LUXEMBURG, WIS. (Sept. 29, 2:55 p.m. ET) — Officials at N.E.W. Plastics Corp. are thankful they run a diversified business.
At about the same time President Mike Rekitzke assumed his position in the fall of 2008, global financial markets tumbled, Wall Street stumbled and the U.S. housing bubble burst — all dreadful news for the Luxemburg, Wis.-based company's ReNew Plastics division, which manufactures recycled plastic lumber.
In May 2009, N.E.W. — which stands for North East Wisconsin — acquired Trimax Building Products Inc., which gave it a footing in the plastic structural lumber business, albeit at a time when new home builders largely weren't placing orders.
Also starting in the late '00s and continuing to the present time, debt-laden and cash-strapped states and municipalities have trimmed their budgets, scaling back plans for roads, docks and parking projects not already funded.
But N.E.W. not only has survived, it has grown, thanks to the dedication of the wife and sons of its founder, Rekitzke said during a June 13 interview in Luxemburg.
“Kudos to them, because of them over the last year-and-a-half, we've put an extra $6 million in the bottom line,” Rekitzke said.
After N.E.W. founder Irv Vincent, a pioneer in the plastic lumber industry, died of mesothelioma in September 2003, his sons, Lonnie and Vern, and his wife, Nancy, kept the family firm going. They hired Rekitzke, a veteran of the paper industry, in 2008 to steer N.E.W.'s day-to-day operations.
Lonnie Vincent is N.E.W.'s vice president of sales and marketing and Vern Vincent is vice president of partner development. The brothers are co-owners of the company.
“Basically, Vern and I decided to do what we needed to do, which was work with clients, or as we call them, ‘partners.' We decided for the best interest of the company that we would get an outside [person] to develop the strategic vision of the organization,” Lonnie Vincent said June 13 in Luxemburg.
Nancy Vincent, who served as N.E.W.'s treasurer beginning in 1968, when Irv Vincent began his blow molding operation before branching out into plastic lumber, is no longer the finance officer, but remains on N.E.W.'s board of directors.
Among the headaches that Rekitzke and the rest of the N.E.W. executive team have faced during the last three years are fluctuating resin and diesel fuel prices, which affect bottle and lumber pricing and shipping costs.
Despite those obstacles and the continued sluggishness of the homebuilding market, N.E.W., which employs 210, should realize about $42 million in sales for 2011, Rekitzke said. That's a slight improvement over the $40 million in sales the firm reported in 2010 in a survey from Plastics News, and a leap ahead of the $32 million figure officials gave on the same survey in 2009.
“Obviously, top-line revenue is extremely strong. Although we have [raw materials-related price] escalators and de-escalators in most of our business, you're always 30 days behind, so the lag time, certainly on the upswing, hurts margins,” Rekitzke said
“Having customers who are knowledgeable that the market is going up [and] having them educated about where the market is makes it easier to keep those partnerships going,” he said.
The company's warehouse is 20 miles away in Green Bay, Wis., which helps keep shipping costs down, Lonnie Vincent said. Although N.E.W. management has considered expanding its manufacturing footprint — its 125,000-square-foot plant is hemmed in by other businesses and Wisconsin Highway 54, which divides Luxemburg's north and south sides — it likely will stay close to its base in northeastern Wisconsin to keep costs under control, he added.
Meanwhile, Rekitzke said, research and development is positioning the firm into new applications for its plastic lumber products.
“We've broadened ourselves into profiles other than building products — everything from parking stops to guardrails to speed bumps to right-of-way markers,” he said of ReNew Plastics.
N.E.W. touts the line's potential to earn builders Leadership in Energy and Environmental Design (LEED) points from the U.S. Green Building Council for using its products, which are PVC and bisphenol A-free.
“We were ‘green' before green was cool. With our plastic lumber, we've been heavy metal-free since I started, which is now 22 years,” Lonnie Vincent said.
On its website, N.E.W. showcases recent big-ticket projects that made use of Trimax lumber, including a boardwalk through wetlands built by the Tampa Bay Water Authority in Tampa Bay, Fla.; the replacement of wood railings with Trimax lumber at Churchill Downs in Louisville, Ky., home of the Kentucky Derby; and Discovery Channel television's The Ultimate Clubhouse program, which featured a three-story clubhouse built in Denham Springs, La., by a nonprofit group for a 10-year-old boy who is battling leukemia.
N.E.W's oldest business, its blow molding operation, has hardly been idle: In the last 18 months, five new pieces of machinery, including Uniloy blow molding machines and Axon shrink sleeving equipment, were added as customers demanded nontraditional, lightweight bottles with more available real estate on the outside for eye-catching graphics.
“You're starting to see a lot of contour bottles and different shapes that speak to marketing as opposed to just a straight wall container to hold something,” Rekitzke explained.
N.E.W. bottle sizes range from 2 ounces to 2.5 gallons, mostly molded in polyethylene with some components done in polypropylene. The company is exploring bioplastics, but so far, the quality and shelf life has not been a good trade-off for the increased materials costs, Lonnie Vincent said.
All of the activity at N.E.W., whether for business survival or strategy, occurs down the hall from a large portrait of Irv Vincent that hangs along with Nancy's over the reception area.
Rekitzke acknowledged that, as an outsider, he feels a bit of pressure to measure up to the vision Irv Vincent had when he founded the company.
“The team members here absolutely loved the man; he was a terrific guy. The thing that I've tried to continue is the fact that Irv was somebody who didn't take the answer, ‘We can't do it.' That was not an acceptable answer, whether it was making plastic lumber or anything else,” Rekitzke said.
Lonnie Vincent said he conducts business according to the advice his father gave him when he joined the company.
“The first thing that Dad said to me was, ‘“It might say N.E.W. Plastics on the door, but everybody knows that N.E.W. is Vincent. Don't ruin your name out there,'” Lonnie Vincent remembered. “That's been a very good ‘tell' for us over the years. Sometimes we might not have made the best business decisions because [if] we make an obligation, a promise to somebody, we'll do it.
“The legacy is still there. Sometimes it's difficult; sometimes it's very reassuring,” he said.
Irv Vincent's name lives on as well in the annual 18-hole charity golf scramble he founded in nearby Algoma, Wis., to benefit East Shore Industries Inc., a nonprofit that helps provide jobs and training to people with disabilities.
The event, which in 2004 was renamed the Irv Vincent Memorial Golf Challenge, has raised more than $330,000 during its 12-year run.