Chelsea Building Products is growing with the home construction market by adding new equipment — and next year 20 more employees — to keep up with demand for its vinyl and composite profiles for windows and doors.
The 38-year-old company is spending $1.5 million on high-capacity extruders and will make other downstream improvements with stands, pullers and drop tables at its production facility in Oakmont, Penn., according to Gary Hartman, Chelsea's director of marketing and new business development.
"We squeezed as much capacity out of the existing equipment as we possibly could through efficiency improvements but our business performance has far exceeded what we could do internally so we need to make these investments," Hartman said in a phone interview.
Chelsea is acquiring extruders on the open market from companies that have gone out of business or have excess capacity, as well as buying new equipment.
The investment will increase Chelsea's lineal extrusion production capacity by 20 percent, according to President and CEO Peter Dewil.
"As the demand for energy-efficient PVC-based building materials continues to grow, our business continues to expand to meet the demands of the market," Dewil said in a statement.
Chelsea is an integrated manufacturer providing product design, material development, extrusion tooling technology and finished product to manufacturers and distributors throughout North America. Acquired in 2011 by Graham Partners Inc., a private equity firm, the company's growth is being driven by the new home construction and specialty products segments, Hartman said.
In addition to window and door profiles, Chelsea produces composite profiles for reinforcing window and door systems. The company also makes profiles for commercial flooring, architectural shutters, composite siding and PVC moldings.
"We've worked very hard to diversify the product portfolio over the last 7-8 years," Hartman said.
Chelsea's shutter customer turned to the company for a synthetic solution that would not only make his redwood and cedar products more resistant to weather and rot but could be fabricated with his existing equipment.
"We came up with a custom formulation specifically for his application," Hartman said.
"It's a PVC base but we mixed in other components to create a PVC alloy that meets his requirements."
Chelsea-made compounds are used in-house and made available to other extruders in powder and pellet form. Hartman likens PVC to the versatile Betty Crocker baking mix, Bisquick.
"You can alter to whatever it is that you need to bake," he said. "We customize the Bisquick depending on whether the application is siding or window and door profiles or shutters. We design the product, the tooling and material system to meet the customer's specific requirements. We're niching out the marketplace."
Chelsea went into hiring mode this year and has about 200 employees, with 40 in support positions and 160 in operations. The company plans to bring on 20 more employees in 2014 as it implements the second phase of a two-year plan to streamline then expand.
A year ago, Chelsea put money into its tooling department in a move that doubled its ability to design and fabricate tools for various material systems and profiles. Now the company is awaiting delivery of its new equipment in the first quarter of 2014.
"In addition to increased capacity, the new extrusion equipment will be more energy efficient, thus producing more products with less consumption of electricity," Lee Furrer, Chelsea's director of manufacturing, said in a statement.
Since 2009, Chelsea has been following the Kaizen continuous improvement philosophy for leaner, more efficient manufacturing. Company officials say the effort increased the existing volume of tool fabrication and extrusion technology by more than 40 percent over the last four years.
"We didn't take on the field of dreams strategy like a lot of the competition did," Hartman said. "We became more efficient, very integrated and niched things out. We do everything from soup to nuts here at Oakmont."