PITTSBURGH (May 15, 11:35 a.m. EDT) — Coming off its biggest-ever year for new products, Conair Group Inc. is moving forward globally, with its first factory in China. But top executive Christopher Keller said Conair will continue to assemble auxiliary equipment for the North American market — by far its largest — at its main factory in Franklin, Pa.
Keller, Conair's president and chief operating officer since 2004, outlined the firm's strategy during an interview at company headquarters in Pittsburgh. Conair managers and employees have been re-creating the company in the past several years, he said.
Conair has been busy.
“The first couple of months of 2005 started a little slow. But really, in the spring of 2005, things began to pick up. By the time we got to midyear, from a bookings standpoint, we were humming. And the momentum really continued all the way through to today,” he said in the interview in late February. Privately held Conair, which employs about 350, does not release sales figures.
Keller attributes the growth to capacity expansions by some customers. But he said a big reason is major new blenders, dryers and loaders Conair introduced in late 2004 and 2005.
He called 2005 “a huge year” for new products, when Conair revamped its entire line of materials-handling equipment.
“Our new offerings in material handling in particular — blenders, loaders, dryers — last year, gave a lot of people a business reason to go out and buy new equipment,” Keller said. “It wasn't all about capacity expansion. But we have equipment that saved them tremendous amounts of energy. Equipment that helped them manage their resin better, that is way more user-friendly.”
Conair's status as a broad-based auxiliary equipment supplier is a strength, he said.
“Where the overall market isn't adding capacity, certain companies are adding capacity. That's a huge opportunity for us,” Keller said. “The other side of the equation is, we've got what we would consider to be the largest installed base of customers, domestically, in the industry. And when they're not expanding capacity, sometimes they have to replace equipment because it's old.”
The flurry of new equipment included:
c The TrueBlend gravimetric batch blender, designed after talking to customers to eliminate leaking resin from the unit.
c The Access line of hopper loaders, with an angled canister and a hinged lid that can be opened with one hand, features allowing easier cleaning.
c The Carousel Plus dryer, which uses a wheel to rotate filters that contain molecular-size desiccant, to reduce drying time dramatically.
Conair has changed how it develops new products, to work even more closely with customers. The company sends the team of Chuck Morgan, innovation manager, and senior industrial designer Eric Pitchford into customer plants to see how employees actually use the equipment. Morgan and Pitchford spend time just watching, talking to people and taking notes.
Conair officials said that direct approach yields better, more-detailed information than customer surveys.
“It's about technology on the one hand, but it's also about getting inside the mind and the body of the customer,” Keller said. “They go out there, and they will stand and watch a manufacturing cell operate for hours at a time. If you do it over the course of two, three or four days, they've picked up tremendous insight into how people use our equipment and how their process operates. And they take it directly into the new products.”
Keller, 37, is the son-in-law of G. Watts Humphrey Jr., who heads Pittsburgh holding company Sewickley Capital Inc. — the owner of Rapid Granulator AB of Sweden and International Plastics Equipment Group Inc. Conair is part of IPEG. Humphrey is the chief executive officer of Conair.
Keller joined IPEG in 2002, as vice president of strategic planning and business development. He became chief financial officer, then was promoted to president and COO in 2004.
Keller has a bachelor's degree from Yale University and an MBA from the University of Michigan. His work experience includes investment management and venture capital. After earning the MBA, he shifted into manufacturing management. He was a business analyst and held supervisory roles at Burner Systems International Inc. in Chattanooga, Tenn., which makes burners for gas appliances. He also was CFO of another Chattanooga company, Chattem Inc., that makes personal-care product brands such as Gold Bond, Selsun Blue and Dexatrim.
Global growth is one of Keller's big agenda items. The company plans to open an assembly plant in the Shanghai area later this year.
Keller said Conair needs to follow its multinational customers to China so it can maintain fast delivery and local parts, service and support.
Some other U.S. auxiliary suppliers have imported finished equipment from China for sale here — notably grinders — but Keller said Conair does not plan to follow that lead. “Our strategy will not be to import low-cost finished product from overseas,” he said.
Conair remains committed to U.S. assembly at its plant in Franklin, a small town between Pittsburgh and Erie, Pa. Keller said domestic assembly is critical for Conair's custom-configured equipment shipped to North America.
At the same time, Conair is studying global parts sourcing. “We will look, where appropriate, to implement a global supply chain for components … but the configuration of the final assembly is going to be done [in Franklin].”
In 2004, Conair did restructure its U.S. operations in Franklin. “We made the decision that we were going to be an assembly-focused manufacturing operation, that we were going to outsource fabrication and machining capabilities,” Keller said.
That was a big change for Conair, which is celebrating its 50th anniversary this year. Officials decided to focus on innovation, product design, sales and marketing. “Historically, we've constrained ourselves a little bit in terms of product design, with respect to what our manufacturing capabilities were. That's crazy,” he said.
Conair continues to do its own final assembly at the Franklin factory. The company outsourced machining operations and spun off fabrication, which includes producing machine frames and forming metal covers and control cabinets. Keller said Conair reduced its workforce by about 75 people.
Keller said cutting costs was not the motivation for the restructuring. “It was about flexibility and focus,” he said.
Conair also remains focused only on the plastics industry. Keller said the company will not diversify into food equipment or other nonplastics areas.
“Conair — the brand, the company, the people, the products and the customers — is about plastics. That's critical for us, because focus is important,” he said.