News Life Sciences Clean Crossroads: Clean Rooms International capitalizes on growing medical, pharma niches
Clean Crossroads: Clean Rooms International capitalizes on growing medical, pharma niches
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By Joe Boomgaard | LabWork
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U.S. Senator Debbie Stabenow and SBA regional director Marianne Markowitz listen in as Clean Rooms International CEO Tim Werkema explains the company’s manufacturing process. SBA Michigan Director Gerald Moore, right, looks on. PHOTO: JOE BOOMGAARD |
GRAND RAPIDS — Take a peek into any manufacturer that works with medical devices or pharmaceuticals and one is bound to see a clean room in use.
The devices help manufacturers ensure product integrity and that the cleanliness of the products remains as high as possible. Production in other industries, like food processing and high-tech, advanced battery manufacturing, all takes place in clean rooms. Moreover, as other manufacturers in the automotive industry – particularly those dealing with finishes – look for a competitive advantage and quality control, they’re turning to clean rooms.
In that sense, the stars are aligning for clean room manufacturers, including Clean Rooms International, a West Michigan designer and maker of clean rooms since 1982.
Tim Werkema, president and CEO of the company, said much of the growth he’s seen at Clean Rooms International can be attributed to increasing FDA or other governmental regulations that call for more widespread use of clean rooms. Pharmacies, for example, have come under new requirements that they have a clean room when filling certain kinds of liquid medications.
“We’ve been doing this for 14 or 15 years and the types of users has never decreased,” Werkema told LabWork.
He sees growth opportunities particularly continuing in the medical device and pharmaceutical industries, as well as in medical research facilities, which seem to have a somewhat steady stream of funding. Clean Rooms International has also worked with companies in the lithium-ion battery supply chain.
“We’ve benefited from the battery manufacturers (coming to West Michigan),” he said.
While the company has enjoyed strong domestic business, about 10 percent of sales come from international clients, a figure that’s down from about an historic high of about 15 percent.
Nelson Werkema, president and CEO emeritus of the company who bought it in 1992, said the company fell into exports over the years, although Clean Rooms International always had somewhat of a presence in Canada.
Recent data from the Brookings Institution suggests Clean Rooms International isn’t alone. A report shows that more than 10 percent of the output in manufactured goods in the Grand Rapids area is exported internationally, mainly to North America.
The export side of the business grew out of Nelson Werkema’s love to travel and meet with potential clients, especially in Europe, but the company started to get regular export business around 1995 when it created its first website.
“That really started to bring in the inquiries,” Nelson Werkema told LabWork. “It just built. Through our reputation and results, it kept building.”
Tim Werkema said exports can provide a real growth opportunity for any small business, but companies have to strike a balance and still focus on core markets, as well as know how to avoid some of the common pitfalls.
“Financing is a big deal,” he said, noting companies need to plan ahead what to do if a foreign customer doesn’t pay. In his case, that’s meant often requiring payment before a product ships. “We’re lucky to have good companies to work with. The Van Andel Global Trade Center also has some good resources.”
Sonja Johnson, executive director of the Van Andel Global Trade Center, credited the company’s strong management team with setting a workable export strategy for the company over the years.
“They’ve served every continent around the world except one,” Johnson told MiBiz. “Companies the Trade Center has worked with over the last decade that have been diversified in international and not just the domestic markets have weathered the storm. Global market opportunities are not as quick as those in the domestic market, so you need to be cautious, set a strategy for long-term success and take advantage of programs the federal government (has focusing on) exports.”
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Clean Rooms International recently bought and moved into a formerly vacant building thanks to help from the SBA’s loan program. The company serves both domestic and foreign markets. PHOTO: JOE BOOMGAARD |
Marketing the company to the global market remains a challenge for small businesses like Clean Rooms International, and that’s where some new federal programs aim to help. U.S. Senator Debbie Stabenow and Small Business Administration personnel, including regional director Marianne Markowitz, touted the programs on a recent tour of Clean Rooms International’s new facility.
Markowitz told LabWork that the SBA is offering a range of services for the companies interested in exports, services that match with a company’s export experience and strategic plans and encouraged executives to visit www.export.gov to learn more. “There’s been tremendous growth in exports and a lot of opportunity for small businesses to (grow there),” she said.
Gerald Moore, the SBA’s Michigan director, said his organization is working closely with the Michigan Economic Development Corporation to help deliver federal resources more effectively to businesses in the state.
The tour coincided with a grand opening of sorts for Clean Rooms International’s new facility, which it was able to purchase thanks in part to the SBA’s loan program. The company worked with Chemical Bank and the Economic Development Foundation to finance the purchase of the 36,000-square-foot facility on Starr Street, just off Patterson Avenue north of 28th Street. The building had been vacant for a couple of years.
Bruce Fedewa, VP at Chemical Bank, had been working with the company for the past five years and credited the SBA programs for helping create a “good partnership.” Sandy Bloem, executive director of the EDF, said the current buyers’ market certainly helped the company get an attractive price on the facility.
The company, which employs 26 people, also received a 12-year tax abatement from Cascade Township for $475,000 in new construction and equipment.
“In our case, we’ve been in the right place at the right time and in the right niche,” Nelson Werkema said. “We have a very bright future.” LW
