Current Issue

From bankruptcy to success: Reborn Kismet prospering

Comments Email
Operations Manager Paul Kundrat (left) and Quality Manager Ron Rice measure an extruded length prior to vulcanizing it into an endless ring.

BLUE RIDGE, Ga.—Nine years ago, Kismet Products needed a lifeline to survive.

It found it in a group of investors who were willing to take a chance on a long-time rubber product producer that had fallen on tough times.

The group acquired the assets of the company at a bankruptcy auction in Cleveland in 2005, changed its name to Kismet Rubber Products Corp. and guided the firm from its lowest depths on a road to success.

Operating continuously since then at the firm's 100,000-sq.-ft. plant in Blue Ridge, the custom extruder of rubber and silicone profiles moved into the black in 2006 and 2007, survived the recession of 2008 and 2009, and has been profitable since 2010, tripling the sales it posted in 2005, according to Thomas G. Fitzhenry, president and chief operating officer.

The custom extruder of rubber and silicone products, with a work force of 34, currently is looking to expand its capabilities with plans to add a continuous cure Salt Bath line in 2014 in order to serve a growing need for endless belting in the market, he said.

A new Salt Bath line will give Kismet—which has six conventional extrusion lines, one hot air vulcanization line and a microwave line—the ability to offer continuous lengths for extruded profiles that are too large for the microwave line.

The new line also will give the firm the ability to run continuous lengths from compounds and colors that are not compatible with the microwave system, Fitzhenry said.

Passing quality certification

In November, Kismet took a major step forward when it successfully passed its registration audit for ISO 9001-2008 certification in a project spearheaded by Quality Manager Ron Rice, a veteran of more than 40 years with the company.

ISO registration "will guarantee growth of at least 10 percent in 2014," Fitzhenry said, but won't account for additional anticipated growth where it's not a prerequisite for increased business. "Our large distributor base does not care that much for ISO certification; however, it is important to our new and growing OEM customers."

There were a lot of factors that played a role in helping to get the business on the right course after it was rescued from bankruptcy, but a key one, Fitzhenry said, was the addition of Paul Kundrat as operations manager in 2008.

That was the turning point for the corporation, he said. "He brought with him 30 years of compounding and extruding experience. In addition, he put together a management team and systems that have improved quality and productivity every year since his hiring."

Kismet's newest owners—Fitzhenry, David Hum-phreys, Sandra Humphreys and Theresa Trumpore—and the decisions they've made in the last nine years also had a great deal to do with the turnaround.

"We held our vendors to the same values our customers hold us to. We cut down on rejects, and we're continuing to improve on that," Fitzhenry said. "We've changed the whole philosophy and culture of the business and built up a lot of pride in our employees.

"What goes out the door are quality products. We have things we have to improve, but we're on the right track now."

Improved quality, on time delivery and competitive pricing will continue to be the driving forces at Kismet, he said. "No matter how good our quality products are, it will never be good enough for us. There's always room for improvement."

In addition to extruded profiles, tubing and cord, the company specializes in the manufacture of extruded and vulcanized spliced endless gaskets, extruded gaskets with molded corners, extruded gaskets with injection molded corners and lathe-cut parts.

From Ohio to Georgia

Formed in 1949, the company was owned and successfully operated by members of the Hassel family before it was sold, changed hands a few times and ended up with a venture capital investment group, with little industry knowledge, prior to its collapse.

Kismet operated out of a plant in Painesville, Ohio, until 2000 when the operation was moved to Perry, Ohio, and finally to Blue Ridge, located about 90 miles from Atlanta, in 2003.

It moved to Perry because the Painesville plant was old and not suitable for expansion. It headed to Blue Ridge to lower costs because the company wasn't making a profit at the Perry location and falling deeper into debt.

Fortunately, the only customers the firm lost with the move south were those that didn't want to pay the higher freight costs from Georgia back north, Fitzhenry said.

It went into bankruptcy because the company's pricing structure was geared to booking jobs, but its prices were far too low, which resulted in invoicing that kept growing sales without generating profits, he said.

The new group of investors acquired it because "the marketplace is always looking for a reliable extruder that is able to provide quality products at competitive prices," according to Fitzhenry.

"Kismet had all the equipment to provide a wide variety of products, and we felt that the company had the expertise to compete in the marketplace," he said. "We felt that our group had the managerial expertise to turn the company around."

It turned a profit in just a year after exiting bankruptcy because the company focused on quality and revising a sound pricing structure, the executive said.

"Our group believes in making a reasonable profit on each and every job, which is not what the previous owners understood. We also concentrated on instituting a company philosophy that our employees could embrace."

For years, the firm had a reputation for being able to produce and supply a wide variety of rubber profile, tubing, cord and a variety of gaskets at reasonable prices. It currently provides virtually the same product line, but its emphasis is supplying a quality part at competitive prices that allows the firm to make money.

Fitzhenry said that Kismet's approach to its customers is to work closely with them from the design through the production phase of a project. "We want to produce a part, not only to our customers' print, but from optimum material for their application.

"In other words, if a customer requires a silicone material, we want to know why they have chosen silicone. It is our desire that a customer benefits from our expertise."

The company's primary customer base is east of the Mississippi River, but it is steadily growing its business in the western states. The firm primarily serves distributors and the appliance, electronics, agriculture, heavy equipment, transportation, architectural and defense industries.

Fitzhenry noted that the company has several long-term employees such as Rice, "and we'd like to think they have stayed because of the changes we have made.

"I think our key people have found their effort and the embracing of the company philosophy has resulted in a reborn and successful company. We couldn't have been successful without their effort and focus on Kismet's survival. I also believe they know we appreciate their effort."