AirBoss to broaden markets with 2 plants

ERJ staff report (R&PN)

Newmarket, Ontario -- AirBoss of America Corp. is branching out on two fronts to expand its product and compound development while making inroads into newer markets.

The rubber compounder and product manufacturer will open two facilities in the next several months: one in Raleigh, N.C., to develop unique compounds and the other in Quebec for product development, primarily for the military, according to President and CEO Robert L. Hagerman.

The Raleigh research and development site will open in June, he said, and the Quebec center, which is under construction, is slated to begin operating in October.

He said both facilities span less than 10,000 square feet. The Raleigh site initially will be staffed with four full-time people, but probably will employ about seven in the future. The Quebec site will have four to six staffers working on product development along with six administrative and sales personnel.

Expanding businesses

AirBoss, which had record sales and earnings in 2010 and in the first quarter of 2011, is making the move in Quebec primarily for joint development of next-generation defense products with various government entities, principally from the US and Canada. It also will work with academic and business affiliates on product development at the center.

Because of the type of intricate goods that will be invented in Quebec, Hagerman figures the development pace will be slower, “about a two- to four-year horizon.”

The launching of the facility is aimed at the accelerated introduction of additional personal protection products-primarily chemical, biological, radiological and nuclear protective gear-as well as maintaining a leadership position with existing offerings in the market, company officials said in the firm's recently released annual report.

Servicing the wire and cable industry, a relatively new market for the company where it's making strong progress, and the need to be closer to the company's growing customer base in the Southeastern US are the prime factors behind AirBoss' plan to launch the compound center in Raleigh, Hagerman said.

The company began servicing its first wire and cable business in October 2009 and added a second significant customer since then. It's currently shipping 400,000 pounds of compound monthly to those operations.

“We develop custom compounds for specific products together with these customers, and in some cases by leveraging our technical expertise we have fixed some long-standing issues such as flammability versus spec that had plagued those accounts for years,” according to Hagerman.

He said the Southeastern US is a target-rich area for AirBoss. Currently it does business with several major customers in the region.

Because of the need by customers for quick turnarounds on custom compounds, “we'll have a two- to four-week horizon in Raleigh,” he said.

Record year, quarter

AirBoss' decision to expand its product and compound development operations partially stems from a strong financial performance in 2010 and in 2011's first quarter.

“Both engines were working at the same time à with both defense and compounding doing well last year and in the first quarter,” Hagerman said.

Sales in the first period rose to a record $70.2 million, up 37 percent from revenues in 2010's first quarter.

Net income shot up to $4.3 million, a 53-percent improvement over the $2.8 million recorded last year, the company reported.

The company attributed a good portion of the gain to the improved performance of its rubber compounding business, with volumes rising 53 percent over last year's totals. The increases were recorded in all sectors served by the firm, including tyre, automotive and belting.

Currently, Hagerman said, “we're operating at 85 percent of capacity,” which is about 250 million pounds of rubber annually. “A lot of what we do ends up in a mine somewhere,” he said, referring to products such as conveyor belts and truck liners.

Toll mixing for major tyre makers accounted for about 20 percent of the firm's overall compounding volumes, he said, and sales of rubber compound are expected to remain strong for the next quarter and beyond.

On the defense side of its business, AirBoss continued to be a strong, profitable operation. Existing orders from the US Department of Defense for CBRN gloves and boots will maintain sales at a high level until the end of September, the company said in its first-quarter report.

Orders beyond that are uncertain, it said, and remain dependent on government funding. Because of that, AirBoss said it is concentrating on orders from other countries and anticipates garnering contracts from new customers in the near future, pending finalising financial arrangements.

From Rubber & Plastics News (A Crain publication)

www.airbossofamerica.com/