efficient and emits less carbon dioxide and pollutants compared to other fossil fuels. Burning natural gas emits about half of the carbon dioxide of coal combustion, and natural gas is 30 percent cleaner than oil and 15 percent cleaner than propane. Natural gas is also a very efficient fuel to transport from the source of production to the end consumer, delivering about 90 percent of the energy produced at the source to the customer. By comparison, electricity delivered over wires captures only about 35 percent to 40 percent of the raw energy produced.
One way that natural gas is helping reduce carbon emissions is by helping electric utilities transition their power production away from coal. Historically, coal has represented about 50 percent of the electric power generation in the U.S., with both natural gas and nuclear trailing at about 20 percent each. But with the dramatic drop in natural gas prices over the last decade and the increasing regulatory requirements to clean up old coal plants, natural gas has made huge inroads into coal’s dominance. Today, natural gas serves about 30 percent of the power generation market and coal has declined to about 40 percent.
“If you look at what natural gas has done for our country’s carbon emissions, CO2 emissions peaked in about 2007,” remarks Skains. “By 2012, CO2 had declined back to 1995 levels, with coal to natural gas conversions by power plants being a major contributor to that decline.”
The natural gas industry has also benefitted from increasingly efficient residential energy use, as a result of more energy-efficient homebuilding standards as well as more energy-efficient appliances. In 1970, the U.S. natural gas industry served about 38 million residential customers. By 2010, that number had grown by 70 percent to 65 million customers, but the annual amount of natural gas consumed by those 65 million customers—about 5 trillion cubic feet—was the same amount that 38 million customers consumed in 1970. That’s a 40 percent efficiency improvement over 40 years.
Piedmont Natural Gas is converting one out of every three of their 900-vehicle fleet to natural gas and is adding compressed natural gas fueling stations that will be used by the fleet and also made available to the public. Skains says the company foresees a potential role as an infrastructure enabler for the vehicular natural gas market—building, owning and operating fueling stations where and when it makes economic sense to do so.
Skains is quick to add that, while they think the ultimate market potential is huge, they believe the vehicular market will develop slowly because of the infrastructure required and the need for vehicles to come off the assembly line ready to burn natural gas rather than relying on more expensive conversion kits.
Natural gas is often described as a bridge fuel—a cleaner fossil fuel alternative that will help bridge the gap until truly renewable sources such as wind and solar are more widespread and economically viable. But Piedmont’s Skains says that he sees natural gas playing a much larger role in our energy future—heating our homes, generating electricity and running our vehicles—in partnership with renewables for decades to come.
“We think natural gas is actually a foundation fuel, or if it is a bridge, it’s a bridge too long to see the other side,” he suggests. “Natural gas is a long-term foundation for that transition to a lower carbon energy economy. The sun doesn’t always shine and the wind doesn’t always blow, so natural gas generation of power can be the primary backup to fill those valleys. We are very complementary to the renewable effort, but we are an important low carbon primary energy source as well.”
A Real Value Proposition
In its three-state market area, Piedmont Natural Gas owns and operates over 22,000 miles of distribution pipelines and about 3,000 miles of transmission pipelines—the larger diameter, high pressure lines used to transport the gas between main distribution points. The company operates in about two-thirds of North Carolina’s 100 counties; the Anderson, Greenville/Spartanburg, and Gaffney markets in the upstate of South Carolina; and the Nashville, Tennessee, metro area. The company also has a number of joint venture investments in interstate pipeline projects, storage facilities, and other strategic energy-related activities.
Of the company’s one million customers, about 900,000 are residential customers, about 100,000 are commercial customers, and 2,500 are industrial/manufacturing firms. In terms of revenue margin, residential demand contributes about 55 percent, commercial 25 percent, and industrial and power generation markets each contribute about 8 percent to 9 percent.
This new era of abundant, low cost natural gas is also having a profound positive impact on the growth of Piedmont Natural Gas’s business. Despite the recession, the company has enjoyed 4 percent compound earnings per share growth over the last five years, and EPS growth accelerated further to 7 percent in fiscal 2013. They are forecasting annual customer growth of 1.5 percent, or about 15,000 customers, primarily driven by new residential construction.
The fastest growing market in terms of revenue contribution has been power generation. Duke Energy has been actively decommissioning older coal plants and replacing them with new combined cycle natural gas plants generally located on the same site as the old coal plant. Since 2010, Piedmont has invested over half a billion dollars to build infrastructure to support Duke’s new plants. As a result, serving Duke Energy’s needs now comprises almost half of the annual natural gas throughput in the Piedmont Natural Gas system.
