RECORD STAFF BUSINESS
Steady growth in demand for rubber is fuelling expansion at AirBoss of America, owner of a big rubber mixing operation in Kitchener.
The Newmarket-based company is expanding production into the United States with the opening of a rubber mixing plant in Waynesville, N.C.
"We reached the point where we needed new capacity," said chief operating officer Kim Aagaard.
The plant will begin mixing rubber in January at a rate of 20 million pounds a year, boosting the company's capacity to 220 million pounds a year.
It will employ 20 to 25 people.
The new plant will do just a fraction of the volume that AirBoss, one of the largest rubber mixing companies in North America, does in Kitchener.
Production in the Strange Street plant, a former Uniroyal Goodrich tire factory, has increased steadily since AirBoss acquired it in 1996.
WORKFORCE OF 300
The plant, which also produces rubber products, including protective rubber gloves for the U.S. military, has seen its workforce grow to 300.
The factory in North Carolina will free up capacity in Kitchener that AirBoss needs to meet growing demand from its customers, said Aagaard.
Manufacturers of conveyor belts are buying more rubber because of strong growth in the mining and natural resources sector, he said.
Demand also is increasing from producers of truck tires.
Sales of cars and light trucks are slumping, but truck sales are rising, Aagaard noted. "And there is a lot more rubber that goes into a truck tire than in a car tire."
Demand for natural and synthetic rubber is projected to keep growing at a rate of about three per cent a year, he said.
"It isn't an exciting industry, it isn't sexy," Aagaard said. "But rubber is a needed product."
AirBoss, which earned $2.5 million on sales of $145.7 million in the nine months ended Sept. 30, opened the plant in the U.S. because it needs to address the concerns of some key U.S. customers about its ability to ship rubber across the border in a timely fashion, Aagaard said.
"Anything we can do to support their needs and minimize delivery risks is really important to them."
Moving closer to those customers also will reduce transportation costs, which is a big plus in a business with narrow margins, he said.
"It is really a business of pennies," said Aagaard. "If it costs four or five cents a pound to ship something somewhere and you can cut that in half, it makes a huge difference."