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Business Observer Monday, Jan. 3, 2011 10 years ago

Prepare to Thrive

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Ambitious Gulf Coast manufacturers plan to be on the right side of the economic turnaround.
by: Mark Gordon Managing Editor

INDUSTRY OUTLOOK: MANUFACTURING

Ted Bill projects bold growth for his specialty wire manufacturing firm in 2011 — at least a 25% increase in revenues.


But like many of his manufacturing peers on the Gulf Coast, Bill is confident, not crazy. Bill, president of Naples-based Pelican Wire Company, knows several serious hurdles stand in the way of his lofty projections, which, if realized, would return the firm to 2008 revenue figures, if not more. He declined to release specific revenue figures or projections.


“Everyone is still reluctant to commit to a project,” says Bill. “They don't know if there will be a double-dip recession or what their tax bill will be.”


Nonetheless, Pelican Wire is poised to grow. The company, with clients from airplane manufacturers to health care firms, hired a dozen people in 2010, says Bill. Those hires brought the employee count to 60. The company plans to add at least five more people in 2011.


“We're certainly looking forward to a year of growth over last year,” says Bill. He adds that the company will seek to go into new markets, in addition to going after work from previous customers.


Several other Gulf Coast manufacturers hold high hopes for 2011.


Sean Dotson, president of RND Automation & Engineering, for instance, says his firm will nearly double its space early next year. The six-employee company, which will go from 4,000 square feet in Manatee County to 7,800 square feet in Sarasota County, also plans to hire two more people next year.


“I think 2011 will be a good year,” says Dotson. “I think people are realizing you can't sit on your hands. You have to invest in your company and this is a good time to do it.”


RND designs and assembles custom-made automation and robotic machines used by other manufacturers. Clients include Sarasota-based Sun Hydraulics, a cartridge valve manufacturer, and Venice-based Tervis Tumbler, which manufactures drinkware products. RND's client list also includes a large manufacturer of contact lenses.


“Manufacturers are investing more into automation to reduce waste and labor in their products,” says Dotson.


The results of that shift are proven in RND's revenues, which grew 92% in 2010, from $1.2 million in 2009 to $2.3 million. The $2.3 million figure even exceeds the $2 million in 2008 revenues, says Dotson.


RND will receive some assistance in its growth strategy in the form of $15,000 in incentives from Sarasota County. The firm must hire employees who earn more than the county's average wage to receive the incentives.


Tervis Tumbler also plans to expand in 2011 and beyond. The $48 million company, with double-digit revenue growth every year since 2005, has been one of the stars of the Sarasota business community in the recession. It expects to surpass $75 million in 2010 revenues.


Tervis Chairman Norbert Donelly hopes to ride that momentum, partially with a reorganization of the company's management structure. In a move announced Dec. 14, the company established an executive office of the president. The office will be comprised of for company executives, including former President and CEO Laura Spencer, who is now the chief financial officer. Barry Wolfson, a consultant with the company for six years, was named president and CEO.


“Tervis has the opportunity to become a dominant consumer brand nationally,” Donelly says in a statement on the reorganization. “This change to an executive office of the president gives us the leadership talent we need to continue our strong success.”


Manufacturers anywhere on the Gulf Coast, even the more successful ones, still face distinct challenges in 2011. Government regulations and the complications in federal and state tax codes are two big ones. The tax challenge is an issue some local manufacturing associations in Florida focused on in 2010, a fight likely to continue next year.


Despite the challenges, National Association of Manufacturers Chief Economist David Huether generally backs up the bold growth projections made by companies like Tervis Tumbler, RND and Pelican Wire. Says Huether: “There will be a pretty solid growth rate in Florida next year.”


Huether says a key element for Florida in 2011 is the state's focus on manufacturing recognized for growth. In fact, according to Huether, four out of 19 sectors in the state make up nearly half of Florida's total manufacturing output. Those sectors are computer electronics; food processing; miscellaneous, made up mostly of medical equipment; and aircraft equipment and parts.


Huether says manufacturers statewide, especially the ones in those sectors, should receive a boost in 2011, if only because it has been so long since companies have been busy.


“It's a lot of pent-up demand,” says Huether.

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