In addition to investing to support new residential, commercial, industrial, and power generation markets, Piedmont Natural Gas is also investing to maintain, rehabilitate and modernize their existing pipeline and support infrastructure. They have already replaced or retrofitted over 40 percent of their 3,000 miles of transmission pipelines and have an annual program in place to continue that process for years to come.
As a retail energy service provider, Piedmont Natural Gas has a vested interest in promoting the success of the communities that it serves, believing in the notion that if you help grow the communities in which you operate, you will also grow your company.
“We are joined at the hip with the success of all the communities that we serve, and we actively support those communities’ economic growth and development activities,” affirms Skains. “We want our pipeline facilities to help attract manufacturing investment decisions. We ask what kind of enhancement or expansion would we need to do to serve that new plant, and can we do it economically?”
In the residential market, the company says 90 percent of the new homes being built on or near their gas mains are built as gas-served homes. But Skains says that despite their status as a regulated monopoly energy service provider, there isn’t a single potential customer that has to use their product.
“We have to compete our way into every home, business or manufacturer,” admits Skains. “Natural gas is a discretionary product and the customer has a choice. But when you look at the attributes of our product and our services, we think the choice to go natural gas is compelling.”
“Natural gas is abundant, it’s domestic, it’s clean, it’s efficient, and it is affordable,” he concludes. “Our track record as a service provider is also delivering safe and reliable service. So when you put all of that together, we feel that we offer a real value proposition for our customers.”
It’s not surprising that the roots of paper giant Domtar Corporation link back to trees—lumber, actually, and a special process developed in 1848 in England to protect lumber from decay. The process proved useful to many industries at the time, but especially to railroads that needed to protect miles of wooden railroad ties.
The company grew on both sides of the Atlantic and in the wake of the outbreak of World War I in 1914, the company, then known as Dominion Tar & Chemical Co., Ltd., decided to move their head office to Montreal, Quebec.
By the mid-1900s, the company had become one of Canada’s largest, engaging in a wide range of industries including consumer products, chemicals, newsprint, containerboard, packaging, construction materials and kraft and fine papers. To reflect its new business diversity, the company officially became Domtar in 1965.
As years progressed Domtar divested its other interests to focus on paper. Acquisitions of Ris Paper Co., Inc. and four Georgia-Pacific paper mills, as well as a merger with the fine paper business of Weyerhauser, led to Domtar Corporation’s rise as a leader in the paper industry.
Today, as a U.S. domiciled company with sales in 2013 of $5.39 billion, Domtar trades on the New York and Toronto stock exchanges under ticker symbol UFS and is the largest integrated manufacturer and marketer in North America, and third largest worldwide of uncoated free sheet paper—the type used in office and business printing for copiers and computer printers, business papers such as envelopes and bills, and writing stationery—with recognized registered brands such as Cougar, Lynx, Husky, First Choice and EarthChoice.
With a selling capacity of 1.6 million metric tons annually, Domtar is also a leading global producer of papergrade, fluff and specialty pulp and a growing contender in the personal care products industry.
The company employs roughly 10,000 in its global network including a head office in Montreal, Operations Center in Fort Mill, S.C., and 13 paper and pulp mills throughout the U.S. and Canada.
But while paper manufacturing has been an established and stable business for centuries, and paper has been a staple in homes and offices for decades, times are changing. Emails have replaced letters and memos, files are now maintained in the digital cloud, and magazine and newspaper content is instantly available with a tap of your mobile device.
So how does a paper manufacturing giant handle the increasingly “paperlessness” of the new digital age? Answering that question is paramount to Domtar’s President and Chief Executive Officer John D. Williams.
“In the last six to seven years, we’ve lost about 33 percent of our commodity paper business,” Williams explains. “We’ve maintained our market share, but that part of the business is gone and the volume will continue to gradually decline causing a gradual loss of earnings in that sector. Our job is to find other revenue streams and to position the company so that it creates sustainable value for our customers and shareholders.”
It’s a large job but Williams has decades of industry expertise to his credit.
Prior to joining Domtar in 2009, Williams was president of SCA Packaging Europe and has 30 years experience in both consumer products and the packaging industries. He’s also received industry recognition. In 2010, he was named North American CEO of the Year by RISI (a leading information provider for the global forest products industry) and in the same year, Pulp and Paper International recognized him as Global CEO of the Year. PaperAge magazine named Williams as “Executive Papermaker of the Year” for 2012.
Williams, who works out of the company’s 400-person Fort Mill Operations Center, says that part of the strategy to replace lost business is building out into other businesses.
Personal care products such as baby diapers, feminine hygiene and adult incontinence products which use fluff pulp—a material the company already produces—seem a logical expansion.
