Diversification is Key in Manufacturing Sector

first_img Stay Connected with the Daily Roundup. Sign up for our newsletter and get the best of the Beacon delivered every day to your inbox. In a business community hit hard by the recession, several local manufacturing companies are seeing diversification and expansion efforts pay off. Officials from Applied Materials Inc., Plum Creek Timber Co. and Sonju Industrial Inc. spoke at the annual Montana West Economic Development meeting on Oct. 21, highlighting both positive news and challenges facing many businesses in the Flathead.Applied Materials Inc.Larry Murphy, corporate vice president for Applied Materials, told the crowd he was pleased with the progress the company’s Flathead and Libby branches have made since Applied purchased Semitool, Inc. last December.Semitool wanted to ensure that the company that bought it would maintain a Flathead workforce, Murphy said, and Applied Materals was the only one to offer to do so.So far, the relationship has been fruitful. In the past year, the Semitool branch of Applied Materials raked in $250 million in sales, and is projected to hit $300 million next year. The previous record was around $240 million, Murphy said. “We’re actually going off the charts,” Murphy told the MWED crowd. “We’ve added about 200 heads, 200 employees, since the acquisition.”The Birch Grove facility in Kalispell has about 140 employees, and the Libby branch has about 30, Murphy said. There are currently 40 openings waiting to be filled, he added.Applied Materials owes its growth and success to the ever-expanding need for semiconductors and the vast computer chip market, Murphy said. The company manufactures equipment used to make microchips. Electronics are using more computer chips than ever – especially in smart phones and products like Apple’s iPad – and the markets are steadily increasing across the globe.While Americans increase smart phone usage by a rate of 34 percent each year, Murphy said demand in China has exploded by 1,000 percent in the past four years. In Asia, where many areas lack landlines, cell phones have become a necessity.“It’s a necessary item for all of us now,” Murphy said. “That’s what’s driving the growth for Semitool and Applied Materials.”Plum Creek Timber Co.At Plum Creek, manufacturing value-added products has become their bread and butter, said Vice President of Northwest Resources and Manufacturing Tom Ray. “Diversifying – it’s how we’re surviving,” Ray said. Plum Creek, along with many timber companies, was hit especially hard when the housing boom busted in 2008, Ray said. The company had to adjust to a market supported by just 500,000 housing starts a year, when previous years had an average of 2 million starts. To stay afloat, the company is almost entirely tied to high-value niche products rather than traditional building materials, Ray said, and the new products are increasing company sales over last year’s levels.Plywood manufacturing plants, such as the two located in the Flathead, are producing plywood sheets with medium-density fiberboard on the outside, which Ray described as a quality structural product with smooth surfaces. It is used in school furniture and cabinetry. Plum Creek is also producing plywood sideboard with exterior grade quality that can be used in highway signs or on the back doors of delivery trucks, Ray said. The company is exporting this material to Mexico as well, he added.Another new product to hit the market is plywood with camouflage siding for hunters, Ray said. These strategic product changes have allowed Plum Creek to maintain operations, Ray said. “Plum Creek is here, we’re surviving and we’re going to be here for a long time,” he said.Sonju Industrial Inc.At Sonju Industrial, business development director Jon Sonju said its key to success is pursuing excellence within the organization, from the employees up.“I don’t even want my employees to be good, they need to be great,” Sonju said.In a business that manufactures products for the defense and aerospace sectors, such as the fins that go on a series of missiles, Sonju said maintaining quality is imperative. With all the challenges facing small businesses these days, such as cash flow, sales and inventory, Sonju said businesses need to be leaders in new ideas and technology or risk being left behind.“I think the answer is I’ve got to run faster than my competition,” Sonju said. “That’s the only answer.”Though it is tough to run a business in the Flathead right now, Sonju said he believes there is a light at the end of the tunnel.“Even in some of this economic turmoil, I think we can still push forward,” Sonju said.Murphy was also optimistic, noting that maintaining a strong business community is integral to the growth of every company.“Economic development is near and dear to all of our hearts and for Semitool-Applied to be successful we all have to be successful together,” Murphy said. Emaillast_img read more