Flexaust to set up hose plant in North Carolina, upgrade other facilities

BURLINGTON, N.C. — Flexaust Co. Inc. is adding a new hose production plant in Burlington that is part of a strategic growth initiative by the firm that involves projects at its other facilities as well.

The hose and ducting manufacturer is leasing an existing 57,000-square-feet. factory in Burlington and plans to spend more than $3 million within the next two years for new equipment and infrastructure upgrades, according to Michael Harvey, Flexaust vice president and general manager.

Production is projected to begin sometime during the first quarter of 2020, he said. Flexaust plans to install five hose production lines, with employment expected to be close to 30 within two years and about 45-50 in five years.

Harvey said Flexaust is receiving some financial help from city, county and state sources for the Burlington project. That includes a re-use grant to help with infrastructure costs because the firm is occupying an older building, with the funds to be paid once the company reaches the job targets expected with the plant opening.

The hose maker decided to look at adding a facility in that region of the U.S. because it has good coverage of 75 percent of the U.S. through its existing facilities in Warsaw, Ind.; Amesbury, Mass.; and Las Vegas.

"It just made sense looking at putting something in the Southeast, with the customer base and the amount of product coming into this area so we could better service our customers," Harvey said.

Flexaust looked at North and South Carolina as well as Georgia, where it has a warehouse through one of its manufacturing representatives.

He said setting up shop in North Carolina made sense because it already has a sales office there, giving it some resources and a bit of infrastructure.

Michael O'Brien, Flexaust vice president of sales and marketing, said the new factory will allow the manufacturer to grow its relationships with the customer base it has in the region.

"In that part of the world, we have some dust collection customers, we have some shipyards and we have a better freight lane to Florida, which was kind of tough from Massachusetts," he said.

Harvey added that the facility is located just a mile from the I-40/I-85 exit, making shipping simpler. "We're in a good location," he said. "Logistically there's such a population boom going on in this part of the country, and you can get to a pretty good percentage of the population within two days' truck time."

The Burlington plant will manufacture products for the firm's Genesis, Flexaduct and Flexaust hose lines. O'Brien said not all products in those lines will be produced there, but some of the most popular products that the hose and ducting firm guarantees will ship within 24 hours. "Every facility now has inventory to support our distributor customer base with those items," he said.

The Genesis line, O'Brien said, is a polyethylene vacuum hose that serves the insulation blowing industry, the carpet cleaning industry, the car wash sector and industrial vacuum applications.

The Flexaduct line is extruded hoses made of polyurethane, thermoplastic rubber, PVC and polypropylene. It serves the dust collection, wood working, lawn and leaf, furniture and factory maintenance and repair operation sectors.

He said the Flexaust line is neoprene and coated nylon and polyester lines, along with some PVC-coated hose that services the general purpose, factory, AV and surface preparation markets.

Harvey said the new machinery is being built to equip the Burlington facility. Flexaust purchases the extruders but then custom-makes all the proprietary hose making and auxiliary items needed for the machinery, particularly at its machine shop at its headquarters complex in Warsaw.

Flexaust also has other projects either completed or planned for each of its other three production sites.

O'Brien said it opened up a 10,000-square-feet. expansion at its Amesbury site early this year. That was to house additional production equipment, warehouse space and to increase the size of the machine shop there.

The company also is in the process of adding 27,000 square feet of warehouse space at one of its three facilities in Warsaw. That building will now be 80,000 square feet, giving Flexaust about 275,000 square feet combined in Warsaw once the latest expansion is completed, according to Harvey.

O'Brien said the firm previously added three production lines and two over-molders in the building being expanded, which took some space previously used for warehousing. This project will support inventory and staging at the site, which was needed because of the equipment that was installed there.

"There will be a little bit more room to add some more equipment," Harvey said, "but it's to help with the flow and the efficiencies of the current building. We're handling stuff too often right now because of the limited space that we have."

Once the Indiana expansion is complete and the Burlington plant is opened, Flexaust will turn its attention to Las Vegas, where it plans to double the size of the operation. Harvey said that will entail moving to a new location because the firm is landlocked with the square footage it has at its current facility.

He added that the firm already is building equipment that will be used for the Las Vegas expansion because it made more sense to do it at the same time as the machinery for Burlington to get a better deal on purchases from vendors.

Looking at the big picture, O'Brien said because of the growth Flexaust has been experiencing, it needed to decide how it would deal with the challenges of adding capacity, dealing with transportation issues and where it can attract experienced talent to its firm.

Harvey added there are several issues that the firm had to consider. One is the growth the firm has had in various areas of the country, along with the desire of some of its larger customers that wanted Flexaust to be able to supply products from different areas from a disaster recovery and risk mitigation standpoint.

"It became apparent to us that we have to continue to have multiple different manufacturing in multiple locations," he said. "Both the North Carolina plant and the expansion of Las Vegas will help us do that so we're not limited if we have a disaster in one of the facilities that we can still make product and ship out of a different facility."

O'Brien said the hose and ducting producer enjoyed growth of about 20 percent from 2016-18. He said Flexaust has enjoyed growing market share but also has made headway in some new markets, including the marine industry, some OEM customers in lawn and leaf collection equipment, agriculture and the floor care industry.

This year has presented some challenges, but revenues remain ahead of 2018 levels. "It's not as steady. There are more peaks and valleys than there has been the previous couple of years," O'Brien said. "There is still growth in 2019 compared to 2018. I think the economy has some a little cautious right now. I'm not sure if they're holding back on inventory, which puts more pressure on production to meet customer needs later."

But the outlook remains positive enough for the firm to continue with its expansion plans. "We've definitely jumped off the cliff and there's no turning back now," he said. "We're pretty confident with our current customer base and our relations with them, and the new growth opportunities, that we feel we can support what our plan is."

Harvey also said putting the company closer to customers will "give our distributors a better opportunity to sell our products against our competition because we're in these locations. Instead of shipping out of one or two locations, we can reach a larger part of the country because of that."

Having the added capacity also will help Flexaust improve its new product innovation capabilities. "Because the equipment was running so much for normal production, we needed to take a little bit of pressure off so we could be creative and get new things to the market that the market was demanding," Harvey said.