According to the American Sleep Apnea Association, about 70 million Americans suffer from the disorder, in which a person's breathing is interrupted during sleep, preventing the brain and the rest of the body from getting enough oxygen. Untreated, the organization says that the condition can cause health problems such as diabetes, high blood pressure, strokes and heart disease.
The burgeoning market for CPAP machines — and more specifically, the manufacturing of the hoses used in the devices — has created a boon for Hi-Tech Medical. More than 3 million cases of sleep apnea are being diagnosed each year in the U.S. alone, according to the Mayo Clinic. And it is becoming more of a known health condition in emerging markets such as Europe and India.
“That is very good market for us,” Costantino said. “We manufacture our products for the large OEMs and develop our solutions for them. We get into a variety of different applications, whether that is standard CPAP hose or heated CPAP hoses, where there's wire embedded — going off the technology we developed years ago from our floor care market — to help solve issues for our customers.”
That demand is part of the reason that the Abbeville facility runs 24 hours per day, seven days a week, for a majority of its products.
It took several years, two major acquisitions and a $2 million renovation over the past five years, however, for the Hi-Tech Duravent/Hi-Tech Medical brands to get to the point they are today.
Flexible Technologies, founded in Guilford, Conn., in 1947, opened its 350,000-square-foot Abbeville facility in 1964.
Smiths Group acquired Flexible Technologies in 1991, and three years later Flexible Technologies acquired Duravent, a Kent, Wash.-based hose plant that focused on the industrial market.
In 2005, Flexible acquired Georgetown, Mass.-based Hi-Tech Hose, which had been founded nearly two decades earlier in Santa Ana, Calif. Hi-Tech Hose was merged with its Duravent business, creating Hi-Tech Duravent.
At about that time, Flexible Technologies spun off Hi-Tech Medical, providing emphasis on the medical sector that is booming today. As medical production shifted to Abbeville in 2008, the former Hi-Tech Hose plant in Georgetown was closed.
In 2009, Flexible Technologies purchased a vacant, 60,000-sq.-ft. facility across the street from its Abbeville plant and relocated its Thermaflex flexible duct systems manufacturing business there. Thermaflex, part of Flexible Technologies' Construction Products Group, produces residential and commercial heating and air ducting.
That freed up 50,000 additional square feet in the main plant to accommodate production transferred from the former Hi-Tech Hose plant.
Today, the Abbeville facility serves as the global headquarters of the Flexible Technologies Group, including engineering and research and development. The group employs roughly 430, of which about 250 work in Abbeville. The rest are divided among a second Hi-Tech Duravent facility in Plymouth, Ind.; Flexchlauch Produktions in Lubbock, Germany; Flexible Ducting Malaysia; and a distribution center in Mississauga, Ontario.
Costantino said that transition was challenging.
“You're moving facilities and retraining employees on running products and learning about equipment,” he said. “As much knowledge as you bring with you, a lot of people spent a lot of time with our engineers, transferring that knowledge and that understanding. It doesn't happen overnight. It definitely took a good amount of time for us to get back on our feet.”
Costantino said the company has emerged better from the experience.
“From that we learned a lot,” he said. “We learned to listen to our customers, what their needs are, what's going on in the marketplace, and what we can do internally to help create the environment that our customers want to buy from us.”
He said fierce competition led the team to question its performance both from an availability and quality standpoint.
“We went through a period of time during the transition where we had long lead times. We couldn't get orders out the door to customers in a timely manner, and that started to change,” Costantino said.
Costantino credits the firm's core stocking program — in which the company guarantees that a large group of its products are available and ready to ship in a timely fashion — for helping to right the Hi-Tech Duravent/Hi-Tech Medical ship.
“I couldn't say that we said, "Poof, we're going to have a core stocking program, and it was going to work,'” he said. “But I can tell you that when we look at it in 2015, we're very proud of where we're at.”
While the North American automotive market is humming, Costantino said the firm sees growth potential in China, “maybe not as good as what they thought it was going to be,” while another target market, South America, has faltered. “Hopefully that will straighten out over time.”
The key, he said, is for the company to find new avenues for products in the automotive and medical sectors.
“A lot of times, you see applications or products that we feel our hoses would be a much better fit, whether they are looking for good airflow, bend resistance, kink resistance,” he said. “In industrial markets, everywhere you look, whether it's mining or drilling or just moving pellets or anything, there are new customers and new applications all the time.”
While sales figures were unavailable for the individual companies — Smiths reported revenue of $3.3 billion in 2014, with Flex-Tek accounting for $282.7 million of that — Costantino said sales have exceeded expectations for several years.
“It has enabled us to grow from a manufacturing standpoint, and it has enabled us to grow our sales force because the more that we can get out in front of people and show them how we can help them solve issues that they may be having, we find more and more opportunities,” he said.
The key, he said, is listening to customers. “We know we can we get better,” he said. “We have to continue to get out in the market, listen to our customers and take the next steps to continue to improve, whether that's from a service standpoint, a product and development standpoint, maybe see changes where the market is going.
“We feel it's very important to hear what our customers have to say and show a true partnership.”
