WALKER — Entrepreneur Steve Ehmann has experience riding the wave of business on the way up and knows what it’s like when that same wave comes crashing down.
Right out of college, Ehmann started a windsurfing school and then a chain of surfing apparel retail stores along the coast of West Michigan. When the recession of the early 1990s hit, the retail industry “got too rough,” according to Ehmann, who closed the stores in 1992.
“I took a year to tidy that all up,” he said. “I worked really hard to get out of those stores properly, which I did.”
These days, Ehmann is back to riding a new wave of success as founder and CEO of Profile Films Inc., a Walker-based manufacturer of food-grade recyclable plastic bags, sheeting and tubing.
The company posted a year-over-year increase of $10 million in sales in 2018. That came on top of 64-percent growth in EBITDA (earnings before interest, taxes, depreciation, and amortization) from 2015 to 2018.
Profile Films has found success in the vast world of plastic bags and sheeting by serving a niche market of custom polyethylene bags, sheeting, tubing and other converted products. Today, the company employs 140 people and supplies customers that include Kraft/Heinz, McDonald’s, Publix Supermarkets, Bradford White, Johnson & Johnson and others in 45 states and several countries.
In March, Profile Films was the recipient of the 2019 Outstanding Growth Award from the Association for Corporate Growth Western Michigan (ACGWM), an annual award that recognizes a company in the region that demonstrates sustained growth in sales, profitability, employment and community involvement.
The prospects for continued growth also remain positive for Profile Films. According to New York City-based Zion Market Research, the global food packaging market is forecast to expand at a compound annual growth rate of 5.4 percent from 2019 through 2025, when sales are expected to reach more than $423 billion.
Starting from scratch
Ehmann got into manufacturing after shuttering his retail ventures when he was hired by a local plastics manufacturer. But after four years of on-the-job learning, Ehmann — who “was always entrepreneurial” — decided to start his own company.
“I wanted to be a founder, an owner,” he said. “I decided to leave and start from scratch.”
That’s when Ehmann and three financial partners opened Profile Films in 1998.
“I was able to take the right people with me, and we worked hard,” he said. “Our secret was just hard work and conscientious behavior. We were really good at finding all the right things in the business: the people, the cash, the customers. We just had a knack for this industry, and we really enjoyed it.”
Ehmann cites three “crucial decision points” in the company’s 20-year history. The first was in 2008 when his brother, Bill Ehmann, joined Profile Films and together they decided to make a “very concerted effort” to grow, invest and “find the best people.” The second came in 2011 when Ehmann bought out his three original financial partners.
The last piece — the decision to focus on producing food-safe plastics — would position the company for the growth it’s experiencing today.
“We recognized the importance of food safety,” Ehmann said. “We were ahead of the curve on that one for sure.”
Now, 65 percent of the company’s business is in food-related packaging.
“The food people understand our value proposition,” he said. “It’s not as commodity oriented as some of the other products that are normal for our industry. We gravitated toward the food industry, and they gravitated toward us over a long period of time.”
In 2015, Profile Films completed a $26 million expansion project that resulted in a move to a “purpose-built” food-safe production facility in Walker, doubling the company’s operational space.
“That’s when they did this hockey stick thing that everyone likes to see,” Jason Brinks, managing partner of Oxford Financial Group Ltd. and a board member of ACG, said during the Outstanding Growth Award ceremony.
Profile Film’s focus on food-safe plastics and the added capacity facilitated the company’s growth and business model it operates today.
“We knew that it was important to not only have a food-safe facility but also we knew we needed space,” Ehmann said. “We had bumped into our max capacity at our old location. On top of that, we really wanted to create a nice environment for people to work in.”
According to Ehmann, the new facility allowed the company to switch from being “selective” about orders to “aggressive” about sales.
“When we got to the new building and we were set free to grow, we leveraged a lot of relationships that we had been developing over the years,” he said. “We put ourselves in a position where we work with larger companies that like working with us because we’re privately owned and operated and we’re big enough to handle it.”
Ehmann says he’s committed to keeping Profile Films under private, local ownership, which he thinks sets the company apart in an industry that has seen many film producers get acquired by private equity firms or larger producers.
“Our mentality isn’t to see how much money we can make,” he said. “Our mentality is to be the best manufacturing company that we can be in our industry.”
Made in Michigan is supported by the Michigan Economic Development Corporation, offering a comprehensive suite of programs and services to support your company needs for continued growth. Visit michiganbusiness.org/pure-partnership for information. This sponsorship is advertising. It has no effect on editorial consideration in MiBiz.