Indiana Rotomolding Capitalizes on Multiple Locations
by Dianna Brodine
Profile Fall 2012
The history of Indiana Rotomolding is similar to a complicated math equation, with plant locations added and subtracted as the ownership changed. Founded in 1988 as Elkhart Plastics, the company grew to four locations, primarily serving the recreational vehicle tank market in Northern Indiana, before it was sold to Promens hf, an Icelandic holding company, in April 2006. Promens had seven other locations in North America, and the former Elkhart Plastics companies were rolled into one large group with 11 total facilities. Five years later, Promens sold its US operations to a private equity firm. Shortly thereafter, US-based ownership group Indiana Rotomolding, Inc. (IRI) approached the private equity firm with a plan to purchase the three Indiana plants, as well as custom molding plants in Littleton, CO and Ridgefield, WA.
The common denominator? Jack Welter. Welter joined Elkhart Plastics as an accountant, remained as an executive during the years when the company was owned by Promens and was a key figure in assembling the ownership group that formed Indiana Rotomolding in 2011. Welter currently is the president and CEO of the 500-employee custom rotomolding operation.
National Footprint, Diversified Markets
Today, the five facilities that make up Indiana Rotomolding produce a variety of custom molded products related to the recreational vehicle, commercial vehicle, marine and agricultural industries. These include RV tanks and storage liners, marine furniture, agricultural diesel and DEF tanks, hoppers for salt used in ice removal from roads, cases for mining drill bits and highway safety products. One item not on the typical molded product list is produced at the Littleton, CO facility roping steers used for rodeo training.
Indiana Rotomolding produces volumes from several hundred pieces up to 30,000 per year, depending on the product. Since many of the molded items are very large (one rotomolded dumpster produced by IRI measures 8x8x8), transportation costs would be prohibitive if the products need to be shipped across the country for delivery to an OEM. The location and number of IRI plants has proved an advantage.
Our national footprint is unique in our industry, Welter said, and it allows us to serve customers that need product across the US. Each plant has its own product lines, with its own production schedules. The exception is the occasional request by a customer to move a mold closer to an OEM, which happens periodically with products like the large dumpster product line. We can move tooling as necessary, but our plants typically run as stand-alone businesses, he explained.
Welter, located at the 70-employee headquarters facility in South Bend, IN, has general oversight of all five facilities. While the operations staff of the outlying plants report to him, Welter relies on his managers to make daily operational decisions. It comes down to having good, quality people running those operations, he said. I cant possibly be involved in the day-to-day operations of all five facilities, nor do I want to be. We can only be successful if we have the right people in the right spots.
Indiana Rotmolding has diversified significantly over the past five years, realizing that the companys roots in the recreational vehicle market, while still important, also are highly recession-sensitive. While the recreational business still is a large part of our company, we already have significant market share in that area said Welter. Weve made a focused effort to branch out. After analyzing the markets that make sense for rotomolding, but that we werent participating in, the agricultural and commercial vehicle markets made sense for us. We knew it could be significant for our progress. IRI focused its efforts on pursuing business in those markets and has been successful, primarily with diesel and DEF (diesel exhaust fluid) tanks.
While many of the companies profiled in Plastics Business have focused on small, easily repeatable injection molded parts, Indiana Rotomolding often molds products containing in excess of 400 pounds of plastic. Parts of that size have heavy-duty requirements, both in terms of space and personnel.
Facilities range in size from Littletons 45,000-square-feet to Middleburys 200,000-square-feet. Forty-one carousel rotomolding machines are divided among the groups five plants. In addition to rotomolding, IRI offers mold fabricating, assembly, part design and packaging. Three of the facilities also are ISO 9001:2008 registered. In almost all cases, our product goes directly to the OEM, explained Welter. We do not ship anything from our facilities that needs additional work performed, so well do whatever assembly is asked of us, within reason. Examples include attaching metal framework or wheels to a product, trimming (whether hand trimming or CNC trimming) or special packaging. With our process, said Welter, Half of our people are running machinery, and the other half are in some stage of the assembly, trim or packaging process.
Across the company, 10 employees are dedicated to mold fabrication. These mold builders are highly skilled aluminum fabricators and welders. Theyre taking plate aluminum and forming molds out of it, Welter explained. Its a very manually intensive process that requires a high degree of skill.
Welter continued, In almost all cases, we bring in someone with aluminum welding experience, and we train them to build the tooling we run. Its all in-house, on-the-job training. We try to hold on to those people, because its a unique skill set.
With employees spread across five facilities, its difficult to have a training program for all employees that is consistent since needs vary. The operations managers at each location are responsible for identifying what training is necessary and then administering that training, whether internally or by bringing in outside resources. Unfortunately, we have a portion of our workforce that is constantly turning, said Welter. For production positions, we use temporary agencies and then hire those employees into a full-time position once they pass a 90-day probationary period and have completed training.
Rotomolding is a demanding job, and Indiana summers can have temperatures climbing and employees sweltering. The machine operators have the most physical job, explained Welter. The oven is roughly 12x12x12. It runs at 600 degrees and the doors open every 20 minutes, so in the summertime its warm. Its important to Welter that the employees feel valued for the effort and sweat they are putting into the company. We have a casual atmosphere that focuses on satisfying our customers demands, said Welter. I do not want to over-manage. I believe in getting the right people in the right jobs and allowing them to get the job done.
Indiana Rotomolding has not only seen the industry consolidation of the past few years, it has lived it. The company is determined to take advantage of its position as a major player and parlay it into greater opportunity. In the near future, IRI looks to add onto its South Bend facility and will be acquiring two new rotomolding machines to serve new customer demands. We have seen modest growth in some of our long-term core markets, Welter said, and we have pursued other markets and been successful. Now, our plan is to look for conversion opportunities and to expand our footprint in the US.
IRI actively is looking for products that are currently made out of fiberglass, but would lend themselves to the rotomolding process. Thats a perfect opportunity for us, Welter said. We recently converted a pontoon boat helm from fiberglass to plastic, and our Colorado plant converted a fiberglass enclosure for a water testing station into plastic.
With seven engineers on staff, conversions from fiberglass or metal can range from a concept that needs to be tweaked to run effectively with the rotomolding process to incorporating new features into a part that it didnt have. Rotomolding allows a lot of design flexibility, he continued. The molds are relatively inexpensive, compared to other plastics processes, and rotomolding can make virtually any shape imaginable. That allows us a tremendous amount of flexibility. IRI has seen a number of conversion examples, and historically, it has been an area of growth for the company. We do not grow our business by lowering our prices to take business from a competitor, he added. Thats not a healthy way to expand.
Expansion, for IRI, means more than simply expanding product lines. As mentioned previously, the large hollow parts produced via rotomolding can be a concern when it comes time for shipping to the OEM. Thats one advantage to the footprint of our plants, said Welter. However, we do not have great coverage in the Southeast, and wed like to remedy that. That expansion will be dependent on finding the right piece of business, since IRI prefers to develop a partner relationship, rather than building from the ground up.
In the meantime, the five facilities of IRI will continue to focus on the footprint and financial strength that allow it to serve both small and large companies better than its competitors. Our level of service, professionalism and expertise are what makes us different, Welter explained. We certainly go out of our way to do whatever it takes. Each plant has at least one customer service representative on site, our sales staff is actively involved in the day-to-day business of their customers and our engineering staff is top-notch. I think that helps differentiate us.