Major upgrades help Otto Environmental prepare for growth

Waste and recycling container maker Otto Environmental Systems North America Inc. ended up spending about 18 months and about $18 million improving infrastructure, adding manufacturing capacity and preparing the company for growth.

But the journey, which included a complete shutdown of injection molding operations in parts of May and June wasn't exactly easy, according to company CEO Robert Engle.

Now that Charlotte, N.C.-based Otto is back online, he said the company, which uses high density polyethylene to make waste and recycling carts, is stronger than ever.

Engle arrived at the company about 3½ years ago and set out to increase asset utilization at a company that was only using about 50 percent of its operating capacity.

As business grew, it became apparent that aging infrastructure could not keep up with the increasing production and had to be addressed, Engle explained.

“It was a tough decision for the company because it was realized after we had a number of growth initiatives in play. So we had a lot new business coming in the door, and we realized we weren't going to be able to service the customers the way they needed to be serviced,” Engle remembered.

“We've gone through the whole infrastructure,” he said. “We added new presses. We added about 30 percent capacity to our output in the waste container business.”

Otto also has increased capacity by about 40 percent in its contract molding business, International Contract Molding LLC, which makes parts for outside customers.

Improvements came to Otto as years of business expansion led to production problems.

“The growth had really stressed the manufacturing equipment. There was just not enough time spent on being proactive with maintenance and updates,” Engle said.

“When business kept on growing and the demand on the machines and the plant kept increasing, we got to a point where we needed to stop the actions and take the machines down and really rebuild them and do it right,” he said.

Otto started about 18 months ago, working incrementally on different aspects of manufacturing, rebuilding some equipment, buying other equipment new, repairing or replacing huge molds that make trash and recycling carts residents wheel out to the curb.

Work took place at the company's flagship site in Charlotte as well its smaller manufacturing location in Eloy, Ariz., south of Phoenix.

“We were just to the point where efficiencies in the plants just were absolutely out of whack. And cycle times, up time, all that stuff was unpredictable and out of standard,” Engle said.

Along with machinery and molds, an important improvement for Otto was the upgrade of the plants' water cooling systems that now allow for more predictable manufacturing.

The old system in Charlotte, on hot days, could not adequately cool the molds when air temperatures were too hot. “Last year, we had multiple days down,” Engle remembered. “You lose a day here, you lose a day there. ... You just couldn't take the risk of the continued business interruptions with the way they were occurring with the down time.”

But improving the cooling system is not as simple of sending out a mold or shutting down a machine for repairs.

Otto had to take the entire Charlotte site down for days to make the needed infrastructure changes. “There's never the right time,” the CEO said, to bring production to a complete halt.

Now the work, the CEO said, is largely in the rear-view mirror.

Business for Otto is up almost 50 percent since 2013, and Engle expects it to double between then and 2018.

“We've worked really hard to get to where we are at here today over the last 18 months,” Engle said. “We're back in line now. We're stronger and more efficient than ever with a nice boost in capacity. We're hitting the market. It's a good thing here for OTTO. We've got a bunch of excited people.”

Otto Environmental Services North America is a subsidiary of Otto Group BV, a privately held Netherlands-based waste collection products and services company.

The Charlotte-based company makes a range of wheeled containers, but the 65-gallon and 95-gallon models make up the bulk Otto's sales.