In a little over two years Domtar has purchased five companies in the personal care products industry: Attends in both Europe and the U.S.; EAM, which makes absorbent cores used in a range of personal care products, and AHP, the largest manufacturer of private label baby diapers in the U.S. Domtar’s latest acquisition, Indas, is the market leader in the incontinence category in Spain.
“In personal care, we like the Americas and Europe,” says Williams. “The demographics for growth in those markets are pretty dramatic so when it comes time for acquisitions and putting assets together, you’ll see us focused in those geographies.”
Williams states the acquisitions will continue. “In order to be a serious player you need to put in place a global product platform and develop those products so you can launch them in the key geographies.
“We need critical mass. It’s not enough to be a group of little businesses. You have to leverage what you own to get synergies from them. We want to build $300 to $500 million of EBITDA from growth businesses by 2017. That’s our target. We’re making these acquisitions specifically to build out to that $300 to $500 million of EBITDA.”
Growth of the company’s personal care business is all good news for North Carolina. Williams estimates Domtar has invested over a half billion dollars in the Carolinas since 2010, and that their Attends facility in Greenville, N.C., is expanding to accommodate growth in that business. Domtar has also located its global headquarters for its personal care business in the Raleigh/Durham area, which could result in further benefits for the local economy as the company increases their market share in that industry.
But Domtar hasn’t limited their acquisitions to just personal care businesses. In 2013, the company purchased the U.S. and Canadian paper and print media products business of Xerox.
Adding on to their paper business in a declining market seems counterintuitive but Williams explains it as an opportunity. “Xerox has an amazing brand loyalty. It’s remarkable,” he says. “We think there’s an ability to focus on the brand and manage and build it. In a declining market, we believe there’s value in branding.
“In our paper business, we’re always looking for new applications. We make the paper for point of sale machines and cash registers that people use every day. In our technical and specialty paper, we’re always looking to develop new grades.”
New applications also apply to the company’s cadre of capital-intensive paper mills. Domtar is looking to refit or repurpose some existing mills to better align with its new business model. Their mill in Plymouth, N.C., is a good example of a successful transition.
Repurposing and Sustainability
“The large mill we have in Plymouth used to make paper,” Williams explains. “It no longer makes paper. It now makes the soft pulp—the type of pulp that goes into baby diapers and adult incontinence and feminine hygiene products. We knew we had the skill and we already had product in the market so we spent $85 million to repurpose that mill. That’s a way we’ve forward integrated an existing facility into this new business we’re building.”
Domtar is also finding new applications for an old product they’ve used internally for years.
“Wood is two things—cellulose and lignin,” Williams explains. “Historically, in papermaking you want the cellulose but not the lignin, so we’ve been burning lignin in recovery boilers and generating power for the paper mills. But lignin has other applications. It can be processed to be a binding agent in a whole range of applications from asphalt to wood pellets used in power stations, or because it’s natural, even as a binder in animal feed.
“We trademarked it BioChoice lignin—that’s our brand name. We haven’t been producing it for very long, probably seven or eight months. Right now, it’s not transformational for the company earnings, but it’s enabling us to develop new markets and we’re excited about that. The product has recently earned recognition from the U.S. Department of Agriculture as a 100 percent organic, BioPreferred product.
“Clearly, finding new applications for renewable resources—what we refer to as bio-refining—is an attractive proposition in a world of limited natural resources.”
Protecting natural resources has been a core company value for many years. An early adopter of sustainability principles, Domtar believes so strongly in the practice that it brands itself “The Sustainable Paper Company.”
The company was also first in the industry to embrace certification by the Forest Stewardship Council (FSC), a third party certification for managing and harvesting forests sustainably, and it also partners with the Rainforest Alliance and the World Wildlife Fund, even co-branding with them on FSC certified paper sold under the company’s EarthChoice brand.
“We sell a lot of FSC-certified product both in printing papers and cut size papers, the kind you find in a Staples or Office Depot,” says Williams. “All of us as consumers these days want to know how our beef is processed and where our eggs come from. Quite rightly, we care about these things.
“It’s meaningful to a lot of people that the paper they use at home or in their office is sustainably harvested. Many companies, especially large institutions, want to make sure that they’re buying paper that was sustainably produced. It matters to consumers and to business buying.
“But it’s not just a marketing issue; it’s also a behavioral issue. We have to make sure we behave in a sustainable manner.”
To assist in that goal, Domtar develops long-term sustainability strategies and conducts regular evaluations of its sustainability performance. Goals from a recent evaluation include: working toward procuring 100 percent of their wood fiber from FSC-certified forests, setting greenhouse gas reduction targets, reducing water and waste in their mills and seeking carbon efficiency opportunities in their supply chain.
