TORONTO — Greg Bavington strode through the Cawthra Avenue manufacturing facility of National Rubber Technologies Corp., reflecting on the changes his company had undergone over the past year or so.
As of the end of November, the site was the only NRT facility remaining, as the company moved the last piece of equipment out of its Symington Avenue plant a couple of miles away.
Bavington, president and CEO of NRT and of KN Rubber L.L.C., said the move began in stages in February, around the time KN purchased the former NRI Industries Inc. and renamed it National Rubber Technologies.
"It´s a big job to move a factory," he said, pointing at an enormous rubber press. "That press alone weighs a million pounds."
NRT dropped some product lines at the time of the purchase, which wasn´t the reason for consolidating operations but did make it feasible, according to Bavington.
"This company grew organically into two manufacturing facilities, but it ended up being a little bit stilted," he said. "You´d never have laid it out the way it was laid out."
Having two plants hampered NRT´s efforts at lean manufacturing because of higher costs and logistic delays, Bavington said.
It was problematic to have necessary equipment and key personnel-engineering, maintenance, technical, supervisory and financial-divided between the two locations.
Hauling product and people between locations was a hassle, despite their proximity, he said. Toronto´s notorious traffic invariably meant delays in shuttling between the two buildings. Bavington estimated he´ll have an extra half-hour to hour a day in time that used to be wasted commuting.
"It was Murphy´s Law: You were never in the building you needed to be in," he said. "It was a two-day effort to get five people together for a meeting. To have our key people divided and dispersed just was not efficient.
"Now, all our staff people will be in the same building," Bavington said. "If I want to have a meeting, I just have to stand up and call out their names."
NRT began life as National Rubber Co. in 1927. As NRI Industries, it became both a major rubber recycler and a major supplier of auto parts to Ford Motor Co. and other auto makers. It also developed a large portfolio of other products, including acoustic control goods, matting, flooring and custom-molded goods.
The company had four plants, recycled about 1.5 million tires a year, and in late 2006 announced it had recycled its 22 millionth tire.
Nevertheless, in September 2006 NRI filed for reorganization under the Companies´ Creditors Arrangement Act, the Canadian equivalent of Chapter 11. At the time, then-President Al Power said he would attempt to sell the company as a whole to an appropriate buyer, keeping all its operations intact and its 550-600 employees on the job.
By the end of October, however, NRI announced the closing of two plants and the layoff of about 425 workers in the face of no buyers and debts of more than $22 million.
Kinderhook Industries, a New York-based private equity firm, stepped in four months later as the Toronto-based manufacturer´s financial backer. Through its portfolio company, KN Rubber, Kinderhook purchased NRI, changed its name to National Rubber Technologies and made Bavington-a 15-year veteran of the company, and its vice president of operations for the preceding 10 years-its president and CEO.
Rebirth with new owner
NRT´s financial problems now are well behind it, according to Bavington. The biggest signpost in the company´s rebirth, he said, is in its rehiring-NRT is now up to 300 employees and hopes soon to grow back to NRI´s old strength of 550.
"Every former hourly employee of NRI has been offered a new job at National Rubber Technologies," he said. NRT´s well-trained, loyal work force is one of the company´s great strengths, Bavington said, along with its expertise in product design and operating efficiency.
NRT´s operating synergies were increased late in March when KN purchased Wapakoneta, Ohio-based Koneta Inc. from Lancaster Colony Corp. Koneta is a major manufacturer of rubber bed mats for pickup trucks, truck and trailer splash guards, and other rubber automotive accessories.
"It´s a classic dovetail fit of two companies," Bavington said. "Where NRT was weak, Koneta was strong and vice- versa."
Koneta´s strength in truck accessories complements NRT´s in auto parts and molded rubber, Bavington said. "We´re much stronger working together," he said.
NRT´s business is 50-percent automotive, and the company hopes to increase its auto parts business, according to Bavington.
It still has all of its injection molding business from Ford, as well as significant contracts with other OE and aftermarket companies.
The firm´s matting, flooring and acoustic control businesses also are booming, Bavington said. Wayne Bacik, NRT´s vice president of sales and marketing, was in Europe in November, working on building NRT´s load bearing business there.
NRT also will remain dedicated to rubber recycling as integral to its core strengths, Bavington said. "We recycle the same number of tires as we used to, if not a little more," he said. "Rubber is worth more than coal, and we apply recycled rubber into markets where rubber would be used, not coal."
NRT´s technology allows it to roll out a continuous sheet of rubber one mile in length, Bavington said. After the shapes are cut out of the sheet, the scraps are put back into the batch for reuse.
"With most rubber sheets, you have four sides," he said. "With our continuous process, we have only two. That minimizes waste."
The North American Free Trade Agreement essentially has been in effect for as long as Bavington has been in the rubber industry, and it´s been helpful to companies like his.
"NAFTA has been great for Canadian manufacturing," he said. "The only border issues that concern us now are security ones. Canada is a very small market. As markets become more global, only the best of the best will win. To be the best of the best, you have to have the right technology, the right training and access to sufficient markets to pay for those things."