Jim Benton and John McCutcheon, co-owners of PolyTech Plastic Molding in Prairie Grove, say they are living the dream since purchasing the plastic injection molding facility in mid 2012. It didn’t hurt that soon after they bought the business Bentonville-based Walmart Stores announced an “onshoring” initiative to buy more U.S.-made goods.
This duo projects their little enterprise to do $20 million in sales by 2020, maybe before, given the growth expected in part from Walmart’s U.S. manufacturing jobs program.
The long-time business tandem was schooled in manufacturing during more than a decade of work together at Pace Industries in Fayetteville — an aluminum die casting maker — where they worked in sales. They heard the PolyTech plant was for sale so on a slow afternoon they made the drive over to Prairie Grove to check out the possibilities.
It was love at first sight, according to McCutcheon, who said they could not believe how pristine and profitable this off-the-beaten-path plant was, securely tucked away in Prairie Grove’s modest industrial park.
“Former owner John Booth ran this company very well but he was ready to retire and agreed to sell it to us, financing the deal himself with the help of First Security Bank,” Benton said.
The small business was valued at roughly $7 million by an interested private equity firm, shortly before Benton and McCutcheon cut their deal which allowed Booth to keep the ownership local.
“When we purchased this plant it was only running at 30 percent capacity and still profitable, which is unheard of in manufacturing. We knew there was a lot of opportunity to grow this business right away,” McCutcheon said.
Within three months of their purchasing the plant, Walmart announced its U.S. manufacturing initiative which took the partners by complete surprise. In their first year of ownership the plant did $5.4 million in sales.
McCutcheon said within a month of Walmart’s announcement his phone began to ring almost daily from suppliers looking for ways to onshore plastics manufacturing from China.
“It’s been incredible. The business we have attracted related to the Walmart push and we’re just getting started. We knew we could fill this plant up when we bought it, but it’s happening much faster than we first believed because of the Walmart suppliers who want to make products in the U.S again,” said Benton.
“Thank you Walmart,” McCutcheon said in all sincerity.
The 76,000 square-foot plant employs 46 people with 18 die casting machines and more than 300 dies. The company makes the dies in their tool shop that also provides maintenance for other local plastic molding facilities such as Clack and Preferred Line Products of Rogers who also contract with PolyTech for custom and difficult jobs.
“We have our own tool and die shop and prior to us purchasing the company about 55 percent of the company revenue came from maintenance and diagnostics services for other local shops,” Benton said.
Plant Manager Gaylene Deere is in the process of screening applications for a few more jobs (less than 10) that will be filled in the fourth quarter when production ramps up. The plant now runs six to seven days a week around the clock, and is at about 50 percent capacity.
Last year the company did $6 million in annual sales and is on pace to exceed $7 million this year, with a strong fourth quarter push, directly related to products that will end on Walmart shelves. One aspect that Benton said sets PolyTech apart from other custom plastics operations is the $1.4 million of inventory kept on hand for their customers at all times.
“When our customers want it they can have it right away. Most orders can be filled from the store room and then work to restock our storeroom. There is a cost in carrying inventory but it’s an invaluable service to our customers and they appreciate it,” Benton said.
This has been a real benefit to Walmart suppliers who experts say typically needed nine months or more of lead production time when sourcing their products from China.
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