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By Nathan Peck | MiBiz
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Scott Barnard says moving West Michigan Compounding’s production operations to Greenville will allow the company to continue its growth. PHOTO: NATHAN PECK

ROCKFORD and GREENVILLE – With growth comes opportunity, and strains.

As managing partner of West Michigan Compounding, a plastic recycler for the auto industry, Scott Barnard has watched sales double over the last four years. As the recycler of high temperature plastics has grown to $5 million in sales in 2009 and added new extrusion lines, the manufacturer was butting up on constraints that could limit growth in the future.

Walking around the production line at WMC’s Rockford facility, leased space in the Byrne Industrial Park, signs of the company’s growth are all around in the form of boxes of plastic resin beads ready to be shipped off to auto suppliers to become new bumpers, consoles and a host of other applications on new cars. With pallets of boxes stacked high around him, Barnard explained that the physical confines of the company’s 10,000-square-foot current space were limiting their ability to grow and meet the demands of an automotive industry that is rebounding.

“We went through this downturn just like everyone else, we experienced our business being slowed as well. We are so tied to the automotive industry, that as they came back, we were able to move to three shifts a day, five days a week,” Barnard said. “We are at the point where we are touching our capacity. We are looking at ways to grow our business as we bump into space constraints here.”

WMC was looking to double its space and searched around the greater Grand Rapids area, but couldn’t find a space that fit its needs: a relatively new building with the option to expand in the future. Working with Pamela Collins real estate advisor with Callander Commercial, WMC found a 24,000-square-foot facility sitting idle in Greenville. The building had been acquired a year ago by Greenville Spring & Wire in a trade, said Stu Kingma, VP of the Wisinski Group’s industrial property group, and sat on 6 acres, allowing WMC to expand its facility up to 75,000 square feet.

“They had a buyer that needed more space, but had 24,000 square feet that they were looking to sell,” Kingma said. “They swapped buildings and cash – the buyer ended up with an 80,000-square-foot facility, and my client took in the 24,000 foot on trade. We knew it would be easier to sell a smaller facility, and that was how my client exited. It is not a typical approach, but it is not unheard of in this market. It’s a way to deal with issues in the financing world which would otherwise make it more difficult.”

A portion of their business, the sorting, storing and grinding of parts, already takes place in Greenville, in 60,000 square feet of leased space in the former Electrolux plant’s shipping warehouse. Barnard said that the Greenville city staff and council helped ease the company’s transition to a new location, helping Barnard navigate the process for a $120,000 Community Development Block Grant from the Michigan Economic Development Corp.

To be growing in the midst of the recovery is one thing, being able to finance a move given the tight credit markets is another thing altogether.

“We knew we were looking for a newer facility, that we didn’t want to start from scratch. We are still in growth mode, and we have very low debt,” Barnard said. “We are fortunate to be funding most of our growth through our operations.”

The company purchased its first extrusion line in 2005, adding another in 2006 and added a third, twin-screw compounding line in 2008, amid the freefalling economy at the cusp of the recession.

WMC began five years ago as an entrée into the recycled resin market for The Materials Process Group. The Materials Process Group, started in 2003,manufactures and distributes thermoplastic resins to the automotive industry and other large injection molders and boasts sales of $25 million in 2009.

While recycling the rejected flawed headlamps, consoles and bumpers into materials for other industries is not exactly new, WMC has carved out a niche by turning plastics back into automotive-grade resins.

“Historically you can take recycled automotive resins and turn them into plastics for another industry. Where we add value is that we re-engineer the resins so that they can be turned back into automotive components. Our customers can then recoup (their loss),” Barnard said. “Through our technology and methods we … reclaim materials that otherwise had been going to landfills.”

Their business model has struck a chord with Tier 1 suppliers as they look to lean their operations, reduce waste heading to landfills and recoup the costs of virgin resin, and sales have doubled in the last four years.

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TAGS:

• byrne industrial park
• callander commercial
• commercial real estate
• greenville
• greenville spring & wire
• michigan economic development corporation
• pamela collins
• rockford
• scott barnard
• the materials process group