By Rick Romell of the Journal Sentinel
Sussex — It’s been a good six years at Sussex IM Inc.
Purchased by senior managers in late 2009 from its British corporate owner, the plastic products company has nearly doubled its sales, increased employment and expanded its plant.
Now, the injection molding firm is preparing to enlarge its footprint again, and make a major move in retail with a kitchen-storage item invented by one of the owners and dubbed Mr. Lid.
It’s all taking Sussex IM further from its roots as primarily a manufacturer of cosmetic cases to a much more diversified company in an industry that is benefiting from broad economic and demographic trends.
Where compacts and other cosmetics gear once accounted for more than half of Sussex’s sales, they’re now just 11%, while categories such as home and garden, hygiene and sporting goods are on the rise.
“It’s not that we’re losing business in the cosmetics market,” CEO and co-owner Keith Everson said. “It’s that all the other businesses have been growing.”
To accommodate that growth, the company soon will break ground on a new, $10 million factory on the south edge of its namesake village. With a first phase covering 87,000 square feet, the building will be in addition to Sussex’s 130,000-square-foot headquarters factory and offices on Main St.
The firm dates to 1977, when it was started as Sussex Plastics by Lorand Spyers-Duran, who had fled Hungary during the Soviet-suppressed 1956 rebellion. A Princeton-educated engineer, he came to the Milwaukee area to work at a plastics company and eventually branched off on his own.
In 1999, multibillion-dollar British can manufacturer Rexam Plc bought Sussex Plastics for $31 million. With the new ownership came more automation in the plant, workforce reductions and a lean management orientation — all critical for competing in an increasingly globalized industry.
Ten years later, though, amid the worst recession in seven decades, Rexam was ready to exit its operations here, threatening the 210 jobs at Sussex.
“They were planning on closing it and splitting up the business to other” factories, Everson said.
Instead, Everson and two other executives, Chief Financial Officer Dave Guagliardo and Vice President of Operations Phil Salzman, bought the business. The price, according to Rexam’s annual report, was 4 million British pounds — about $6.5 million.
Annual sales totaled $35 million then. Last year they were $65 million. Employment has risen, too, to 270. Sussex also uses 200 to 250 temporary workers, depending on production needs. The factory runs 24 hours, seven days a week.
In part, that reflects favorable circumstances for the industry.
“Plastics continues to grow in this country,” said Bill Carteaux, president and CEO of the Society of the Plastics Industry. “We hit another record in demand last year, and we expect plastics manufacturing to continue to grow in the U.S.”
Helping to fuel those prospects are the fracking-driven surge in domestic production of natural gas. That has greatly reduced the price of one of its byproducts, ethylene, which is used to make most plastic resins.
“We went from being, seven, eight years ago, the highest cost producer of ethylene in the world to the lowest cost producer,” Carteaux said.
With wages rising in China and extensive automation in the industry here, he said, American plastics companies now are globally competitive.
“We are seeing re-shoring happening on a fairly broad scale,” Carteaux said.
Still, overall imports of plastic products have continued to rise, and the trade deficit with China in the category has continued to widen.
But Sussex has won some battles on the import front. It now produces dispensers for Purell products that used to be imported. Ditto for water bottles and mouth guards sold by Nike.
“Two years ago, they were made in Asia,” Everson said. “Today, we make them all here.”
Sussex recently received certification for production of medical devices — an asset as an aging population uses more medical services, which likely means increased demand for appropriate plastics.
The company also stands to benefit if new technology designed to address mild traumatic brain injury in sports takes off. The device is a compression collar that fits around an athlete’s neck and is intended to reduce sloshing of the brain against the skull on impact.
Performance Sports Group Ltd., a publicly traded company that holds the license to the technology, is seeking regulatory approval for the device. If the collar makes it to market, Sussex will manufacture it.
Meanwhile, the firm has its own patented item — Mr. Lid, invented by Everson to solve the kitchen-organization problem of covers getting lost amid drawers jammed with plastic storage containers.
His solution — attach the cover to the container with a hinge — may seem obvious, but it took a number of engineering tweaks to get everything to seal properly.
Originally marketed on infomercials featuring breathless narration and lots of exclamation points, Sussex has sold some 20 million of the containers — not bad, but not huge either.
Now the company is taking Mr. Lid, embodied by an anthropomorphic figure with four fingers and a satisfied smile, into traditional retail.
“Wal-Mart is going to pick it up in the fall for the spring of next year,” Everson said.
If you have retail aspirations, that’s a pretty good start.