NORTON SHORES — One growing Lakeshore area manufacturer didn’t have to look far when it came time to find a new place to consolidate its operations.
After years of strong growth in the sales of its conveyor and automated material handling equipment, TGW Systems Inc. outgrew its existing facility on Grand Haven Road in Norton Shores. The manufacturer has added 50 workers over the last two years and was bursting at the seams with 275 people.
Moreover, the company was out of room at a time when it was projecting to continue its growth spurt by adding a new business to its Norton Shores operations, said Jim Bronsema, director of sales at TGW.
“We look at our plan moving forward for the next three, four, five years, and we will be bringing on board — starting in 2019 — a whole new production line that is currently being produced in Austria,” he told MiBiz.
That’s why it was fortuitous earlier this year when manufacturer Wacker Neuson announced it planned to close its plant in Norton Shores in July and shift production to its North American base in Menomonee Falls, Wis.
TGW is now in the process of purchasing the Wacker Neuson building, with plans to move in starting in September. The 170,000-square-foot facility at 1300 E. Mount Garfield Road would double TGW’s existing capacity and is only two miles away from its present location, meaning the company would be able to maintain its current workforce.
The ability to grow with the facility was a major selling point for the company.
“We can consolidate our main factory operations into one facility, and in addition to that, it provides us with the opportunity for continuous growth,” Bronsema said.
The move comes as sales for TGW’s conveyor and material handling equipment businesses have grown by 15 to 20 percent annually, Bronsema said.
Between operations in Norton Shores and Grand Rapids last year, TGW generated $170 million in annual sales, with projections of reaching $250 million by 2023. Combined, the West Michigan operations employ about 385 people.
TGW Systems is a business unit of Austria-based TGW Logistics Group, which employs 2,800 employees globally and generated revenues of $742 million last year.
The local operations serve a range of customers, including pork producer Clemens Food Group in Coldwater, Mich., the global apparel outfitter GAP Inc., American fashion label Tory Burch LLC, and multiple pharmaceutical manufacturers.
“It’s hard not finding a customer of ours when we watch commercials,” Bronsema said.
With the new plant and the additional capacity, TGW appears positioned to capitalize on a period of modest growth in the global conveyor market. According to Dublin-based Research and Markets, the global sector is expected to reach $6.4 billion in 2022, growing at a compound annual rate of more than 3 percent.
Another report from the Material Handling Institute notes that 80 percent of supply chain firms are “concerned about digital disruptions and competition.”
The report points to “digital disruption, data explosion and customer experience as the driving forces behind the need for companies to transform how they do business.”
Companies like TGW have benefited from manufacturers’ ongoing investments in automation, which generally translates into more growth, Bronsema said.
“Just to put it in perspective, two years ago we were probably shipping five to 10 truckloads a week,” Bronsema said. “Now we’re up in the 35, 50 truckloads a week.”
Founded as Erms Manufacturing (Ermanco) in 1964, the company built a variety of special devices and semi-standard conveyors before eventually expanding its selection.
Today, TGW sells conveyors through its national distribution network with business growing rapidly over the last few years in e-commerce sales, which are “driving the majority of the market changes,” said Joe Plowman, senior director of operations at TGW.
Currently, the company produces six different types of conveyors, varying on the customer.
“The technology advancements have completely changed from mechanical to electrical mechanical, which is basically what we are more of today,” Plowman said. “The way the system is used is so much more advanced than what it used to be. But the basic fundamentals of assembly and how a system goes together from an operator’s standpoint, the skillset is pretty much the same, which is why the majority of the people have stayed here.”
Like most manufacturers in West Michigan, TGW has experienced its share of difficulty in finding workers. The ability to expand its production capacity nearby and have TGW’s current employees remain “on board” was a win for the company, according to executives.
Additionally, the company said it is planning a job fair for interested workers who will be affected by the Wacker Neuson closure.
For Plowman, the move two miles away will allow the company to realize many opportunities that would be out of reach at its current facility.
“We have very little turnover here, we have a lot of people here that have worked here for many, many years, and they’re the reason we’re so successful in the industry right now,” Plowman said. “To be able to move somewhere else and (have) those people going … there with us, that’s really one of the biggest reasons that we’re so fortunate to be able to find that building. … (The building) provided enough real estate for us to expand without having to move at some point in the near future.”
Made in Michigan: To keep up with an increased demand for its automated conveyor and material handling equipment, TGW Systems Inc. plans to move into a 170,000-square-foot facility starting in September. The plant, which is only two miles away from its existing facility in Norton Shores, will allow the company to double its manufacturing capacity. The company, a business unit of Austria-based TGW Logistics Group, employs 385 people across operations in Norton Shores and Grand Rapids. The West Michigan operations generated $107 million in annual sales last year.