A shift in ownership at film and bag maker All American Poly Corp. has led to a corresponding shift in strategy and market approach.
The company, one of the largest privately held polyethylene extruders in the United States, has started a ``consolidated expansion'' of its operations, said All American senior Vice President Joe Friedman.
The process included closing one of the company's three New Jersey facilities and expanding equipment and capacity at its larger headquarters building in Piscataway, N.J., Friedman said.
New majority owner Jack Klein is helping to drive that direction, with help from senior management, he said.
Klein recently stepped forward in a management role, years after helping to start All American as a silent partner in 1979. Klein bought out the shares of co-owner George Pscherhofer and now is the company's sole owner, Friedman said.
``They had different business philosophies,'' he said. ``It was an amicable split, but they saw things a bit differently. Jack's money is backing his philosophy.''
All American's philosophical change is more a matter of pragmatism, said General Manager Bob MacDougal. The company had moved in 1997 to a large, 170,000-square-foot site in Piscataway, sitting on 14 acres of land and with plenty of room for expansion.
The extruder also operated a small plant in Irvington, N.J., about 40 miles away. The Irvington plant, under the name Industrial Poly Manufacturing, primarily extruded trash can liners and construction and agricultural film, Friedman said. Meanwhile, the Piscataway facility focused on shrink wrap and industrial applications, such as box liners and lumber covers.
During the past three years, All American's shrink film business has mushroomed from about 70 million pounds annually to close to 120 million pounds, MacDougal said. The business at Irvington became a less significant segment, forcing a difficult executive decision, he said.
Early this year, the company decided to close Irvington and move production to Piscataway. A total of 60 employees were affected, about one-third of whom moved to the Piscataway facility when the plant finally closed in September, MacDougal said.
``We had two managers, two shipping departments, two maintenance departments at two separate plants,'' he said. ``We knew we could be more efficient with lower costs while taking out a lot of slack. Our competitors are rough, and we needed to be more lean and mean.''
Some equipment in Irvington was mothballed, and other bagmaking equipment was transferred to the newer site. At the same time, the company has embarked on a capital improvement campaign, replacing outmoded equipment with new machinery, MacDougal said.
All American already has spent about $2.5 million in new equipment this year, he said. That includes three new bag machines, including what the company calls the largest in-line bag machine at any U.S. plant.
The company also is installing two high-speed, single-layer extrusion machines made by Techflow Design & Manufacturing Inc. of Mississauga, Ontario. The automated machinery will replace slower equipment and help the company grow in capacity, MacDougal said. The pieces also support All American's growth in newer areas, such as shrink film applications that use metallocene-based resins, he added.
The new equipment will bring the total number of extrusion lines to 44, close to past figures but operating at a much faster rate, MacDougal said. The company also has plants in Georgia and Arkansas that contribute to its film volumes.
That investment will support All American's plan to continue its growth as a shrink-film leader, Friedman said. Although the product is considered a ``vanilla'' commodity item, few other companies have focused on the film as a core business, he said.
``We know [shrink film] is commodity-based, but it's a good market that we can make money at,'' Friedman said. ``We're going to continue to bust through like a running back with a great offensive line. While others might not find it profitable, we see opportunity.''
The company wants to produce 200 million pounds of film annually within five years, with 5-8 percent sales growth a year, Friedman said. All American will record about $130 million in sales this year, he said.