LOUISVILLE, KY. (Oct. 13, 4 p.m. ET) — SimPak International LLC President Michael Lyons recently received a call informing him that his company placed 273rd on Inc. magazine's list of the 500 fastest-growing U.S. firms.
That honor joined a slew of recent awards for Louisville, Ky.-based SimPak, including Lyons' mention as a finalist in Ernst & Young's Entrepreneur of the Year award for 2010 and the Kentucky Association of Manufacturers' 2009 Manufacturer of Year Award in the small-company division.
“Those are nice pats on the back, but you don't let them distract you from your focus. You just keep your head down and keep moving forward,” Lyons said during recent telephone interviews. Sept. 26 and Oct. 4.
What's next for SimPak is developing its sales and distribution network, particularly within a 400-mile radius of Louisville for its SimPad protective packaging.
Made on custom, proprietary vacuum form/fill/sealing machines, SimPads consist of recycled expanded polystyrene foam beads encased in a blended polyethylene film bag. The result is a package that conforms to the shape of the product it's wrapped around, such as electronics, porcelain, and auto parts.
Bags range from 6 inches long and 10 inches wide and three-quarters of an inch thick to 34 inches long, 43 inches wide and 3 inches thick. “We can sausage link these to make any length we wan,” Lyons said.
Founded in May 2004, SimPak operates a 43,000-square-foot plant in Louisville, which houses five of the VFFS machines. A sixth such machine will be added in November, Lyons said. The company is seeking more manufacturing space — to bring it up to 75,000-80,000 square feet.
2011 sales are estimated to be between $3 million and $4 million, and the strategy is to double that in 2012, he said. According to the Inc. 500 ranking, SimPak reported that its sales grew 1,186 percent between 2007 and 2010 — from $203,691 to $2.6 million.
SimPak employs 26, and will add four to seven employees if it doubles sales in 2012, Lyons said. The firm recently hired a national sales director and has received patents in the U.S. and Europe.
The company's proprietary VFFS machines came about over the course of the last year, as workers tried to adapt machines originally designed to bag coffee and nuts and bolts to manufacture its SimPads and to do it more efficiently. An engineering consultant was able to make heat shield, vacuum and fill technology improvements that cut scrap generated by one machine from 10 percent to 1.5 percent, Lyons said.
“Some of that technology can be used on vertical form/fill/seal machines in different industries. So there is a potential lateral market to sell the patentable designs on our machinery to other industries,” he said.
Meanwhile, the company is concentrating on pushing the “green” aspect of its packaging. Both in 2010 and 2011, SimPak used 1 million cubic feet of the recycled EPS beads — enough to keep 277 truckloads of material out of landfills, Lyons said.
“People don't realize the amount of recycling that goes on in plastics,” Lyons said. “We could buy a biodegradable [EPS] bead and make a SimPad out of it; but the cushioning performance isn't anywhere in the same ballpark as EPS, which is very important when you're protecting people's products.”
The company is considering printing a list of secondary uses for used SimPads (including as attic insulation), or printing a toll-free telephone number on the casing so customers that want to return used pads to the manufacturer could do so at the customers' expense.
As the company grows, it will form regional partnerships with recyclers to give SimPads multiple leases on life, Lyons said.