By: David Hutton
March 11, 2013
ROCHESTER, N.Y. -- Ron Ricotta, president and CEO of Century Mold Co. Inc., has 30 years of experience in manufacturing. He has served in his current capacity at Century Mold since he and his partner acquired the business in 2002.
Since then, Century Mold has tripled its sales, grown in profitably and navigated through the recession of 2008-09. Ricotta's previous experience includes serving as president of Nationwide Precision Products, a $70 million machining company. Prior to that, Ricotta was a partner in a certified public accounting firm and spent the majority of his CPA experience consulting manufacturing companies.
Ricotta recently spoke with David Hutton for a Plastics News market report on injection molding, available at www.plasticsnews.com/marketresearch.
Q: Century Mold's primary end market is automotive. How has the company been able to meet the challenges presented amid the recession and the auto industry's struggles in 2008-09?
Ricotta: The areas we have focused on include labor and machine efficiency, automation, material negotiations both with customers and suppliers, better management of receivables and inventory, along with management of other key balance sheet and operating metrics.
Q: In January 2012, Century Mold announced plans for expansions in Tennessee and Mexico. What is the status of those expansions and how are they enhancing your position in a competitive market?
Ricotta: Our new plant is completed in Querétaro, Mexico; new machines are being installed, staff is beginning to be hired, and production is set to begin in January. This 100,000-square-foot facility will ultimately have 50 injection molding machines. The Tennessee expansion will be in 2013. In the interim, we have rented additional space. We have already hired an additional 50 people in Tennessee.
Q: What kind of changes have you seen in the industry as a result of your customers or suppliers becoming leaner? Is Century Mold taking on more responsibilities that customers or suppliers used to handle? If so, what are some examples?
Ricotta: We are definitely seeing our customers being leaner. As a result of this, we are doing more and more upfront engineering and design. Further, many of our customers are capital equipment constrained. They are also having some lingering supplier problems. Our ability to buy modern equipment quickly due to our financial strength and launch or transfer programs effectively and quickly has been an asset to us.
Q: One of the biggest challenges companies have faced has been the loss of manufacturing jobs overseas to China and other Asian nations. Today, reshoring and near-shoring are popular trends as the gap closes between the cost of manufacturing in China and the United States. Do you feel that this is a business opportunity for injection molders?
Ricotta: Absolutely. With direct labor becoming a smaller and smaller portion of the part cost, with transportation costs rising, with communication issues, with currency risk issues, with quality and availability of raw materials issues, with inflation in China, North America is much more attractive than a decade ago.
Q: While there may be fewer injection molders than there were five or 10 years ago, it seems that competition is always heating up. How can companies position themselves and grab a competitive edge in today's market?
Ricotta: I don't think it's complicated; it is just not always easy. The normal blocking and tackling areas like quality, delivery and cost are always important. One thing I think that can be overlooked is the power of good, timely financial information. Knowing your costs and constantly measuring your company's key operating metrics are key to survival and ultimately being a successful company. Further, analysis of what things your company is good at and what things it is not can help focus on a profitable niche. Most companies are not large enough to do a multiple of things well. Uncomplicating your company many times can make a business more successful.
Q: What impact do you see the growing trends of sustainability and green products having on injection molders? What kinds of steps are you taking in areas of manufacturing environmentally friendly products?
Ricotta: We are a contract manufacturer. As such, we focus on the products our customers are focusing on. In the auto industry metal to plastic conversions and other areas to take weight out of vehicles to reduce gas consumption is something we focus on. Further we are involved in fuel cell development. We are also working in the energy area including meter business that provides energy management for residences and we have produced solar energy parts. Internally we have focuses on a significant recycle/regrind program.
Q: What trends are you seeing in terms of the cost of materials — resins, metals, chemicals — and what impact is this having on business? Do you see an emphasis on lightweighting to reduce packaging/shipping/manufacturing costs among your customers?
Ricotta: We see continued upward pressure on nylon pricing and a more stable polypropylene market as a result of available capacity and increase in demand. We do not have a good read on metal and generally do not worry about metal since all our metal is on transparency agreements. Weight and cost concerns will never disappear in our opinion. Significant volatility in resin pricing will normally always have an adverse effect on us, regardless of agreements with customers and suppliers.
Q: What advances are you seeing in automation? What technology is Century Mold implementing or planning to implement?
Ricotta: Automation and other computer/technical advances are key to improving manufacturing output and being competitive in a global market place. We will continue to heavily invest in these types of technologies to address worker shortage, consistency of quality and cost reductions.