Moll Industries Inc. is smaller than it was four months ago - with annual sales of $90 million instead of $160 million and five plants instead of eight.
But President and Chief Executive Officer Joe Pack does not see the downsizing as anything but positive for the Dallas-based injection molder of parts for the medical, automotive, consumer and appliance industries.
When Moll ended its relationship with Whirlpool four months ago, ``we right-sized our company,'' said Pack, the former vice president of sales and marketing who took over the top spot at Moll in late November. ``The rest of the company didn't change, and I wouldn't say this changes our direction.''
While sales did decline, ``all the other things you measure us on - money in the bank, the ability to make a profit - have all been instantly increased by that decision,'' he said.
``Right-sizing your company to get a payback is worth it. Being a $1 billion [company] without the right profits isn't as good as being a $100 million making a 10 percent return. The company is more profitable than it has been in a long time and is in a stronger position.''
Medical manufacturing now represents a much bigger part of Moll's business. With annual medical-related sales between $48 million and $60 million, that segment represents at least half the company's total, compared with 30 percent previously.
The changes are just the latest in a roller-coaster ride for a company that, since it emerged from bankruptcy in June 2003, has been owned by Highland Capital Management LP, a Dallas-based registered investment adviser that manages more than $20 billion in assets.
Moll went on an acquisition binge in 2004 and 2005, and last year moved the operations of an purchased plant in Costa Mesa, Calif., to a new plant in Tucson, only to shutter the Tucson site two months later, moving the work to Mexico.
``The key word as we move forward is balance,'' Pack said. ``We don't want any market or customer to dominate us.''
Pack wants Moll to grow at a steady rate.
``We want profitable growth,'' he said. If he doesn't feel the company can handle an acquisition or project, then he won't do it.
``The key today in the manufacturing world in North America is to have secondary services. Our core will be around injection molding, but we will continue to expand into assembly and subassembly and putting parts into our customer's subassemblies. We want to do more of the manufacturing in the supply chain for the customer,'' Pack said.
Moll currently has roughly 200 presses at its five plants: Seagrove and Lexington, N.C.; Donegal, Ireland; and Empalme and Ramos Arizpe, Mexico. Pack said the Seagrove plant produces the most revenue, with 90 percent of its sales coming from medical or prescription consumer products. Ramos Arizpe is the largest plant.
He also said the company kept the newer and better equipment from the two plants it shuttered and the one it sold, moving the equipment to other Moll facilities.
Without being specific, Pack said Moll might have another plant move soon.
``We may have to move one plant within the same general region because it is too small,'' he said.
The Moll CEO said any additional location decisions or moves, including acquisitions, will be based on whether the company needs to be in a specific geographic region to ``gain a technology advantage, provide a logistical advantage for a customer or to enable a customer to penetrate a specific market or customer base.''
The other part of Pack's strategy is to leverage advantages across markets and tap into the strengths of its partnerships with customers. For example, one of its customers can give Moll lower-cost access to raw materials and another can give the company lower-cost access to equipment, automation and technology, he said.
Pack stressed he wants his firm to remain a front-runner in medical, which ``brings higher levels of technology and discipline that we can take to our other market segments.''
In the appliance business, he said, ``the key is that you have to be extremely efficient and know how to deliver low-cost products'' - a skill transferable to its other market segments.
In the automotive and consumer segments, the goal is ``utilizing assets flexibly and having modular assets you can change quickly and use across multiple parts and models,'' Pack said.
``We made some tough decisions to position ourselves for an extremely competitive manufacturing market,'' said Pack. ``You cannot waste costs. You cannot waste money. You cannot build inventory anymore.''
As he pointed out, the biggest challenge right now is the industry has a lot of unused capacity in North America, and there are ``a lot of people willing to sell that capacity at low-cost.
``That is why we left Whirlpool,'' Pack said. ``At the end of the day, the capacity you have has to be worth X amount of money to you or it is not worth having that capacity.''