A long-time Chicago-area thermoformer is jumping into a new market with an eye toward creating additional business opportunities for the next generation.
Family-owned Dordan Manufacturing Co. Inc. is spending more than $2 million to construct a Class 8 clean room to manufacture medical device packaging.
Work is about 80 percent complete at this point on the 3,200-square-foot space within the company's current footprint in Woodstock, Ill.
CEO Daniel Slavin expects production to begin in early 2019 after contemplating the move in recent years.
"It's always been on the horizon. A lot of things, when you are busy and your business is busy, they get back-burnered only from being busy. And, at some point, I made the commitment that regardless of current day situations, it was an investment in the future," Slavin said.
With a son, daughter and son-in-law all working at Dordan as third-generation employees, the current CEO believes it's important to lay the groundwork for future expansion and success.
"I felt it was time for a commitment and an investment for the third generation going forward. When you look at what's happening in regular plastic packaging, there's so much anti-press and things. In order to continue the longevity of the company, I felt it was time to go into a market that had a little different vibe, a little different requirement," he said.
Medical device packaging will allow Dordan to showcase the company's engineering and manufacturing strengths, Slavin said.
Food is another high-growth area for thermoformed packaging, but he said that market does not really interest Dordan.
"Food is a high-volume, low-margin business. It's not something I wanted to play in. We've looked at it. We have business in food. But when you look at what's going on in the industry in food, it's a race toward zero. It's more about pounds through the press," he said.
"It's not about quality. It's not about engineering. It's not about the things that are our strong suit. It was a non-starter once we looked at the numbers," he said.
Slavin said he understands Dordan will need time to develop its medical thermoforming business.
"We have to walk before we run," he said. "But I'm doing this for a long-term investment for the third generation."
The medical business is a cautious one, where potential change is studied closely before any moves are made.
"There's going to be a lot of different things that take time, and we are prepared for that," he said.
Being a privately held business take pressure off Dordan to meet aggressive return on investment requirements that might be in place at other businesses, Slavin said.
Dordan is converting former warehouse space into the new clean room. That will require the company to eventually construct new storage space. Dordan, for now, is coping with tighter quarters.
Slavin said he expects employment to increase by 10 to 20 people over time if the new business venture works out as he envisions. The company is installing one press to start, but there will be space in the new clean room for an additional press when needed.
Dordan was founded by Daniel's parents Edwin and Vivian Slavin and has been in the packaging business since 1962.
Markets include retail, electronics, beauty, industrial, automotive, housewares and hardware. The company also has served the health care sector with non-clean room packaging.
