HTS Mixing sets sights on diversification

UNION CITY, Tenn.—HTS Mixing L.L.C. is branching out in the custom rubber mixing industry.

For the last four years, the compounder focused strictly on the tire sector, building up a strong business with a solid customer base.

But several months ago, owner Ronnie Johnson decided it was time for the Union City-headquartered firm to expand its reach and begin supplying other parts of the rubber industry, if for no other reason than to be more diversified and not tied to one industry.

HTS Mixing also conducted an internal study that showed there is a substantial market for rubber compounds outside tires but that there are very few high capacity, high quality providers of rubber compounds, according to Sales Manager Larry Essary. The custom mixer can fill that need, he said.

In the present economy, a business needs to be diversified, “willing to modify both short- and long-term strategies and embrace change when it happens,” he said. The company maintained its centric tire base, he added, but is well prepared to make modifications to its business model and take advantage of opportunities outside that market.

HTS Mixing didn't just look for any new avenues of growth and dash out helter skelter without preparation.

In fact, it took awhile to get a strategic plan together, with input provided from a variety of internal and external sources, including Johnson and members of the company's management team along with officials from four other separate individually owned and operated businesses within the same complex that support HTS Mixing and each other.

That complex covers 53 acres under one roof, with HTS Mixing operating out of a facility that takes up about 10 of those acres and RPG Physical Test Lab, Fleming Fabric and Wire, Powerhouse Services and High Notes Solutions occupying the remaining area. “Each owner has years of industry expertise in their businesses,” Essary said, and each has an operations manager.

HTS Mixing performs all compounding operations; RPG is a state-of-the-art physical testing laboratory; Fleming operates all calendering, fabric and wire operations; Powerhouse ensures all power sources are available; and High Note handles all internal and external logistics, including transportation, he said.

Once the decision was made to expand outward, the company needed assistance in marketing, according to Essary. “No one knew who we were, what our capabilities were, how good we are at what we do, how competitive we could be, and how dependable we were with on-time deliveries.

“Our small staff started a marketing campaign with limited marketing funds. We were successful but not reaching key targets on the list.

“It was at that point in time that we engaged our local economic development office. That first meeting with the L.L.C. owners was the beginning of what quickly turned into a state level economic development alliance. Together in one room we had local and state EDC directors, Tennessee Valley Authority personnel, county mayor and all four L.L.C. owners. They listened ... to the owners' growth strategy and came back with answers to assist us. Currently, we are working together as a team for the better of the community and state.”

He said the process was easy and extremely helpful. “It was obvious the meeting was not their first rodeo.” The company experienced no red tape, no procrastination and no promises, just a commitment to do everything possible to assist the firm in achieving its goals, Essary said.

Since those EDC meetings, “we no longer say "if' this happens; we say "when' this happens,” he said. Its new plan has been put in motion. The company has fanned out into a variety of sectors, including air springs, bladders, conveyor belts, hose and others.

“I can't say enough good things about our local and state level economic development offices and their assistance in developing our market strategy,” he said. “They have made multiple team visits to our location to assist us in reaching our goals.”

With capacity of more than 500 million pounds per year, the firm is one of the largest family owned custom mix providers in the U.S., the sales manager said. “Along with capacity, we bring scalability and flexibility options to our customers. There are companies that produce end products on a scale that will warrant our capacity, while other customers can benefit from our flexibility to produce smaller amounts of different compounds.”

Although it began operating in February 2012, HTS Mixing has more than 100 years of combined expertise in key compounding positions—including Johnson with 35 years in the business—and a maintenance crew and operators with another 100 years, Essary said.

Johnson formed the company after Goodyear, his former employer, closed a plant and left the area. A large number of employees who worked at the facility joined him. With a work force of 115, it has plans to add to that number, Essary said.

The owners and operations managers of each of the five companies in the complex meet daily in the early morning to discuss schedules, shipments, orders, concerns and other business matters for the day. “Together they function as a well-oiled machine,” he said, adding that HTS Mixing gets third party approval on everything it ships.

For instance, the lab will not approve any shipment that does not meet specifications regardless of the ship date or time, Essary said. “There is no boss in the corner office to approve throughput and shipments over quality. The L.L.C, format that thrives in our facility is an acceleration mechanism for growth.” He calls the whole operation “total solution model.”

“Working as a team strengthens our market position,” Essary maintained.

With all of the growing pains associated with starting a new business in the past, it has attained industry leading quality, production and on-time delivery levels while sitting on 300 million pounds of excess capacity, he said.

“The uncertainty of market conditions with the initial customer base created swings in our business,” Essary said. “Peaks and valleys within our base caused employee levels to swing. Our decision to grow the business not only made good business sense but also created a stable environment for our work force, which in turn made our community a more attractive place to live and raise a family.

“The owner has lived here and raised his family here. It's a chance to give back to the community.”

HTS Mixing's initial customer base was located in the Midwest, but the company has expanded that reach to include the South and Southeast regions. Its goal is to cover all of the U.S.

Essary said with the firm's present strategy, it could end up using all of its capacity in 2016. “That's our goal. We want to build our company on long-term partnerships. Our culture lends itself to becoming a partner. We can respond to short-term needs and small orders, but we are built for long-term partnerships.”

He cited a highly experienced work force in the rubber mixing industry along with fast reaction to customer requests, industry leading dispersion rates, high quality, the ability to provide solutions not just products, a whatever-it-takes employee attitude, and being unafraid of changes and challenges as reasons HTS Mixing has retained a solid customer base that continues to grow.