Press release submitted on behalf of LS Mtron.
California-Based Manufacturer Grows Plastics Molding Operations with help from LS Mtron Injection Molding Machines
Beverly Hills, California is not your typical location for a leading plastic molder’s corporate headquarters. But there is nothing ‘typical’ about US Merchants or its President and CEO, Jeff Green.
US Merchants might be the biggest injection molding company no one has heard of. Based in Beverly Hills, the company has molding operations in Ontario, CA, Houston, TX, Prince George, VA, and a brand-new plant about to start up in Phoenix, AZ. While the company has been in existence since the 1980s, they had no experience in injection molding until 2014. Today, they have several hundred LS Mtron injection molding machines producing totes, bins and other products for several large warehouse clubs and retailers.
In a recent interview at his offices in Beverly Hills, Jeff Green shared his company’s story, which began with a small sporting goods shop in Beverly Hills. Today, that small company, still privately owned and led by Green, sells over ’10 figures’ (over $1 billion USD) of product annually, and has no plans to slow down – it continues to aggressively grow its operations worldwide.
The Merchants of Tennis
As a young man, tennis was Jeff Green’s life. He attended Hamline University in Minnesota, then Whittier College in California, but eventually left to start a small business.
“I didn’t graduate from college, but I’m happy to say I just recently got my degree,” he said. On May 13, he earned an honorary doctorate degree at Hamline’s commencement ceremonies in Saint Paul, MN. “I joked during my acceptance speech that the graduates should be proud they’ve accomplished what they have in just four years – it took me 54!,” he said.
In 1979 in Green opened a store in Beverly Hills called ‘The Merchants of Tennis’. He sold equipment and other sporting goods and had two tennis courts out back, where he taught lessons. When the tennis boom slowed down a bit in the 1970s, he started exporting merchandise. He heard from a friend about a brand-new company starting up with two stores in Washington and Oregon, who might be interested in talking with him about supplying products. A phone call he made to this new company changed his life.
“The new company was the beginning of the warehouse club concept. After calling and talking with them I started selling them goods, and we grew along with their company,” he said.
Besides supplying their new customer with sporting goods and other products, “I got very involved in packaging and displays solutions to help them out,”, said Green, “and this became a big business for us.”
The first products he sold to them were leading brands of sunglasses, footwear, fragrances, and other items. This led into a much larger business relationship, and US Merchants was born. Today, US Merchants has a workforce of over 4,000 people and supplies many big box and membership stores and numerous other international customers with a huge variety of products. “We supply pretty much everything but food,” said Green. “This helps our business always stay strong. Our business isn’t predicated on any one category, so we have no slow periods.”
Molding a Better Tote
In 2014, one of their customers approached Green with a challenge. The company was selling a 27-gallon tote that they felt needed to be higher quality, and asked if US Merchants could produce a better product. “I guaranteed them we would produce a tote that was better than what they had,” said Green. “We had no experience whatsoever in injection molding, but in keeping with our company philosophy, we decided to take on this project ourselves.”
Green and Larry Khemlani, US Merchants VP of Operations, attended the Plastec West show in Anaheim to meet with injection molding machine suppliers to learn more about the process. “Everyone we talked to wanted to sell us machines, but no one really wanted to take the time to explain what we’d need to do to start up a molding plant and get into the molding business,” said Khemlani. “That is, until we met with Shingo Hirate.”
Hirate America had a booth at the show and company President, Shingo Hirate, took the time to talk with Green and Khemlani about what they’d need to get up and running with an injection molding operation. “I told them they’d need a lot more than just the molding machines,” said Hirate. “We discussed everything – machines, molds, auxiliary equipment, and resin, and even what they’d need for personnel, plant layout and plant utility requirements. Not long after that, we got an order for 4 molding machine cells, and shortly thereafter, another order for 3 more. Once everything was up and running well, they continued to purchase more machines.”
Hirate represented another molding machine supplier at the time, but after a couple orders from US Merchants, they recommended to them that they switch to LS Mtron injection molding machines. “We worked closely with Steve Gwon at E-Solution Inc., as they had great connections with the leading plastics industry suppliers from South Korea,” said Hirate. “We decided to start selling the LS Mtron line of machines which came highly recommended for their high quality and capabilities.”
Steve Gwon said besides their better overall quality, they switched to LS Mtron because of their flexibility to work with their customers. “A good example of this was LS had a 1200- and 1400-ton machine, but neither was perfect for this tote application at US Merchants,” he said. “They were happy to work with us and build a special 1300-ton machine with special features like custom tie bar spacing, unique screw configurations, etc. to create the best possible machine for this project.”
Millions of Totes Per Year – and Counting
Not long after the initial start-up of their molding operations, the business grew exponentially and US Merchants now has many more machines running in Ontario, CA (3 plants), Phoenix, AZ (brand-new plant starting up soon), Houston, TX (1 plant and another coming soon), and Prince George, VA. New molding plants are also coming soon, including the company’s first overseas plant in the UK, and another in the Montreal area.
