By Joe Boomgaard | MiBiz
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The DECC Company President Fred Mellema, right, can’t do much long-term planning because of the current volatility in the manufacturing segment, but he did notice an increase in orders in the first two quarters of the year — the most since 2007. PHOTO: JOE BOOMGAARD

GRAND RAPIDS — When coating operation The DECC Company lost a major contract because a customer pulled out of an entire market segment in 2008, the company certainly felt the pain of a difficult economy. But by diligently working to stay top of mind with the customer, it demonstrated that persistence can indeed pay off.

When the company completed a major expansion in 2007, it was in response to a contract with a major global manufacturer in the truck and heavy equipment market. The contract was supposed to put new equipment and new lines to use and provide a stable, long-term business for DECC, which was providing a specialized corrosion protective application for aluminum parts in diesel truck engines, said Fred Mellema, CEO of DECC.

A year into the program, the OEM decided to quit making diesel engines altogether. But rather than burn any bridges, DECC continued to work with the OEM as it wound down production of the engines. Mellema said his people kept in touch with the manufacturer in case new projects might come about — and they did this year.

Since 2010, DECC started a new line of business with the same OEM, only this time in their remanufacturing business and using an application developed by the OEM. Mellema said about 30 percent of DECC’s business can be attributed to the new application.

“Now, we’re looking at making a transfer of this technology from the diesel side to the automotive side. If we can look at some of the auto OEMs, that would be a … fit for us,” Mellema said.

The first two quarters of sales in 2011 have been the best the company has seen since 2007. Mellema said there’s still no way to make any sort of long-term predictions in what’s become a month-to-month reality. At the same time, costs for chemicals and coatings continue to rise. Still, the company added three new employees in the last two months despite the uncertainty.

After a “quiet” and “very difficult” 2009, the company has bounced back thanks to the company’s use of whole systems software that eases the traceability of parts and processes, a broad push for market diversification and a ramping up of the company’s marketing efforts, Mellema said.

When Mellema bought the company outright in 2006, DECC worked entirely with the automotive sector. The original diesel project was an initial step toward diversification. Today, only about 30 percent of the company’s business is in automotive with the majority — about 60 percent — now coming from the diesel segment. The remaining 10 percent comes from a mix of industries, including food processing equipment, office furniture and medical devices.

The timing of the diversification efforts was fortuitous as the recession hit the automotive industry in 2008 and 2009. “Everything just came to a standstill. We knew automotive just dried up,” he said. Key to the effort was building a team of engineers and focusing on becoming a better company from the shop floor to the executive offices, especially as it related to company culture. As the culture evolved, he said the employees were better able to use their talents and help the company develop and get into new things.

“Our VP of operations was instrumental in implementing this (culture shift),” Mellema said. “He said we needed to treat adults like they should be treated. They did not come to work to be told what they need to do. We wanted people who wanted to be here and want to do a quality job and put quality product out the door.”

To continue that effort, DECC is beginning to seek work with the military. Many of the technologies in coatings and applications the company uses in the automotive and diesel sectors have applications that would fit for military vehicles and other areas, he said, noting the goal is to have the sector account for about 10-15 percent of the company’s business. Rather than pursue the procurement side, DECC is working on promoting its specialized capabilities and identifying niches within the military.

Like many manufacturers, DECC also had to start selling itself and marketing its capabilities much more than in the past. The company developed a stronger website with a focus on search engine optimization, as well as did some direct communication with potential customers for the first time in the company’s history.

“We’ve got the young guns in charge of this program,” Mellema said of the website and other social media, noting that if Facebook and Youtube are where new purchasing people are searching for information, “then that’s what we’re going to do.”

For example, the company has started marketing the remanufacturing side of the business by focusing on the amount of material that can be saved from the landfill. In the last year and a half, DECC’s remanufacturing business has led to the prevention of 500 tons of material from ending up in the landfill, the company estimates. It has also started to talk about its own investments in a regenerative thermal oxidizer, which resulted in a 90-percent reduction in its VOC emissions, as well as its partnership with Hope Network to provide employment opportunities for disadvantaged persons.

Again, the marketing effort goes back to the company’s culture. DECC’s shipping coordinator had an interest and an expertise in marketing and a desire to grow within the company, so the management has him focus a portion of his time on that versus strictly focusing on shipping.

“We’ve got younger guys that are very hungry to do different things,” Mellema said.