“But sustainability isn’t just about the environment,” Williams insists. “It’s also about how you recruit people and how you manage your strategy to make sure that an enterprise which has already had a good long life continues to have a good long life.
“We have three core values: agility, caring and innovation. Part of our caring value is involvement in the community.”
Companywide, Domtar partners with First Book, a nonprofit that provides new books to children in need across North America, some 100,000 last year alone. The company’s EarthChoice Ambassador program also encourages employees to get involved in their communities.
Locally, employees from their Fort Mill Operations Center joined with the Student Conservation Association on a restoration project at Andrew Jackson State Park. And the company’s annual charity golf event raises money for local causes. Last year’s outing raised $150,000 for A Child’s Place, which helps homeless children in Mecklenburg County. Previous events benefitted Classroom Central, a nonprofit, providing students with school supplies. Employees also donated time to build hiking trails in the nearby Ann Spring Close Greenway.
Williams, who sits on the Palisades Episcopal School Board and is president of the Montreal Chamber Orchestra, believes that in addition to giving money to local organizations, it’s also “very important to really get involved.”
The Domtar strategy appears to be working. In an earnings conference call in early February, the company reported that its net earnings had more than doubled during the fourth quarter of 2013 and quarterly sales were nearly $1.4 billion—up 2.4 percent—as compared to the same period in 2012.
Of the period, Williams commented, “The strong fourth quarter capped off a year of achievements for Domtar. We announced several strategic initiatives and continued to execute on our commitment to transition our earnings profile.
“I can say with confidence that the Domtar growth story is set firmly in its path, the foundation of which will be a high-performing pulp and paper business and fast-growing personal care business.
“In summary, we had a milestone quarter for Domtar in our quest to become a stronger business that creates sustainable value for our customers and our shareholders.”
Self-help gurus assure us that we don’t need a title to be a leader or a million dollars to retire well. But some needs seem to have a natural partner. A city, for example, should have an ocean or at least a major river to call itself a port. Norfolk, Va.; Wilmington, N.C.; Charleston, S.C.; and Savannah, Ga., qualify. They have easy access to the Atlantic Ocean. St. Louis and Memphis are inland ports on the Mississippi River.
How about Charlotte? In 1984, Charlotte was named an “inland port” for North Carolina. Are we transporting goods to market by raft on the Catawba?
Charlotte along with Greer, SC., Front Royal, Va., and Cordele, Ga., are prime examples of what the United Nations calls a dry port. Dry ports are often hundreds of miles from the ocean or a navigable river. They provide a synergistic hub for trains, trucks, storage yards and cranes that save time, reduce expenses, decrease congestion around the real port and close gaps in America’s transportation system.
Charlotte Inland Terminal (CIT) General Manager Robert Dawson explains. Consider imports. When goods travel from port to port and not from port to the customer’s door, Dawson’s staff can arrange for trucks to finish the trip. It is a service CIT provides once a week for a freight-forwarding client.
CIT also enables customers to move their product to ocean terminals for export. Area timber companies like Weyerhaeuser are typical. Its headquarters books space on a container ship traveling to overseas ports, but Weyerhaeuser relies on CIT to get its product to the dock on time.
Dawson has a network of trucking companies he calls for just such a need. “Today I have to get lumber to the Port of Wilmington by 4:00 p.m.” says Dawson. If the trucks miss the deadline, they find themselves in the same bind as late-arriving tourists. Like no shows at the Hampton Inn, the shipping company offers the space to someone else.
CIT’s headquarters in northwest Charlotte is a storage site for 300 shipping containers, the ingenious 20 ft. by 8 ft. by 8 ft. boxes pioneered by North Carolina native Malcolm McLean. Containers coming into Charlotte by rail from ports around the country are picked up by area truckers at the CSX rail yard or at the new Norfolk Southern Charlotte Regional Intermodal Facility at Charlotte Douglas International Airport. The truckers deliver the containers to a customer and bring the empties to CIT for cleaning, storage and reuse.
“Ninety-five percent of our shipping containers are empty,” says Dawson. “Basically my facility is nine acres of asphalt with two machines that lift containers off or onto truck chassis. Anyone who needs containers lifted comes here. And it is easier for exporters to get an empty container here than to go to Wilmington.”
Wilmington: N.C. Deep Sea Port
In the mid to late 1980s, containers came to Charlotte from the Port of Wilmington by truck and rail. The old Seaboard line moved 300 containers a month by rail to the Queen City. North Carolina State Ports Authority (NCSPA) paid the rail line $1 million annually for the service.
In 1989, three years after the merger that formed CSX, rail container shipments to Charlotte ended. CSX claimed there was not enough volume at Wilmington to justify continued rail service and that major hub ports like Savannah, Charleston and Norfolk were better able to handle container shipments inland by rail.
