BUFFALO GROVE, ILL. — Courtesy Corp. started with toolmakers Walter Kreiseder and Gerald Sommers, $3,000 between them, and a mold-making shop in Kreiseder's garage in suburban Chicago in 1972.
Today, the firm has grown to about $200 million in sales, more than 1,300 workers and three glass-shrouded buildings in Buffalo Grove that look more like insurance offices than an injection molding house.
That growth has come from specializing in high-cavitation, high-volume work and jobs that require some precise engineering, like a six-year project to mold and assemble a new kind of inhaler that must pass strict Food and Drug Administration regulations.
Courtesy has reached 20 percent annual growth in recent years from pursuing a strategy very different than the mantra cited by its competitors, who say the way to grow is to put your company's money into building lots of smaller factories very close to your chief customers.
But now Courtesy is shifting its strategy, embarking on a plan to grow through acquisitions and expand beyond its Illinois base.
The firm has been named Plastics News' 1998 Processor of the Year. It will accept the award Oct. 7 during Plastics USA in Chicago.
Guiding it all seems to be a fervent — almost religious — belief that it can shape plastic resin into bottle caps, syringes and anesthesia manifolds better than anyone else.
``We are the Mayo Clinic of the tooling and molding world,'' said Sommers, president and chief operating officer. ``If you want to come to the best, healthwise, you go to Mayo. Tooling and moldingwise, you come to Courtesy.''
When asked if they've ever had to eat those words, Kreiseder, the chairman and chief executive officer, jumps in: ``No, it's other way around. We get a lot of molds where people have constructed them and they don't understand the complexity. ... We are constantly fixing other people's mistakes.''
It was the ability to push barriers that led medical-device maker Schering Plough Corp. to chose Courtesy to make a new inhaler, a complex project that would meet with extensive FDA scrutiny.
Schering looked at 12 molders around the world and settled on Courtesy and one other U.S. firm to begin work in competition developing the dry-powder inhaler, said Len Bednarksi, project tooling engineer with Schering. Courtesy won that contest, he said.
Both Schering and Courtesy said the inhaler must dispense medicine at least as well as old-style inhalers, including in very precise doses. And it required molding and assembling 14 different parts together very tightly.
Six years in development, the project is ready for FDA testing and is up for a DuPont Award for Innovation next month.
``Other molders have extensive engineering staffs with walls papered with degrees,'' Bednarski said. ``Courtesy's strength is very practical.''
Kreiseder and Sommers both credit their mold-making background with making them much better molders. They say it helped them develop an understanding of how to build good molds and run them well.
While molding now is 85 percent of their business, the pair got into molding almost as an afterthought in 1978, when a client came to them with a rush job.
Its only mold had broken and it needed a new one as quickly as possible, Kreiseder said. Courtesy made the mold and tested it in Courtesy's single sample press. It made 150,000 pieces, and told the customer about the day's work.
``There was a big silence on the other end,'' he said. ``They said, `It can't be. The best we've ever had was 35,000 pieces a day.'''
The company brought out six engineers to check the work, and decided to give the contract to Courtesy, he said.
``They said, `We don't know what you're doing, but could you leave that mold in the press a little longer?''' Kreiseder said. ``We did — for seven years.''
The previous molder simply had not taken care of the mold, was not using it well and had shut off several of the cavities, killing productivity, he said.
Soon, Courtesy found itself running 18 presses for the customer, making caps for charcoal lighter-fluid containers, peanut jars and tamper-evident caps.
An engineer with another customer, Continental Sprayers International in St. Peters, Mo., said Courtesy has become the best mold maker in the country.
Harry Auer, tooling and engineering manager with Continental, said its parent company, AFA Holdings in New York, wanted to expand its trigger sprayer manufacturing into Europe. So Auer recommended AFA use a Courtesy mold, but the European division wanted to use German or Swiss mold makers — until it flew representatives to Chicago to tour the Courtesy shop.
``They were very uptight until they saw the plant,'' Auer said. ``After that, they said it was one of the best shops they've ever seen, if not the best.''
While Courtesy may have backed into molding from toolmaking, it has pursued a strategy quite opposite from some of its competitors, including last year's processor of the year, Nypro Inc. in Clinton, Mass. Those firms pour resources into putting plants all over the United States and the world to be near powerful customers like Baxter International Inc. and Abbott Laboratories.
Instead, Courtesy until recently has concentrated all of its production in the northwest suburbs of Chicago, with more than 1 million square feet, seven molding clean rooms and three assembly clean rooms, more than 180 mold makers and 167 presses with clamping forces of 55-715 tons.
``We are at full capacity,'' Kreiseder said. ``When you go by our competitors' plants, some of them have an awful lot of plants ... at 40 percent capacity. The profit margin is very severely affected.''
Courtesy concentrated its factories in one spot until recently. Last month, the firm said it was buying an injection molding plant in Anderson, S.C., a 170,000-square-foot factory that used to be owned by Venture Packaging Inc. Courtesy also is finishing up a 325,000-square-foot addition to its Buffalo Grove campus.
Growth is forcing the firm to a crossroads. Sommers said Courtesy is looking at other acquisitions outside its tightly controlled Illinois base, and expects to double its size within a few years.
``Our big problem is growth,'' Kreiseder said. ``Five hundred to 600 people will be hired here in the next six months.''
Sommers said Courtesy is looking at other molding or mold-making acquisitions, either buying plants or entire companies. He said a location near California would be a possibility, if the right company could be found. They have looked in the past.
``We couldn't find anybody with the quality, to be honest with you,'' Kreiseder said.
He said Courtesy puts at least 95 percent of its profit back into the business, allowing it to have entirely clean room or white room molding and modified injection molding machines from Krauss-Maffei Corp. in Florence, Ky., without pricing itself out of the market.
``I'm not the highest; I'm not the lowest,'' Sommers said. ``But I give the most value.''
The company said it invests heavily in training, and typically has five to 10 apprentices working five-year stretches. The firm also hosts groups of local students to expose them to the plastics industry, and donates money to local organizations such as chambers of commerce.
And it has developed its own proprietary hot-runner system for its high-cavitation molds, which include molds with 288 cavities. The company's Med/Tek division recently was named a preferred supplier to Abbott. Med/Tek is the only plastic injection molder to get the award six straight years.
Lately, Sommers also has spent time complaining to the Illinois Commerce Commission after a pilot, discount-rate electricity program backfired and rates shot up for a day this summer, forcing Courtesy to shut down. The cost spike meant the bill for running each molding machine shot up to $700 an hour, from a typical $8. Sommers felt the ICC should have put a cap on the charges.
But both Sommers and Kreiseder say letters to regulators and local involvement, while important, are secondary. They devote most of their time to the company and its employees. So far, it has paid off nicely.
``We were doing a good job all the time and had more thrown at us because we were able to have results,'' Sommers said. ``People are always looking for results-oriented people and companies.''