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Three years ago, custom molder Plastic Molding Technology, Inc. (PMT) of El Paso, Tex., must have had a crystal ball. Actually, it had an advisory board of players in major end-use markets. Based on regular input from this panel—what CEO Charles A. Sholtis calls a “sanity check”—PMT decided to untie its fortunes from the automotive market and diversify. That proved to be a prescient move.
PMT (pmtinc.com) specializes in complex, precision micromolded parts and assemblies such as gears, overmolded parts, and insert molding. A family-held company founded in 1973, it provides design, engineering, assembly, molding, and moldmaking services. PMT runs more than 1.3 million lb/yr, encompassing roughly 55 engineering resins. Parts are molded to tolerances as tight as ±0.001 in. on a 24/7 basis. End uses range from cars to business equipment, surgical instruments, and circuit breakers.
PMT demonstrates that success in plastics processing these days requires far more than the shoot-and-ship mentality of the old days. “There is no silver bullet,” remarks Sholtis. “Sometimes the little base hits here and there are better than a home run.”
In 2007, PMT saw the handwriting on the wall for the automotive market, which then represented 60% of the molder’s business. It launched a strategic sales initiative to diversify its customer base and landed four significant pieces of business in markets such as electrical and computer/business equipment. PMT is less reliant on the still-struggling automotive market, which now accounts for about one-third of PMT’s sales.
The new business was significant enough to warrant an expansion of the El Paso plant. In December, PMT added 20,000 ft², bringing the facility to a total of 60,000 ft². It spent $400,000 on 12 electric and hydraulic injection machines ranging from 24 to 190 tons, raising the total number of presses to 56. It added robots and a variety of auxiliary equipment, all of which are tied into a production management system from IQMS, Paso Robles, Calif. (iqms.com). And it created 42 new jobs.
That’s no small investment for a single-plant operation with annual sales of more than $12 million. PMT is planning an additional expansion into medical molding in the coming months, which will include construction of a cleanroom. Medical accounts for 5% of PMT’s business volume now, so Sholtis sees room for growth.
The process of diversifying into new markets does not come naturally to most custom molders. Sholtis said it required some “out-of-the-box” thinking on PMT’s part as well. Its advisory board, which includes executives from electronics and medical OEMs, helped open PMT’s eyes to opportunities that it might not otherwise have recognized. “Business owners have a tendency to be myopic,” as Sholtis puts it. “We analyzed new markets and where our products might be a fit. The business of molding is no longer sales for the sake of sales. You need to look not just at volume, but margin.”
Even after expanding its customer base, PMT remains committed to automotive. “The volumes are down, but there is still a need for qualified, stable companies to provide the products that we supply, such as under-the-hood engine components, door-lock mechanisms, interior components, and the like,” says Sholtis.
PMT’s investment in people, capacity, and technology at a time when many others are contracting or closing has positioned it to capitalize on any opportunity. Notes Sholtis: “We feel the worst may be over for the recession and see signs of improved manufacturing activity in 2010. The dollar is also at a historic low, making U.S. goods more attractive to export markets. Inventories have been drawn down to the point where businesses need to rebuild stock. There are still some underlying weaknesses in the economy, but with fewer competitors out there, we will be tenacious in pursuing new opportunities.”