Seat-of-pants decision spreads firm's success

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Brothers Carl and Daven Claerbout use their father's guiding principles to run Dutchland Plastics Corp., a rotational and blow molder in tiny Oostburg, north of Milwaukee.

They don't favor trendy phrases like ``employee empowerment'' at this family-owned company. Instead, the Claerbouts follow a simple rule: treat employees like equals, all the way down to the temporary help.

Running a rotomolding machine is physically demanding work bolting and unbolting the molds, pulling out the heavy parts, working around big industrial ovens. It takes brawn, but also brains. If it's raining, or even just on a humid summer day, operators must know how to adjust the machine to keep turning out quality parts.

``Nobody works for us,'' said Carl, company president. ``Our dad taught us. That was one of our first lessons: `Boys, nobody will ever work for you; they'll work with you. And that's how you'll be successful.' ''

That advice paid off when the rotomolding company got into extrusion blow molding about 15 years ago what the brothers describe as a seat-of-the-pants decision to expand into a brand-new technology.

``We pretty much taught ourselves about blow molding,'' said Daven, sales director.

They both credit the men and women of Dutchland Plastics with making it happen.

``We knew we had good employees, and we thought, they're going to figure it out,'' Carl said. ``So we spent the money. We didn't have an order in the house. We didn't have a promise from a customer'' to buy the blow molded output.

Moving into industrial blow molding was a risk. Rotational molding had been the focus since their parents, Bill and Nancy Claerbout, took over a troubled plastics factory in nearby Jackson, Wis., in 1967. Bill Claerbout had a business in real estate and was a well-known auctioneer.

When Heller Industries, which leased from the Claerbouts, was about to go under, Bill and Nancy decided to take on the rotomolding operation. Bill had recently sold off a local farm, and he picked the farmer as his first plant manager after the employees agreed.

Two years ago, Carl and Daven bought the remaining shares from their parents. They became 50-50 owners.

Carl and Daven Claerbout are prone to crack corny jokes, like the unofficial motto of Oostburg, founded in the 1840s by Dutch immigrants: ``It ain't much, if it ain't Dutch!''

They have contrasting styles. Carl, 52, is soft-spoken. Daven, the more charismatic one who runs sales, is 50. Both men talk with a flat Midwestern cadence, salted with a Milwaukee accent.

The brothers said they get along but the decision in the mid-1990s to get into blow molding caused friction, they recalled during a July 22 interview in Oostburg.

In the recession in the early 1990s, the company had gone through several lean years when Carl talked to his father about blow molding.

``He agreed that we should. And I think we were pretty much alone in that thought,'' Carl said. Questions came up. Blow molding machines were expensive.

Daven had doubts about what he calls ``pretty much a leap of faith.'' He even wrote a letter to his brother and their dad, after Dutchland already had started blow molding, urging them to get out of it.

Carl admits it was a stretch: ``We did not have a person that knew blow molding. But we felt, let's get into it and we'll gain business over time.''

And their faith won out. Their employees, steeped in rotomolding, did pick up blow molding. More recently, the Claerbouts beefed up their blow molding talent by hiring some people made available when Western Industries Inc. closed its blow molding factory in Chilton, Wis., in late 2006.

Today Dutchland Plastics runs 10 extrusion blow molding machines, including Milacrons, Sterlings, a Graham and a Kautex, with shot sizes of 5-50 pounds.

In rotomolding, Dutchland tied for 24th place on the Plastics News ranking of North American players, with $22 million in roto-related sales. The company runs 14 rotomolding machines: 13 Ferry carousel machines and its newest, a Roto-Tech rock `n' roll machine to mold kayaks.

Dutchland has a urethane foam filling department. The company routes and trims parts using two Ferry Quintax routers and two articulating robots.

Rotomolding markets include lawn and garden, tanks, consumer products, recreational/ sporting goods, medical furniture and refuse containers.

Officials expect companywide sales to reach $31 million this year. Dutchland employs about 300 at two factories in Oostburg, making it the largest employer in the village of 3,000. The original Oostburg building, which houses most of the rotomolding machines, measures 150,000 square feet.

In 2003, Dutchland built a second, 80,000-square-foot factory, as a center for blow molding. An addition two years ago more than doubled that plant's size to 165,000 square feet.

The company is ISO 9001:2000 certified.

In February of this year, Dutchland opened a 15-employee, one-machine rotomolding plant in Sherrill, N.Y., between Syracuse and Utica, to serve a major customer. Daven Claerbout said freight costs made it too expensive to ship the parts from Wisconsin to the customer, which he declined to identify.

The high price to truck large, hollow parts around the country is one factor that has fueled a trend of mergers and acquisitions among rotomolders, which tend to be regional. Some molders move their plants to follow key accounts, or even open a rotomolding plant within a customer's plant, Daven said.

The owners have looked at both strategies. But so far, getting into blow molding was the biggest change in operations.

Offering blow molding and rotational molding together at one company has helped retain business. As volumes for a product grow higher, a customer might need only a single tool to blow mold a part every two or three minutes, instead of, say, a 20- or 30-minute cycle for rotomolding. Plus, Dutchland can assemble the finished product and ship it to the end customer, even sourcing injection molded and metal components.

``We're finding more and more companies want to use the outside manufacturers to take it from start to finish, and we do a lot of that,'' Carl Claerbout said.

Some products use both processes. The Association of Rotational Molders International gave Dutchland a Product of the Year award in 2005 for a cleaning cart it makes for Johnson-Diversey Inc. of Sturtevant, Wis. The cart was made using rotomolding and blow molding.

During a recent tour, employees were making components for grass collection for a riding lawn mower. The large container is rotomolded, while the chute is extrusion blow molded. Parts are finished at the press and on a Quintax router.

Though much of rotomolding is resistant to competition from imports, the global economy hit bucolic Oostburg when Dutchland lost its original business: forms for small statues and promotional items. The company rotomolded the forms from liquid PVC plastisol, making a flexible mold that Dutchland then shipped to a customer that filled them with a combination of cement and urethane foam. Workers then decorated the statues.

Statues using the PVC skin netted the rotomolder several ARM awards. But the work moved to Mexico, then on to China.

PVC plastisol molding was Dutchland's original business as boys, the Claerbouts trimmed countless little PVC brains used in models to teach human anatomy. But by the time the business left the United States in the 1990s, it only accounted for about 20 percent of total sales.

Dutchland is active in the ARM trade association. Daven currently is vice president of ARM. At the upcoming Rotoplas'08 conference, set for Oct. 22-23 in Chicago, he will start his second stint as president. He also has served as secretary-treasurer.

Rotational molding has too low of a profile, Daven said. ``We're trying to make people more aware of rotomolding, and we're also at the same time trying to help our peers and our suppliers become better manufacturers,'' he said.

Rotoplas will focus on technology and materials. But people still are the key to rotomolding, the brothers said. Dutchland's motto, printed on business cards and promotional material, is ``Quality rotational and blow molded products ... by dedicated employees ... since 1967.''

And for Dutchland Plastics, ethics and morals count for a lot.

The brothers have a lot of business books, but always get back to the simple things picked up from their father. ``We continue with those core values. As culture changes, you have to adapt a little bit, but you don't lose the core values,'' Daven said.