“We have been in conversation with CSX about resuming that service,” says Tom Guthrie, director of liner services at NCSPA. “But we’ve not been successful yet.” There are two sides to CSX, explains Guthrie: CSX-I, the intermodal container division, and CSX-T, the boxcar division. CSX-T trains leave Wilmington every day. “We are trying to get CSX to add containers to that train a couple of times a week.”
North Carolina has been in the import and export business long before 1984 when Charlotte became an inland port. In 1945, the General Assembly created the State Ports Authority to develop and improve the harbors and seaports at three ports: Wilmington, Morehead City and Southport.
In his book, Waterways to the World, historian Walter Turner explains the unintended consequences of that political decision. “In retrospect it would have been wiser to begin with a clear understanding to make Wilmington the major port, with Morehead City as a secondary port. One of the key reasons the state ports authorities of Virginia, South Carolina, and Georgia have been successful is that each had a mandate to build one major state port.”
Today containers and bulk cargo like dry cement dominate the 284-acre Port of Wilmington. Grains, chemicals, fertilizers, ores, minerals and cement are Wilmington’s chief imports. Forest products like lumber, paper and forage for livestock lead the list of exports with woodchips and wood pulp close behind.
Before the invention of the forklift, bales, barrels, bags and lumber were considered bulk cargo. They now go by the moniker break bulk. North Carolina’s break bulk lumber market has declined significantly since 2006 with the collapse of the housing market attributed much of the blame.
The cargo is quite different at the Port of Morehead City. No container ships dock there. Bulk cargo rules the import and export sides of the 128-acre port. Sulphur products, rubber, scrap metal, potash and ores are its chief imports. Phosphate and phosphate products are by far the terminal’s leading export. PCS Phosphate is the largest player at the Morehead City port. Its phosphate mine in Aurora, N.C., is one of the richest in the world.
Southport is a different story. After spending $30 million in 2006 for 600 acres north of Southport, North Carolina State Ports Authority had dreams of a port that would rival Savannah and Charleston. New super-sized ocean-going transports that would easily maneuver through an expanded Panama Canal were the prime customers for the North Carolina International Port. By 2011, the dream evaporated. There were already enough deep East Coast ports for post-Pamamax vessels that are expected in 2015.
Ports are considered post-Panamax-ready when their channel is 50 feet deep, their cranes are capable of loading and unloading the larger and wider ships, and their docks are engineered to handle the new and larger cranes. Southport was too shallow, too remote, and too late to play in U.S.A.’s major league. Development is officially on hold and there is talk of converting the area to a state park, not a port.
Though North Carolina States Port Authority’s mission is to enhance the state’s economy, it only benefits a few instate companies. In Waterways to the World, Walter Turner estimates that 75 to 80 percent of North Carolina’s businesses that engage in international trade utilize ports outside the state.
Savannah: Ga. Deep Sea Port
Savannah pops up on the radar screen of many importers and exporters. For the past 15 years, it has been the United States’ fastest growing port. The Journal of Commerce reports that among the 41 East Coast ports, Savannah ranks second for container tonnage after New York/New Jersey. Their second place standing covers both imports and exports. After Savannah, Norfolk comes in at No. 3 with Charleston at No. 4. The North Carolina’s ports at Wilmington and Morehead City are at the bottom of both lists.
Savannah is now in the construction phase of SHEP—the Savannah Harbor Expansion Project. It has taken 15-years of plans, studies, applications, postponements, environmental discussions, comment periods, permits and Acts of Congress to get to this point. Construction will take four years and result in a 47-foot deep harbor and a 49-foot entrance channel for 36 miles of the Savannah River.
The project includes developing connector roads from the port to I-95 and I-16. The result will be a single, massive container terminal on a 1,200-acre footprint. “That allows the kinds of efficiencies you don’t find at the typical American port,” says Robert Morris, senior director of corporate communications at GPA. “Cargo traveling by rail or truck goes to one facility to drop off or pick up loads. It presents a great opportunity for businesses to increase speed and efficiency and reduce cost.”
Georgia Ports Authority (GPA) manages two seaports: Savannah and Brunswick port, 80 miles to the south. Georgia’s imports mirror what the average American thinks we bring to our shores. Leading the list is furniture, the product North Carolina lost to overseas manufacturers in the late 1990s. Next are retail consumer goods, machinery, appliances, electronics, automotive, hardware and houseware goods. Mooresville’s Lowes, the country’s second largest hardware chain, and Charlotte-based Electrolux are among Savannah’s major importers.
