DAC Inc., a nonprofit group in Maquoketa, Iowa, that provides jobs and housing for people with disabilities, has acquired 13 injection presses and a proprietary nylon product line from ITW Fastex. The sale creates a new company, ADAC Plastics Inc., which harbors hopes of growing into a full-fledged custom molder in the next couple of years.
Unable to find a buyer for its Maquoketa injection molding operation, Fastex planned to shut it down, said John Marszalek, the firm's controller.
That's when DAC stepped in. The company had a lot to lose: 25 DAC employees, under subcontract, were assembling Fastex products at DAC's vocational building, located only a block away, said Ben Wright, DAC executive director.
As well, 25 Fastex jobs were on the line, according to Maquoketa plant manager Larry Zickel. Zickel moved from Chicago nine years ago to help Fastex, an Illinois Tool Works Inc. division based in Des Plaines, Ill., start up the Maquo-keta plant. It was Zickel who approached DAC's board of directors with the idea to buy the business, he said.
``I had a lot to win or lose also,'' said Zickel, who has settled fondly into small-town Maquoketa.
Fastex is helping DAC finance the deal, Marszalek said, though he would not disclose terms. It was final June 28.
``We could not have done this without assistance from ITW. They were willing to work out a financial package and they're carrying the weight,'' Wright said.
For Fastex, the sale is a way to keep employment in Maquoketa, Marszalek said.
The ITW unit now has only one plant, in Des Plaines, where it employs 135. He would not disclose sales.
For DAC, owning a for-profit business is a new means of fulfilling its mission statement: to generate jobs for disabled people, mainly those with mental illness or mental retardation, said Wright.
ADAC already employs several former DAC clients, he said.
``We hope to increase the number of people with disabilities working at that plant. That's why we bought it,'' he said.
ADAC will keep the molding operation at the leased, 20,000-square-foot plant.
In the purchase, it acquired rights and customers for the plant's main product, an adjust-able nylon 6/6 knob used on weight-lifting machines, office chairs, car seats and other items. Zickel put last year's knob sales at about $1 million.
Fastex wanted to unload the Maquoketa operation mainly because the knobs fell outside its niche, Marszalek said. The firm inherited the knob, which is insert molded, in 1993 from another ITW division in Haw-thorne, Calif., according to Zickel. At the time Fastex hoped to parlay the new insert molding capabilities into parts for large appliances, or white goods -its biggest market, Zickel said.
``We made a go at it for several years ... but it just didn't fit into our business,'' Marszalek said.
Fastex's business comprises direct sales of mostly plastic, and some metal, fasteners and assemblies for large appliances; as well as fasteners for other markets, including electronics, computers and automotive, which the firm sells through distributors.
At Maquoketa, ADAC will continue to mold three Fastex products: a glass-filled nylon oil drain valve for small-engine appliances such as rototillers and lawn mowers; a nylon fitting for screen doors; and a nylon clip used for inserting window grilles.
``We'll be buying the parts from them, just like an outside supplier,'' Marszalek said.
He said Fastex was pleased with DAC's past subcontract work, and will outsource the parts with ADAC as long as the quality is good and the price is right.
For the next year, ADAC's 13 presses - a mix of Arburg, Nissei and Cincinnati Milacron models with clamping forces of 35-150 tons - will be busy molding its proprietary knobs and the custom parts for Fastex. But in a year's time, the company hopes to grow beyond those limits, by bringing on a marketing person to drum up more custom molding work, Wright said.
He sees the Maquoketa location as ideal for doing business, he said.
At its Maquoketa vocational center, based in the same industrial park as ADAC's plant, DAC also operates a recycling program that collects various materials for Jackson County, Iowa. Wright said ADAC hopes at some point to use some of the collected plastic in a new product.