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Packed and Ready: Contract packager finds growth as companies outsource

Friday, April 29, 2011
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By Andy Domino | MSS
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VANDALIA — Tri-Pac Inc. does something most people take for granted every day.

The company is a contract packer, responsible for filling bottles and tubes with liquids like transmission fluid, carpet cleaner and lighter fluid before the products touch your local store shelves. But Tri-Pac’s efforts don’t begin and end at the liquid nozzle.

“We believe in 100-percent responsibility,” Tri-Pac President Vikram Shah told Main Street Strategies. “A consultant just gives advice. Here, you have to get your hands dirty.”

Tri-Pac’s contract with Heath Outdoor Products of Coopersville is a vibrant example of Shah’s business philosophy. Teresa Hoffman, operations manager at Heath, contacted Tri-Pac in early 2010 about filling its 3-ounce hummingbird feeders with another contractor’s specially developed nectar. During the process, Tri-Pac staff discovered that the nectar developed strains of yeast and mold, even before the bird feeders were available to customers. Tri-Pac revised the nectar formula to make it more stable, packed it into the feeders, and shipped it to Coopersville, all in the span of about a month.

“They tweaked the formula and made it better, and kept me abreast of their progress the whole time,” Hoffman said. “Most contractors, they’ll do exactly what you ask and that’s it. It was refreshing.”

Since then, Tri-Pac and Heath have continued to refine the nectar and hummingbird feeder filling processes. This year, there are 200,000 full feeders ready to ship to customers, and Hoffman said she’s confident she could easily double that order from Tri-Pac.

It’s just one success story for Tri-Pac, a company the Edward Lowe Foundation named one of the Michigan 50 Companies To Watch in 2011.

John Schmitt, a business consultant for the southwest state office of the Michigan Small Business & Technology Development Center, nominated Tri-Pac to the 50 Michigan Companies To Watch award. He worked with Shah when the company was getting established and said Tri-Pac’s ability to essentially become a one-stop outsourcing shop, contributing to several steps of a client’s product development cycle, is a sign that the company is headed in the right direction.

“Ten years ago, (a company) might have a product formulation department,” in addition to all the other tasks it was trying to perform at the same time, Schmitt said. “Now, as companies get more efficient, outsourcing is more common. The more you offer, the more successful you’ll be.”

Schmitt also credited Shah with having ideas for his customers without taking over their operations.

“He has a great ability to look at different alternatives, a lot of options and resources,” Schmitt said. “He’s able to match them up with the (appropriate) company.”

Tri-Pac was formed in 2009 and had 24 employees in 2010 at its single facility in Vandalia. The majority of Tri-Pac’s products are in toiletries and medicine, though the company has also claimed lens manufacturer Bushnell as a client, producing some of its gun-cleaning kits. Though lens-cleaning fluid is only a fraction of Bushnell’s market, attention to detail is what makes Tri-Pac stand out, Shah said.

“It’s not a category their focus is in, so nobody gave them the professional touch in that line,” he said.

Schmitt said he expects to see more businesses taking a cue from Tri-Pac, offering a variety of services to client companies searching for contract manufacturers without moving outside the U.S.

“China is not the slam-dunk it was seven or eight years ago,” he said, since the value of the dollar is closer to the Chinese yuan, and because “the service is much more friendly in your own time zone.”

More companies are finding that an inexpensive place to manufacture their products is no longer the only requirement when looking for firms like Tri-Pac. But it’s too early to tell if that call for small manufacturers will bring more to West Michigan, Schmitt said.

Even inside the U.S., more companies are paring back to their most successful products and processes, counting on others to pick up the pieces they aren’t doing any longer.

“Larger companies are not cost-effective, plus (there’s) the high cost of transportation,” said Ron Kitchens, CEO of Southwest Michigan First. “With the talent we have and the historical skills we have, companies come here to succeed.”

Shah doesn’t want to position Tri-Pac as a venture capitalist group, lending money to start-up businesses, but he is willing to offer more than bottle filling services to companies that need a helping hand.

“We integrate into the whole business cycle,” Shah said. “If you give them the infrastructure, the product will grow.” MSS

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