Food ranks second after wood pulp as GPA’s leading export. And poultry is a major player in the food big leagues. By year’s end, GPA will be well into the second phase of its new 200,000 square-foot Nordic Cold Storage facility. When completed, Nordic will blast or shock freeze more that 10 million pounds of poultry and produce each week. The Port of Savannah already handles nearly 40 percent of the nation’s containerized poultry exports.
The Colonel’s Island Terminal at Brunswick is GPA’s automobile export and import center. It is currently the second busiest auto terminal in the United States with double-digit growth in the past three years, says Morris. Automobiles exported include KIA, BMW and Toyota. Mercedes-Benz automobiles assembled in Vance, Ala., are shipped from Brunswick to Germany, the fatherland of this iconic brand.
Charleston: S.C. Deep Sea Port
Add Greer, S.C., to America’s short list of dry inland ports. The 40-acre site opened in October 2013 as part of the South Carolina State Ports Authority (SCPA). Unlike Charlotte’s inland port, rail traffic provides a vital link to the sea.
“Ten trains run weekly,” says Erin Pabst, public relations manager for SCPA. Five import and five export trains run overnight between Greer and Charleston. Rail traffic to and from Greer by Norfolk-Southern has removed an estimated 25,000 containers traveling by truck along I-26. SCPA expects containers to and from their inland port to eventually reach 100,000.
While CSX trains may not travel between Charlotte and Wilmington, there is good rail connectivity from Charlotte to Greer and Charlotte and Charleston provided by Norfolk-Southern. That fact plus its size, efficiency and productivity gives the Port of Charleston a competitive advantage over Wilmington for Charlotte’s business.
Even North Carolina’s highways favor Charleston. Interstate travel from Charlotte to Charleston is almost 100 miles shorter than the I-77, I-85, I-40 trip from Charlotte to Wilmington. No wonder Pabst says, “Charlotte is one of our largest import and export markets.”
Among the larger North Carolina companies connecting to South Carolina ports are Siemens, Continental Tire, Deere-Hitachi, Husqvarna and S&D Coffee. Looking at the bigger picture, much of our furniture, lumber, machinery parts, chemicals, textiles and recyclable materials such as PET plastics and paper is exported from Charleston. Even our frozen turkeys head to the Palmetto City. “Poultry is a growing market for the SCPA,” says Pabst.
Two New S.C. Deep Sea Ports?
There are two new Southern ports are on the drawing board.
South Carolina Ports is well into Phase 1 demolition, site clearing and construction of the 280-acre Navy Base Terminal. This three-birth SCPA-funded terminal is located on the south end of the former Charleston Naval Shipyard. The federal government closed the ship-building and repair facility in 1996.
Navy Base Terminal is expected to increase container capacity of the Port of Charleston by 50 percent when it commences operations in 2019. Since 2005, the area north of the new terminal has undergone revitalization as a mixed-use urban hub and historic district for the city of North Charleston.
Prospects for a new terminal in Jasper County, S.C., do not seem as rosy. Putting aside a rivalry that extends beyond football, South Carolina and Georgia signed an agreement in 2007 to collaborate on the development of the Jasper Ocean Terminal. That key piece of land sits on the Savannah River south of Hilton Head Island.
Last year a consulting firm estimated that it would take 13 years to obtain the necessary permits to build the new 1,500-acre terminal, the country’s largest contiguous port. Jasper Ocean Terminal Board Chair Dave Posek apparently wants to delay construction even further. He prefers waiting until the ports at Charleston and Savannah near capacity in about 17 years.
Are Southern ports ready for the big changes that lie ahead once an expanded Panama Canal opens in 2015? Charleston and Norfolk are ready. Savannah will be ready by 2018, the completion date for its often delayed expansion. The Port at Wilmington will not be able to accept the largest post-Panamax ships, but that is not necessarily a disadvantage.
Senior Director for External Affairs for NCSPA Laura Blair explains: “There is not one post-Panamax vessel, but a wide variety. We are talking with our customers and asking what they think we need to do to meet their needs.”
The ports at Wilmington, Charleston, Savannah and Norfolk are the South’s gateway to global trade. They are job-creating magnets for international trade and investment. In what many are calling the post-Panamax decade, these great economic engines will provide Charlotte businesses with an array of opportunities for new markets, more sources of raw materials and greater profits.
Sea Express America Corporation, or more familiarly S.E.A. Corp., is an international logistics company providing ocean transportation services to its clients. It strives to be a turnkey operation, analyzing each client’s needs, knowledge and country requirements to successfully export products from door to door.
“We operate like a travel agency for freight,” quips S.E.A. Corp. President Myra Heavner. “We connect manufacturers and corporate clients with shipping lines to move goods.”
