STURGIS, MICH. (June 26, 2:10 p.m. EDT) — Nine months ago, Penguin LLC did not exist.
On Jan. 2, the heat first kicked on at its new factory in the southern Michigan town of Sturgis.
About a month later, on Feb. 6, the industrial blow molder launched production of its first office furniture components. And now the company has added injection molding and is in the midst of its second phase of expansion, adding assembly space, warehousing and metal fabrication operations.
“We've been very lucky with the way a lot of things have gone,” said Rich Gilbert, co-owner of Sturgis-based Penguin. “We found a way to make it happen quickly, and at the same time we've found a way to take advantage of a lull in the economy when we were ready to go.”
With machinery and auxiliary equipment makers experiencing downtime because of reduced orders, Penguin was able to tap into technical experts who were available to help the new company launch its presses and production.
Extensive auctions put good, used presses on the market when the firm was debating whether to expand beyond blow molding, and good, experienced people were ready to sign on to a new and growing company while other businesses were looking to cut back.
“The willingness of the employees, from management on down, has been a key to all of this,” Bruce Bart, vice president and general manager, said during an April 28 interview at Penguin. “From the start, people were willing to do what needed to be done, whatever it was.
“One Saturday, we had regrind stacked up and we all came in and cut up regrind. There are no real egos here. Everybody does what they have to do for the benefit of the company.”
During NPE in Chicago, Penguin is getting another burst of recognition as Milacron Inc. features the molder at its booth.
Milacron (Booths S1640, S3006) has taken a new tack for its appearance at this year's event, focusing on end users, rather than shipping its own machines to Chicago.
“Everybody's going to be watching us,” said Gary Harvey, general sales manager for industrial blow molding with Cincinnati-based Milacron. “Everybody's going to be interested to see how this works out.”
With Penguin, Milacron still can show its latest technology, he said. The company will have a computer link-up on the show floor to track production on each Milacron blow molding machine in Sturgis.
“Everything they have is brand new,” Harvey said. “They can really show what's capable with the new systems. This is a company that obviously is doing quite well.”
The firm also has arranged for potential customers to make the two-hour drive to Penguin from Chicago, if they are interested.
Penguin's fate — and its capabilities for a fast launch — is linked to that of its older sister company, Iceberg Enterprises LLC of Glendale Heights, Ill. Entrepreneurs Gilbert and Howard Green formed Iceberg in 2000 to buy Newell Rubbermaid Inc.'s plastics-intensive office furniture business unit.
Iceberg took on the business, tooling, inventory and existing customer base, but had to rely on contract manufacturers to produce the components. As the company looked to expand product offerings and sales, though, contracting for all production simply did not work.
“What it boiled down to is control, cost and predictability,” Gilbert said. “Blow molding is a growing technology, and as capacity levels began to tighten, we were having problems with our lead time and saw our costs going up.”
So last year, Gilbert and Green began laying out plans to create a new company that would have Iceberg as its largest customer, but still retain enough independence to seek outside work. They also hooked up with blow molding industry veterans Bart and Jerry Ray, now vice president of engineering for Penguin, and both with extensive experience in industrial production.
Bart and Ray were able to convince them that the best choice was to create a new business from the ground up, and place it in southwestern Michigan — a region already home to other blow molders.
“We looked at some business opportunities within existing companies,” Bart said. “We looked at different locations. Part of the issue was that, for the size of the equipment we needed, the spec buildings that were available weren't the right size.
“We came to the conclusion that we needed to do a brand-new, start-up operation.”
In September 2002, management of the new Penguin began laying out its plan for an ideal factory, starting with a vacant 26-acre site and a blank sheet of paper.
Officials laid out the ideal location for each press and worked with equipment suppliers as they determined the best system for automated delivery of materials. They set up a separate grinder room to handle scrap — taking the noise and dust of the systems off the factory floor.
The plant infrastructure also allows for expansion as the company grows.
“Organization was the key to a fast start,” Ray said.
At the same time, builders were creating the 44,000-square-foot factory. They broke ground Oct. 3. Once the heat was on at the start of January, management of the new Penguin could see precisely how well their plans actually panned out.
“We'd put stuff down, talk about it in theory, but when the day came that it was all on-line was when we'd see if it would actually work,” Bart said. “That was a happy day.”
Penguin launched with a used 1997 Hartig with dual 20-pound shots. The first two new Milacron machines followed soon after, a T-800 with dual 15-pound heads and the company's largest machine, capable of a 60-pound shot.
Milacron is slated to deliver its first dual 40-pound-shot machine in early July.
The machinery maker was not alone in aiding Penguin with a fast launch, executives said. Universal Dynamics Inc. oversaw the materials-handling system, coordinating a fast and efficient launch. Michigan Plastics Equipment coordinated the purchase of auxiliary and used equipment.
Local officials from the Sturgis economic development group helped push forward zoning changes and infrastructure improvements, while local contractors from Jim Ware Construction worked overtime to create the building.
“Everybody would come in early, they'd stay late, do everything they could to make sure we were up and running,” Bart said.
The first contracts for Penguin centered on Iceberg's needs: desk components, filing cabinets, shelving units and an 8-foot conference table the sister company licensed from Lifetime Products Inc. of Clearfield, Utah.
Further expansions beyond blow molding also considered Iceberg's requirements. Once the office furniture supplier decided to offer systems relying on injection molding, Penguin saw it could pick up some used presses and add capabilities to the operation. The company retrofit three units from Van Dorn — with clamping forces of 260-1,000 tons — and began running them during the spring.
Likewise, the metal fabrication system, set to go into the 100,000-square-foot expansion launched in April, will serve Iceberg's needs.
But while the sister company may guide Penguin's equipment purchases, it will not be the sole customer. Office furniture work will fill about a third of Penguin's capacity.
The rest is slated for contract work.
The firm began its first non-Iceberg business, molding industrial garbage bin lids, in April. More work is booked.
“We're really looking at the world of molding, looking at what's available out there,” Bart said. “We're pretty excited.”