Preferred expanding production at Tenn. facility

BARBERTON, Ohio—Preferred Compounding Corp. may have a new owner, but little else has changed, especially when it comes to its efforts to improve and add capabilities as the business grows.

It has upgraded and expanded its facilities and capabilities regularly over the last several years. And it is doing it again.

This time around, the custom rubber mixer is upgrading its production plant in Huntington, Tenn., according to President and CEO Ken Bloom.

Preferred Compounding recently completed the installation of a new Farrel F-270 Tangential variable speed mixer at the facility, he said.

And it will add an in-line gear pump strainer at the factory soon, likely in March, he added. The mixing line replaces a line that has been in place at the Huntington site for some time.

Both the new mixer and pump strainer will match similar machinery installed at the company's San Luis Potosi, Mexico, facility last year as part of an expansion project at that site, Bloom said.

In 2015, the firm completed construction of a 15,000-sq.-ft. addition to the San Luis Potosi plant—which was purchased by the company from Iacp Jevsa of Barcelona, Spain, in 2012. The addition boosted the size of the facility to about 81,000 square feet.

It then added a Farrel F-270 mixer and an in-line gear pump to double the Mexican facility's capacity to between 250 million and 300 million pounds, depending on whether the company is on a 24-hour, five- or seven-day schedule.

Work on the Huntington plant upgrade project began in the spring of 2015, Bloom said. “We just completed the installation of the mixer and two weeks ago began running rubber on it.” Cost of the project was not disclosed.

Just as the Barberton-headquartered firm did at its Mexican facility, it added the mixer and soon will have the gear pump in place at the Huntington site because it wants to ensure customers get the same exact products and capabilities in the U.S. and Mexico. “We try to stay ahead of customer needs,” he said.

Not all of the company's plants have duplicate machinery yet. Its Barberton and Tallapoosa, Ga., compounding operations have not been upgraded to the Farrel F-270 Tangential variable speed mixer and the in-line gear pump strainer thus far.

“They have some different machine configurations,” Bloom said. “We eventually want a more standard system across the board.”

He said the firm will add new mixing lines as the business continues to grow. “I can't tell you where the next investment will go at this time, but we will continue to invest to support our five core principles: consistent quality, technical excellence, comprehensive capabilities, proactive service and relationship focus.

“As we invest, we continue to focus on the latest technology to be able to support our customers changing needs.”

Bloom said the company is good at adapting quickly to its customers' needs. That's why it has added new capabilities at its plants over the last several years. Its chemists work directly with customers to ensure their needs are met, he said.

He said there are no guarantees that the investments it makes will help the company grow, “but if history is any predictor, I would bet on the Preferred team every time.”

Preferred Compounding's upgrades and additions “are part of a journey we've been on since I got here in 2006,” he said.

That journey will continue under new owners. Audax Private Equity and members of the compounder's management team purchased the firm from Wingate Partners, a Dallas-based private equity firm, in a transaction that closed Feb. 1.

Wingate sold the business after pouring money into the operation to help it grow into a large, diverse custom mixer.

It invested more than $20 million in Preferred over the last five years to help develop and implement the company's growth strategies to the point where it is now in a position to take the next step on its growth path, Bloom said.

Preferred Compounding's Huntington project was launched prior to acquisition, but under Audax the firm will continue to look for opportunities to upgrade or expand, said Bloom, who is one of the investors in the business. “We will continue to focus on growth. Audax is all about growth; that's why they invested in the business.”

The company compounds rubber at its four-facility complex, spanning about 98,000 square feet, in Barberton; a 120,000-sq.-ft. facility in Tallapoosa, Ga.; its 57,000-sq.-ft. factory in Huntington; and the San Luis Potosi site.