S.E.A. Port offers its clients complete supply chain management. Services include: warehousing, loading of containers, building customized crates, palletizing cartons, labeling cartons and negotiating specialized pricing. It also offers break bulk services, roll-on/roll -off services for tractors, trucks or anything with wheels, open top equipment, flat rack equipment, refrigerated containers, and airfreight.
Although Heavner says she inherited her entrepreneurial spirit from her parents, she admits that she never planned on running a global logistics company.
“I always wanted to be a TV reporter and be on the news,” she laughs.
A native of Lincoln County, Heavner graduated from West Lincoln High School and then Gardner-Webb University with a business degree. She began her career in Cherryville, working for Carolina Freight Carriers International Division. When her division was sold in the late 1990s and her job relocated out of state, Heavner and a partner saw an opportunity for a new career and started S.E.A. Corp. in 1998.
Eventually Heavner bought out her partner. She credits the company’s 14 years of consecutive growth, from $3.7 million in 1999 to $18.6 million in 2012, to core values and a strong mission. S.E.A. Corp.’s core values are to operate the business with simplicity, efficiency, accountability, caring, professionalism, trust, integrity, urgency, and timeliness.
“Our mission,” says Heavner, “is to build long-term, mutually profitable partnerships by exceeding our clients’ expectations, while creating an environment of excellence in which every individual is valued.”
And those values and mission are meeting the test; S.E.A. Corp. grew 30 percent from 2011 to 2012. Since 2011, employment has doubled to 14 full-time and six part-time employees, and the company has doubled the size of its facility in uptown Lincolnton.
“When we first started out, a representative from the North Carolina State Port Authority heard of a new company in Lincolnton and visited our office,” remembers Heavner. “She didn’t seem to think we would never last or be taken seriously.” Today, that person covers the country as a sales agent for S.E.A. Corp.
Over the years, S.E.A. Corp. has had its share of challenges to overcome in order to compete with larger Non-Vessel Operated Common Carriers (NVOCCs). It has continually invested in new technology, hired additional employees, and expanded its office capacity to accommodate the growth in business.
For the first eight years, S.E.A. Corp. didn’t have a contract with a major shipping line. Instead, Heavner piggybacked on competitor’s contracts. She chased a direct contract by making regular phone calls and traveling to New York to make personal contacts.
“I had to prove that someone in Lincolnton, N.C., had enough business to warrant a contract with a global steamship company,” she says.
Finally, one firm gave her a contract and S.E.A. Corp. fulfilled it. That was just the foot-in-the-door Heavner needed. Today S.E.A. Corp. has a vast network of dependable steamship lines and worldwide agents at its disposal. It utilizes over 200 agents in over 166 countries, ensuring its transportation services can reach the most remote areas of the world.
Heavner describes the team at S.E.A. Corp. as working in a collaborative role as they assist customers with analyzing, identifying, and setting up an efficient cost effective supply chain in six continents.
“Our customers rely on us to be experts in our field of logistics,” asserts Heavner. “They rely on us to provide them with all requirements to avoid having any delays in the supply chain.”
In addition, S.E.A. Corp. directs clients within S.E.A. Corp.’s professional network for assistance with ancillary services such as letters of credit; USDA and FDA certifications; processing of car title clearances for automobiles, boats and motorcycles leaving the U.S.; preparation of certificates of origin; legalization of documents and pro forma invoices; and individualized customs compliance and training as needed for new exporters.
“When our booking team makes new bookings for our customers, we advise them of documentation requirements needed at the destination,” says Heavner. “In some cases we go out and help them obtain these documents.”
For example, S.E.A. Corp. had to obtain a B-13 number for freight being exported out of Canada. This number had to be on the bill of lading before the freight could be loaded on the exporting vessel.
In another situation, a small furniture warehouse in North Carolina has monthly exports to Central America. This warehouse is a consolidator of multiple furniture suppliers. Due to the complexity of this account, the S.E.A. Corp. documentation team has taken extra steps to obtain all of their suppliers’ pertinent information to prepare the shipper’s export declaration to obtain the Automated Export System Number required on every bill of lading.
S.EA Corp. also prepares ocean bills of lading from commercial invoices; it is a long and in-depth process, but it is ultimately cost-effective and eliminates any delays when the freight arrives at its destination.
Heavner has a passion for educating and assisting entrepreneurs interested in opening their own export business. In 2001, after the terrorist attacks on September 11, the textile markets locally and internationally began to decline. When a freight forwarding client who specialized in textiles lost her job, she called Heavner for advice.
Heavner encouraged her to use her experience and knowledge to continue helping exporters in the U.S. by applying for a Federal Maritime Commission License (FMC). Heavner walked her through the application process to obtain a license and open her own minority, woman-owned business. Heavner introduced her to tariff filing requirements and educated her on the rules and regulations of the FMC. Heavner also recommended companies she could work with to secure her bond to meet the FMC’s requirements.
