Tad Heise has a front-row seat on consumer packaging trends, the U.S. economic slowdown and the global marketplace as president of Heise Industries Inc., a major blow mold manufacturer.
International sales are helping Heise Industries offset a U.S. market that was ``somewhat soft'' even before the financial crisis, he said in an interview at the company's East Berlin headquarters. Tad Heise's father, Brooks Heise, founded the mold maker in 1965.
For years the company served U.S. customers, but more recently it has become a global player. In the mid-1990s, it formed a joint venture in Mexico City with Eduardo Barberena SA. Today, EB y Heise SA de CV is a stand-alone operation with its own engineering and sales, employing 28.
A year ago, the Connecticut mold maker opened a factory in Ho Chi Minh City, Vietnam. Heise has added a computer numerically controlled machining center to its Vietnam plant its third Doosan Daewoo CNC metalworking machine and boosted employment at the 12,500-square-foot plant by five people, to a total of 15 workers.
The company also is active in the Russian market.
Heise Industries employs 60 in East Berlin, where the company focuses on large blow molds with a lot of cavities, designed for long-stroke blow molding of bottles for consumer products like shampoo, detergent and cleaning products.
About 80 percent of Heise Industries' business is for long-stroke molds. The company made a major investment in 2000 to buy larger milling machines and grinders and install cranes to move the molds through the plant.
Although Tad Heise declined to release sales figures, the company is a significant blow mold supplier. It employs four mold designers and four programmers to generate three-dimensional computer images into CNC codes that direct the milling machines to cut mold cavities automatically.
The U.S. economy appears to be in a recession or headed for one. Conventional wisdom is that packaging is recession-proof but if you pay attention, you might notice fewer brand-new blow molded packaging innovations and new products in the stores.
Big consumer companies regularly ``restage'' products, changing the packaging to make it stand out on crowded retail shelves. But that's slowing down now, Heise said.
``We've seen the impact with two of the majors,'' Heise said. ``One of them was restaging seven of their packages, and we went through early pilot testing on everything. And then they carved three of them out.'' Heise Industries went ahead and built new molds for the other four packages.
The other customer canceled its entire restaging project.
The message was clear.
``They spent the money up until the point where they've got the package developed, and they know it's a functional package,'' and then scaled way back, Heise said.
Heise Industries is on the front lines of blow molded packaging. The company has benefited from several recent trends. The growth of big-box stores and warehouse clubs fueled supersized bottles of everything from pickles to fabric softener.
Now, Wal-Mart Stores Inc. is headed the other way, by offering only concentrated liquid laundry detergent, in smaller packages that use less plastic. Some companies are using slightly smaller packages instead of raising retail prices.
All three of those moves have meant more business for mold makers. And packaging in general continues to become more sophisticated.
``[Companies] have become a lot more driven by the finesse of the design of the package,'' Heise said. ``Twenty years ago, you had an oval or a cylinder with a label. Now they get pretty involved with the design of the package, which makes our life challenging, at times.''
Of course, 20 years ago most blow mold manufacturers still were very U.S.-focused. There was plenty of work to go around, as packaging from glass and other traditional materials converted over to plastics a conversion that has, naturally, slowed. Plus, some of the explosive growth of PET bottles has cooled, as the market has matured.
After the success of the Mexican joint venture, Heise Industries began looking to Asia to set up a fully owned manufacturing operation. Several trips to China made one thing clear, Heise said: ``We're a small company. We're not a big hitter over there, and China just wasn't a place for a company our size. And if you've spent some time over there, you can tell, it's just overheated.''
Then a 15-year employee at the East Berlin plant, a machine operator named Phuc Bui, suggested his native country, Vietnam. Heise visited Vietnam with Bui, and came away impressed. Today, Bui is running Heise Industries (Vietnam) Co. Ltd. in Ho Chi Minh City. So far, Heise Industries has invested $1.5 million in the company.
These days, some companies are moving from China to Vietnam, seeking lower labor costs. But Heise also was impressed by working with Becamex IDC Corp., a company set up by the Vietnamese government to build industrial parks and bring companies to them.
``They do almost everything for you, from soup to nuts. They assume responsibility for a lot of the paperwork,'' he said.
Heise's Vietnam plant is located in an industrial park that hosts about 200 companies and supplies housing for 25,000 workers. It also offers schools, grocery stores, movie theaters and shops.
Heise Industries (Vietnam) was overwhelmed with job applicants. Tad Heise said Vietnamese people want to work for U.S. companies. Plus, the mold maker has air-conditioned the factory floor a rarity in Vietnam, and a major attraction.
People with machining skills turned out. ``The guys we started with were all experienced with the equipment we had,'' Heise said.
After hiring the staff in mid-2007, Bui and another machinist from Connecticut conducted training in Vietnam for several months. The plant began operating that October.
``They hit the ground running when the equipment arrived,'' he said.
For the first few months, the operation made products for the headquarters plant including trim and transfer tooling, a relatively simple device that moves bottles out of the blow molding machine to finishing operations.
Heise Industries (Vietnam) also builds small-cavitation molds for shuttle machines. Originally, the company was going to export the molds to the United States, but demand has grown quickly in Asia.