Hedstrom moves into former Wal-Mart building

ASHLAND, OHIO (Nov. 20, 11:05 a.m. ET) -- Hedstrom Plastics has found a use for a closed-down Wal-Mart in Ashland, Ohio: A new rotational molding factory.

Economic development officials in Ashland have struggled to find a business to fill a vacant Wal-Mart store, which closed when a new Wal-Mart Supercenter opened in 2006 across town near I-71.

Over the next six months, the molding plant will move into the former Wal-Mart, according to Hedstrom Plastics President Jim Braeunig.

Hedstrom also is moving its headquarters into a smaller, vacant JCPenney store. Wal-Mart and Penney anchored the retail strip mall, which is largely empty, said Evan Scurti, director of the Ashland Area Council for Economic Development. Before Hedstrom, a long-time local manufacturer that employs about 100, came calling, local officials had tried to attract a call center or market the space for offices, he said.

“This is a great example of what a strong local industrial base and entrepreneurial thinkers can do for a community,” Scurti said. “It was a very tough sell, very hard to recruit [retail] tenants when everything’s moving on the other side of town. [Hedstrom] had a vision and made it happen.”

Hedstrom made the announcement on Nov. 18.

Empty retail can make good manufacturing space, Braeunig said. “The commercial real estate market is so depressed, especially in an idle or abandoned retail complex. You can get a lot of square footage for some very reasonable, attractive prices.”

The company currently occupies three buildings in Ashland: an 85,000-square-foot factory with 12 rotomolding machines, a warehouse and a sales and marketing office. “We’ll be essentially consolidating all those facilities into the new manufacturing facility or the corporate office area,” Braeunig said.

Hedstrom will invest about $1 million in the former Wal-Mart, to build a high-bay area of about 15,000 square feet to accommodate the larger rotomolding machines, reconfigure electric lines and add lines for natural gas and compressed air. “There’s quite a bit to build out,” he said.

But even of company officials had decided to stay put, they would have needed to sink around $500,000 into the existing factory to fix the roof and bring in more electric power and gas, he said.

The former Wal-Mart has 129,000 square feet of manufacturing space. The old Penney store measures 22,500 square feet.

Hedstrom made news in August when it bought another rotomolder, Diamond Plastics Inc, an eight-machine operation. Hedstrom will continue to run that factory in Dunkirk, Ohio, Braeunig said.

Meanwhile, in anticipation of its move to the retail space, Hedstrom bought five rotomolding machines at an auction at the shuttered Ameri-Kart plant in Fostoria, Ohio. Braeunig said Hedstrom will rebuild two of them and install them at the new building. That will help ease the transition. The company also will run both Ashland plants for awhile.

“There is going to be absolutely no impact on our customers because of the proactive purchases and rebuilding that we have done,” Braeunig said. “We’ll have additional machines in that new facility that we don’t have today, to facilitate the transfer. We also have Diamond, if there would be any shortfalls of any kind. But we don’t anticipate any.”

Buying Diamond Plastics helped Hedstrom diversify into new markets and customers. Now Braeunig said the company is looking for another acquisition, in toys. Hedstrom is a major rotomolder of vinyl play balls at a joint venture plant in China, while Ashland focuses on industrial molding and a growing line of marine products.

Balls are sold in the spring and summer. Braeunig said the company needs some toys to round out the third and fourth quarter, including the important Christmas season.

“We’re looking strategically to shore up our toy business,” he said.

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