US Merchants currently produces several million of the 27-gallon totes per week, said Larry Khemlani. “We can’t make them fast enough,” he said.
Gwon and Hirate handled everything to get US Merchants up and running. They provided machines, molds, hot runner controllers, auxiliaries, robots/automation, chillers, blenders and material handling systems, gantry cranes, mold tilters, part design, and more. “We helped with laying out and commissioning the new plants, and employee recruiting, too,” said Gwon.
“Our ability to service and repair the machinery and equipment right away has always been a big part of our success,” said Hirate. “We’re always available to help with any questions or problems that might arise.” Gwon and Hirate keep track of machine performance and are in charge of maintenance, and employee training for all plants.
Quality First
Jeff Green says the biggest part of US Merchants’ success is the company’s commitment to quality. “Quality is a sickness to me,” he said. “We don’t cut corners, ever. Quality is the most important thing we provide here, and quality stands the test of time.” While company profits are important, they aren’t the most important thing at US Merchants. “It’s not about the margins here – it’s about giving our customers more than they expect, it’s about the quality.”
Khemlani, who has been with the company for 23 years, agrees but adds one additional attribute. “It’s not about price, it’s about quality, but I’d add that it’s also about relationships,” he said. “For instance, our relationship with Steve Gwon and Shingo Hirate has led to our success in injection molding. And Jeff Green is the leader in that effort. He is happy to work with not just large companies, but small ones as well.”
Khemlani said some of US Merchants best customers started out with small orders. “Jeff is willing to offer the smaller companies the same discount pricing he provides to the larger ones,” he said. “We are willing to take chances on small companies to show them we want to work with them and form real partnerships. We want to be their supplier as they grow.”
A Family Business
During our 2-hour conversation, Green’s phone never stops ringing, and he has numerous ringtones so he knows who’s calling. He silenced his phone every time but twice; once it was ‘the Chairman’, he jokingly said, quickly telling us that ‘the Chairman’ is his wife, Marie. Marie is very involved in the family business, having originally opened the company’s Prince George, VA plant, as well as the Montreal plant with other family members.
Fifty-four years after he left college to start up his sporting goods store, Jeff Green is working harder than ever. “Jeff is amazingly energetic,” said Shingo Hirate. “He works nights, weekends, and is very involved in all of the company’s operations – it’s who he is.”
Larry Khemlani says that while Green has an office at the company’s Beverly Hills headquarters, he does most of his work in a cubicle amongst the office employees there. “US Merchants is a big company, but Jeff continues to run it like a small business,” he said. Green’s wife Marie, daughter Jennifer, son-in-law Brian, and other family members are all very hands on in all aspects of the business.
Photos of Jeff and Marie’s three grandchildren are even featured on the sides of some of the company’s trucks. Trucks which, of course, US Merchants owns; Green decided in 2004 to start a trucking business. “We were shipping products from LA to Virginia and the driver mentioned to me the overall cost of doing the run. I calculated it would be a lot cheaper to do it ourselves, so we bought a few tractor-trailers. We now have a large fleet of them, and they serve not only our company but our customers as well.”
Future Growth
While the company produces an assortment of several models of totes and crates in very large quantities, sporting goods products and more are also in production. LS Mtron two-platen 1200-, 1300-, and 1400-ton machines are used for the totes and lids, and US Merchants uses LS 390- and 500-ton all-electric machines for their smaller part applications.
In June, a brand-new US Merchants plant in Phoenix started up with 69 LS Mtron machines, including a number of all-electric, 2,000-ton LS Mtron machines. A second facility is coming to Houston, and the company will be opening its first international molding facilities in Montreal and the UK.
Jeff Green says the coming UK expansion is especially important for US Merchants. “It will be our first overseas plant and it will lead us into a lot more business with the warehouse clubs and mass merchants in Western Europe,” he said. “We already sell products in the UK, Spain, France, Iceland, and more, and we expect that to grow.”
Beyond that, Green says Asia may be next. When asked why he never moved any of their manufacturing operations to China, Green says that’s part of the company’s quality control culture. “I’ve wanted to always be in charge of quality, and to stay hands-on with the business,” he said. While the lure of cheaper labor drew a lot of US manufacturing to China and other countries over the past 30 years, ‘there are plenty of things those countries can’t compete with us on’, said Green. “It’s all about quality control, inventory management, and relationships.”
When asked about future injection molding plans, Green makes it clear he will be continuing the relationship with Steve Gwon, Shingo Hirate, and LS Mtron. “Overall, all our machinery and equipment has and continues to perform very well,” he said. “We have had tremendous success because of their service, expertise, and follow-up, and they will continue to be an important part of our growth.”
For more information, visit www.lsinjectionusa.com.
