Growing customer demand amid capacity constraints had one thermoformed plastics manufacturer of kayaks, canoes and other consumer products paddling upstream this year.
But a $7.5 million expansion project at the Muskegon-based Ameriform Inc. should accommodate a significant increase in orders, primarily from big-box retailers such as Dunham’s Sports and Dick’s Sporting Goods, said Dan Harris, the company’s vice president of sales.
“We’ve probably missed about $10 million in sales this year that we couldn’t get out the door because of capacity constraints,” Harris said. “This (expansion) is going to address that and hopefully carry us into 2016 and 2017.”
As part of the project that the company financed through internal and external funding sources, Ameriform leased an additional 130,000-square-foot facility at 1450 East Laketon Avenue in Muskegon. The manufacturer also plans to add additional thermoforming and extrusion machines and upgrade its rotational molding capabilities as part of the investment.
Ameriform plans to complete the expansion and begin production at the new facility in early 2015. The company expects the move to add 60 positions to its current 260-person workforce.
Getting the expansion up and running will allow Ameriform to produce an additional 10 million pounds of product annually, Harris said.
While the company makes a variety of plastic products ranging from hunting blinds to dock floats, the bulk of its business comes from its Sun Dolphin watercraft division that makes kayaks and canoes and its Five Peaks Technology LLC line of portable sanitation products, Harris said.
Although Harris declined to disclose annual revenues for the company, he said sales since the depths of the recession have been up considerably for both divisions of Ameriform, which saw sales double overall since 2010.
Additionally, approximately 50 percent of the company’s portable sanitation business comes from export sales, primarily for the South American and Chinese markets, Harris said. The company exports products across its portfolio to 35 different countries.
Ameriform seems to be outperforming current industry trends in both the portable sanitation and boating market. Following a significant dip during the recession, the portable sanitation industry — valued at $1.2 billion globally — is predicted to grow 1.1 percent annually for the next five years, according to data from IBISWorld, a market research firm.
However, an industry association leader cautions against describing the current market as rapidly expanding.
“Since the recession, there has been an increase in demand but it would be a mistake to call it growth,” said Karleen Kos, executive director of the Portable Sanitation Association International. “Our industry is sensitive to recessions and we’re replacing what we lost.”
Both canoe and kayak sales in the recreational boating market decreased by 5.7 percent from 2012 to 2013, according to data from the National Marine Manufacturers Association.
Despite those industry headwinds, part of Ameriform’s success can be attributed to its big-box retail customer base, Harris said. While retail product margins are tight, Ameriform gains volume from the consumer products business, and being in plastics opens a large market for the company, he said.
“Our customers will come up to us and ask, ‘Can you make us hunting blinds or kiddy pools?’” Harris said. “That stuff is on our radar, right down to edging that goes around tree rings.”
Going forward, the company plans to expand its portfolio into other consumer goods such as playground equipment, sanitation holding tanks and sleds to meet requests from its customers, Harris said.
The company’s lean structure and internal engineering team allows it to quickly bring products to market, Harris said, citing Ameriform’s new Evoke Kayak line — marketed to more experienced kayakers — that was developed in six months.
“We get started with a lot of our products on a cocktail napkin,” Harris said. “Being family-orientated, it doesn’t take us long to make a decision. If something looks good, we do it immediately. We look for a quick payback and there are no committees to go through.”
With a growing product base, the company’s looming challenges come from capacity and inventory constraints, Harris said. The seasonal nature along with the size of its products forces the company to place a premium on both production and inventory space.
Ameriform also has tentative plans for another expansion toward the middle of 2015 — creating an additional 25 jobs — to increase its rotational molding capabilities for its product lines, Harris said.
He said Ameriform has come a long way from its founding in 1988 by his father, Kenneth Harris, who also started KL Industries Inc. in 1982 after previously owning a foundry in Grand Rapids.
Over time, the founder’s four sons joined him in the business after their own pursuits. Currently, each of the four brothers heads up different aspects of the business. Tom Harris leads the company as CEO.
“My father had a lot of entrepreneurial spirit and one by one, we all came back,” Dan Harris said. “We fell into (the business) and wanted to be our own boss.”
The company itself also changed significantly over the past decade, he said. When it launched, Ameriform’s customer base became 80 percent automotive, but after the market began to show signs of consolidation in 2004, the company dropped its automotive clients and pursued its own product lines, launching its portable sanitation business the same year.
That proactive focus on growth has Harris and his brothers prepared to continue to innovate.
“We want to keep on expanding,” he said.