Coast Converters Inc. is moving its headquarters and extrusion, printing and conversion operations to Nevada from Southern California. And the company's owner is footing the bill to bring many employees along for the ride.
California's troublesome business climate drove the decision, said owner and Chairman Mitchell Greif.
Los Angeles-based Coast is buying a used line in North Las Vegas and, by July, will relocate 11 extrusion lines and other equipment 277 miles to the facility.
Many of Coast's 150-160 employees - including all supervisors - have committed to follow the business, Greif said in an office interview. Greif plans to provide down payments or closing costs for financially eligible employees buying homes in Nevada.
About 20 employees will remain to staff a Los Angeles-area sales and customer service office and a regional warehouse. Coast will hold regular videoconferences between the sites.
Coast extrudes polyethylene film in low, medium and high densities and blown polypropylene film and can print in eight colors. Sales totaled $20.5 million for the fiscal year ended March 31.
The firm signed a letter of intent Feb. 28 to acquire assets of the now-closed extrusion operation. Terms were not disclosed. The building formerly housed Mexico Plastics Co., a satellite operation of Continental Products Inc. of Mexico, Mo., according to North Las Vegas city records. The plant closed in November.
Coast may interview some people who formerly worked at the plant, said Mike Majewski, North Las Vegas economic development manager.
The assets include a Davis-Standard Corp. 41/2-inch, single-layer, blown-film extrusion line and a Gloucester Engineering Co. dual-turret winder, both for webs up to 104 inches wide. The 4-year-old equipment including treaters and blenders, and a bubble stabilization system can make up to 8 million pounds of PE film per year.
Coast intends to occupy 99,000 square feet with areas for extrusion, printing-converting and warehousing. Operating Engineers Funds Inc. owns the building, which adjoins a rail siding. Coast has 70,000 square feet in Los Angeles.
The site is ready for an extrusion and converting operation, with amenities including necessary electrical service, cupola, 50-foot-high water tower, air lines, compressors, exhaust system, grinder, repelletizer, overhead hoists and four resin silos.
``Those improvements will save hundreds of thousands of dollars that would have been required in a shell building,'' Greif said.
In California, Coast has struggled to cope with rates for workers' compensation, insurance, utilities and payment of structured employee overtime.
``The environment is not manufacturing-friendly,'' said William Kauble, Coast president and chief executive officer since September 2000.
``Our governor and our mayors - both of them - have abandoned us,'' Greif said. Representatives of then-Mayor Richard Reardon on several occasions and current Mayor James Hahn in October visited Coast and promised to explore economic incentives but ``never came back'' with proposals, Greif said. The city did not respond to requests for comment.
The not-for-profit Nevada Development Authority said 36 firms, including 12 from California, have migrated to its southern Nevada market from July through February.
``We are getting huge numbers of inquiries ... from California companies,'' said A. Somer Hollingsworth, the authority's president and CEO. For the fiscal year ended June 30, the authority attracted 50 companies, including 13 from California.
Nevada does not tax corporate or personal income, and power rates are dramatically lower than those at municipality- or investor-owned utilities in California, Hollingsworth said.
Members of the Silverman, Abeson and Schor families founded Coast Converters in March 1964.
Greif entered the industry in 1979, joined Coast in 1986 as national sales manager and bought controlling interest in 1994. He started thinking about a move in 2000.
Coast pared down debt and opted to tweak existing equipment rather than buy the latest technology. ``We owe millions less than five years ago,'' Greif said.
Over two years, Coast has achieved 15-20 percent gains in poundage production and scrap reduction, Kauble said.
Beginning in July, the management team including Chief Financial Officer Tom Shuart and Vice Presidents Roger Lampert and Sol Schor, a Coast cofounder, methodically looked at site options.
Initially the search was confined to the home region, but ``until getting out of California, there were no benefits,'' Greif said. ``We found options in the Las Vegas area.''
Coast is encouraging employees to move with the company.
The company has organized weekend bus trips to Nevada, March 15-16 and 22-23 for workers and spouses. City, school, real estate, apartment, insurance, day care and financial contacts are making presentations.
Camden Property Trust of Henderson, Nev., will provide certain rental benefits to Coast workers under a preferred employer program.
Greif, 44, plans to celebrate Coast's 40th year in business with plant events during the Packaging Machinery Manufacturers Institute's Pack Expo, set for Oct. 13-15 in Las Vegas.
