Michael Day Enterprises Inc., an engineering resins compounder in Wadsworth, has wrapped up the first phase of a project that will grow its capacity 50 percent by 2007.
MDE installed oversized motors and new gearboxes on a pair of twin-screw extrusion lines. One of those lines also received a larger barrel. Those moves already have increased the firm's annual capacity 15 percent.
``We have to be very creative in order to make money,'' founder and Chief Executive Officer Michael Day said during a recent interview in Wadsworth.
MDE now will add a larger barrel to the other line, and give the full makeover treatment to at least two additional twin-screw lines by 2007 to complete the job. The firm may add a twin-screw line next year as well.
The total cost of the project is expected to be $1.5 million. It's designed to help make the 24-year-old firm remain competitive, particularly in the automotive sector, which accounts for about half of MDE's annual sales. MDE posted sales of about $47 million in 2004 and is on track to approach $53 million in 2005, Day said.
``We've peeled off some business where we couldn't make money,'' Day added. ``Automotive is a double-edged sword. There's so much volume there, but it's very competitive.''
Last year, MDE reduced business in some low-margin nylon 6 compounds used in convoluted tubing.
The company maintains a strong presence in making nylon 6/6 compounds used in engine covers for vehicles from Cadillac, Corvette and the new Chevy Cobalt. In that area, MDE is working to improve the sound-dampening functions of the covers - also known as ``beauty shields'' - so that a urethane foam insert can be removed from the underside of the part.
In addition to nylon, MDE compounds polycarbonate, acetal and other engineering resins. The firm also generates about 20 percent of its sales from recycled products.
Like many compounders, MDE has struggled to pass on price increases in the past two years. Day estimates the firm has passed about half of the increases it has paid on resin on to its own customers.
``We've had to make up the rest through improved efficiencies, but there's only so far that we can cut,'' he said.
The company even has found ways to save on its shipping containers.
By changing the shape of a cardboard box from a rectangle to an octagon - and increasing its storage capacity from 1,100 pounds to 1,500 pounds - MDE saved $150,000 last year.
Such tactics are becoming a way of life for the 135-employee firm.
``We built our business on customer service and on being extremely user-friendly,'' Day said. ``We recognize that we're a mid-level player, and that if we're not overperforming we're going to fade.''