Passaic's innovations lead to further growth

WAYNE, N.J.—New innovations are commonplace at Passaic Rubber Co. and have been for at least the last two decades.

They spur organic growth, something else that's pretty regular at the rubber product maker.

And that, along with a desire to provide services at the highest level and move products to customers in a timely manner, has led to the need to add, replace or upgrade machinery on a regular basis, according to Jeff Leach, chairman and chief operating officer of the Wayne-based firm.

A mid-sized, 95-year-old manufacturer of endless belts, rubber covered rollers and calendered goods, Passaic has spent around $2 million on new equipment and plant upgrades over the last two years, about $1 million of it in 2014. More machinery additions will be made in 2015.

It has several machines and pieces of equipment on order, including an extruder that will take several months to receive, and it's currently adding an automatic gauge control system to its calender, Leach said.

Not all of the new machinery is put into service immediately. Some will be stored as part of Passaic's contingency plan, he said.

For instance, “we'll put the extruder in storage and if our present extruder goes down and needs repair we'll use the other extruder. We're doing the same thing with a lot of different machinery parts, too, like mill rolls.”

In addition, the company also is building a printing, measuring, slitting line for sheeting produced by the firm. The line will be able to print the proper logos, ID codes, manufacturing date and other information. Among other capabilities, it will be able to slit to the proper length,

A key unit being added is an ERP (enterprise resource planning) system needed to monitor and control virtually everything in the company's 70,000-sq.-ft. plant. “We're in the process of setting up the software program to oversee inventory and all of our manufacturing processes from inception of an order to shipping,” Leach said.

“This is a huge undertaking for us and very expensive ... and it puts us in a position where we're spending over $1 million in new equipment.”

However, he continued, “if you have the cash, you can do it. So, we're very fortunate.” Business has been very good at Passaic this year, he said. It seems to be slowing down a bit right now, “but we're still above last year and that was a very good year, too.”

Passaic, which does a good deal of contract manufacturing for Fortune 500 and Fortune 100 companies, has focused heavily on keeping its machinery in top shape and quickly replacing any faulty equipment for many years, Leach said recently at the NIBA—The Belting Association annual convention.

“We don't want to have a lack of equipment, or a breakdown of equipment, as an excuse for not delivering products on time,” he said. “That's our problem, not our customer's ... so we do whatever it takes to be on time with quality products.”

In addition to new machinery, Passaic's other expenditures at its plant in 2014 included a new roof, back up compressed air center, back up boiler, replacement of the facility's entire electrical panel and new transformers.

Leach joined the family owned business full time in 1977 after graduating from Purdue University. He had worked at the company in the summers during his college years and part time when he wasn't participating in extracurricular activities, like baseball, in high school.

Passaic is a two-family owned and operated business. Leach and John D. Mathey, who goes by J.D. and serves as president and CEO, are fourth generation owners of the firm.

A fifth generation waits in the wings. James Leach is already on board as vice president of operations. And, while he's only in high school with college still to come, Jack Mathey worked part time at the company during the summer.

“We haven't built the business on bottom feeders,” Jeff Leach said. “We use top quality compounds, many of them our recipes. Nothing that we make is a low cost product. Our market is quality and value added service. We feel confident when our compound goes out as a roller, sleeves, sheet rubber (cured and uncured), roof expansion joint systems—which is a new product—and everything else we make.

“We built our business on continuous new products. We meet once a week to discuss the new products and review what we're doing. If we're going to fall, we're going to fall forward, not backward. You have to be willing to make mistakes because sometimes they steer you in the right direction.”

The company is also market driven, always looking for new products—something that lasts or performs better than what's available—and new sectors where it can grow.