Outlook 2013: Kintz Plastics lands contracts that formerly would go to Chinese firms
HOWES CAVE For nearly four decades, Kintz Plastics in Howes Cave has rolled with the economic punches that come from changes in industries that rely on thermoformed plastic parts.
Sometimes, part of a project would be handled in the U.S., while firms in China, with their ability to get things done cheaper, would handle other components.
But company owner Wynn Kintz sees a change on the horizon in 2013.
For the first time, his company is securing contracts not only for the larger plastic forms, but also for the smaller components.
Firms and employees in China are believed to be gravitating towards more worker-friendly standards, which cost money.
And that means more business for American firms.
“We are seeing a shift. It’s small-scale now, but I think that’s going to increase,” said Kintz, who started the company that’s grown to the biggest private employer in Schoharie County back in 1976.
Boosted supplies of natural gas and their impact on raw materials, favorable trends in the housing market and other factors forecast better times, but economic policy and action at the federal level play an important role in the pace of business, and Kintz said it needs to change.
Kintz Plastics uses heat to mold sheets of plastics into a variety of shapes, called thermoforming.
The company produces enclosures and panels and components of a variety of parts for medical electronics, information technology and telecommunications machinery and for the diagnostic imaging, pool, automotive and transportation industries.
One of its advantages is a piece of equipment called “Jumbo,” one of the largest rotary vacuum machines on the East Coast capable of thermoforming parts as big as 13 feet wide.
For Kintz Plastics, a keen eye on the industry has made it possible to remain steady. The business has employed roughly 90 people over the past three years.
“We haven’t added a lot of people, but we haven’t lost a lot of people. We’ve been stable over the last couple years,” Kintz said.
Keeping busy requires constant work to ensure orders come in, and Kintz said that continued work is important, considering the changes in other businesses that rely on thermoformed plastic parts.
A decade ago, the company’s biggest customer was Eastman Kodak, an industry giant before film photography gave way to digital.
“We do business with customers for many years, but again it changes. It changes dramatically over a period of years. Before Kodak, another company ultimately went out of business. It’s constantly changing, it’s constantly in a state of flux,” Kintz said.
There are dozens of thermoforming companies in the U.S., and they make up the majority of competition for Kintz Plastics, Kintz said.
Staying competitive, he said, requires making use of government assistance when it’s available, such as the state’s ReCharge New York program administered by the New York Power Authority.
Kintz Plastics was among 602 businesses and 76 not-for-profits afforded discounted energy through the program in 2012 — a benefit that helps balance out the difference in the price of doing business down south where many other plastics companies operate.
“Their power is much lower on an hourly basis,” Kintz said.
He said the program doesn’t keep the company on an “even keel” with others to the south, but “it gets us close enough. It certainly is a big help,”
natural gas boost
Another factor assisting the business is the favorable price of natural gas, energy that wasn’t available there until state and local officials pitched in to help.
Faced with high-priced, bottled propane as the only fuel source, Kintz Plastics was considering a move to New Hampshire back in 2001 before state officials came up with $350,000 from the Small Cities Program to support extension of the natural gas line from Cobleskill to the manufacturer’s Caverns Road facility.
The $700,000 project brought 4.2 miles of natural gas piping further west, making it possible for the company to pursue a 30,000 square-foot addition.
Kintz said factors pulling some work back from overseas include an increased emphasis on the standard of living among China’s workers.
In late January, the Associated Press reported hundreds of Chinese workers held factory managers hostage for more than a day during a protest of rules limiting bathroom breaks to two minutes and fines of $8 for arriving to work late.
Strikes are becoming more prevalent among workers in Asia as they learn more about better working conditions in other parts of the world through their mobile phones and the Internet.
Kintz expects this gradual change will bring more business back to the U.S. as China contends with increased costs of doing business.
“This is the kind of thing that’s going to continue over there,” Kintz said.
Though there are favorable signs that 2013 will bring more-robust manufacturing, Kintz said national financial policy needs to be straightened out so that investors and others can have more confidence in doing business with U.S. firms.
Issues like the federal government’s so-called “fiscal cliff” didn’t do much for confidence, he said. “It’s the uncertainty of the national financial crises that continue to upset and concern people. When they get concerned, they obviously get very conservative with their purchasing habits. That goes true for corporations also,” Kintz said.
“It’s difficult enough handling day-to-day situations, but when you can’t depend on your government to settle its financial house, you’ve got issues. That’s my biggest concern; that drives a lot of what happens,” Kintz said.
To read all the stories from the 2013 Outlook special report, click here.