Eleven years later that woman is still devoted to textiles with 15 employees, and has diversified into exporting furniture for schools and hotels, pharmaceuticals, and aircraft parts from the U.S. She has also hired a customs broker and is involved with imports.
That former client turned to Heavner at S.E.A Corp. “because of the dedication and quality of service their team displayed at my previous company; I knew I could count on them. The foundation we built has turned into a lifelong partnership.”
Heavner also helped and encouraged another friend in the organization and startup of trading services to match U.S. exporters with international buyers. That person attests, “Without the assistance and experience of S.E.A. Corp., I would never have considered starting my own company. S.E.A. Corp. opened the door and assisted me with the startup.”
Heavner has also focused on helping exporters increase their exports and expanding the growth of U.S. products and trade in various parts of the world. In one case, S.E.A. Corp. worked closely with Caudill Seed, a seed producer in Granite, Okla. Caudill began working with Asian cattle ranchers on cultivating rye seed for the Asian geographics and climate. Caudill was successful in developing a hybrid seed in the U.S. that needed to be exported to Busan in South Korea and delivered within a six-week period.
S.E.A. Corp. worked with Caudill Seed to position empty containers from the farms in Granite to Busan. Once the items were loaded and cleared by USDA for export, S.E.A. Corp. returned the loaded containers to the port of Houston. It prepared all of the export documentation and tracked and traced the containers to ensure the product arrived at its destination on time and within the terms of the letter of credit.
As a result of the collaboration with S.E.A. Corp., Caudill Seed has expanded to cover South Korea, Italy, and Durban, South Africa. Caudill is now anticipating an expansion involving Brazil, Asia, Europe and South Africa.
S.E.A. Corp. also worked with Indiv, a company located in Springfield, Mo., that sells products associated with the poultry raising and processing industry. Its clients are third world countries in need of economical solutions to provide their populations with adequate protein diets.
Beginning in 2008, S.E.A. Corp. began assisting Indiv on opening up markets in Guatemala, Venezuela, and Honduras. Through constant communication with steamship lines, S.E.A. Corp. worked to secure competitive pricing and provided Indiv with the necessary documentation required to open doors for new opportunities. Their expertise was needed to ship goods and clear customs without delays.
S.E.A. Corp. was also able to assist Indiv in expanding its business to Russia. A meat processing company in Novorossiysk wanted Indiv to help turn barns into poultry houses. Indiv turned to S.E.A. Corp. to coordinate all of the logistical aspects of the project and to provide the required documentation. The project was successful and projects for 2014 include new markets in Kenya, Asia, Managua, Nicaragua and Trinidad.
“The key to our success is our employees,” says Heavner. “We only hire dedicated employees who care about providing excellence for our clients and who are willing to go the extra mile. The customer is the most important person in our business, and we only hire people that understand and treat the customer as the lifeblood of the business.”
As Heavner looks ahead, she sees the growth S.E.A. Corp. has enjoyed during the past decade continuing. Although the growth in U.S. exports has slowed down during the past two years as a result of a changing global economy, Heavner says that is expected to change. She says U.S. exports are expected to gradually pick up through 2017. In order for S.E.A. Corp. to keep up with the growing demand, the company’s five-year plan is to strengthen the company’s infrastructure.
“Global logistics can be handled in New York, Long Beach, Asia or Lincolnton, N.C.,” asserts Heavner. “A company’s customer service center can be located anywhere in the world that has the technological resources of the 21st century.”
Heavner keeps her pulse on the market trends of her industry, including new regulations and related issues. Members of the S.E.A. Corp. team attend global networking conferences throughout the year. These conferences, such as the TPM Conference in Long Beach, Calif., are attended by the world’s most senior international logistics experts. They offer speeches, panel discussions and roundtables to address the major challenges faced by the industry.
Heavner, herself, spoke at the International Logistics Network in Vancouver, Canada, in 2013. The conference was attended by 1,700 members from 166 countries. Heavner spoke on pulling resources from each member to develop a seamless supply chain management that would benefit organizations exporting from the U.S.
These conferences also provide the S.E.A. Corp. team members an opportunity to meet and get to know personally the leaders in the logistics industry.
Heavner attributes the success she has achieved as a woman business owner to the parents who taught her to work hard, and she has no intention of relaxing anytime soon.
“Hard work and a never-give-up attitude are the two key components to my success,” she asserts. “I believe in going the extra mile, treating others as you want to be treated and setting the bar high. These qualities will lead S.E.A. Corp. to continued success.”