DICKSON, Tenn.—It's been a busy three years for America's newest zinc oxide producer.
Zinc Oxide L.L.C. got a plant in production, achieved ISO 9001:2008 certification and continues to add customers, hitting $55 million in total sales since it became operational in June 2014.
The firm is on track for 80 percent growth in 2016 and forecasts about 60 percent growth in 2017, thanks to a new wave of approvals that came through and will be able to participate in annual contracts next year.
“It's been good,” Ed Smith, Zinc Oxide's vice president of sales and marketing, said of the firm's progress. “Things always take longer than you think because customer approvals take time, but we've done very well. We have a lot of customers on board; we have some really good distributors. So I'm very happy with our progress.”
He added that the firm is primarily a domestic supplier, with about 95 percent of its business coming in the U.S. However the rest that it does export goes to a variety of countries in South America, Europe and Asia.
Zinc Oxide operates from its 170,000-sq.-ft. facility in Dickson that represents a $30 million investment. As of September, the facility has not reported an OSHA recordable safety incident since its inception, the firm said. It produces 40,000 metric tons of zinc oxide per year utilizing the French process production method.
Employment has increased to 35, with 20 jobs being added since production stated in 2014, Smith said.
It serves a variety of markets, including tire, rubber, chemical, electrical/electronics, animal feed, fertilizer and ceramics markets. The firm's tire-related business has grown significantly and is now the firm's largest industry. Smith said the accounts took awhile to get approved—anywhere from six to 18 months.
A lot of the demand is coming from the fact that a plethora of tire makers either have opened or are in the process of establishing new plants in the Southeastern U.S., including Kumho, Hankook, Giti, Yokohama, Bridgestone and Continental, with Zinc Oxide's Dickson facility right in the heart of all the activity.
But the tire industry is not the only area where Zinc Oxide has grown. Smith said the firm is doing well in animal feed, micronutrients and non-tire rubber goods, and it has seen the second largest growth in the chemicals area.
That said, the firm is taking a cautious approach to adding capacity.
“We're going to add capacity when the market grows,” Smith said. “Right now there's a little bit of an oversupply in the market, and I think as the market continues to grow and the new tire accounts come in, and as the market grows we're going to add capacity. We won't do that probably for one to two more years. The last thing we want to do is bring more capacity to market, flood it and then prices drop.”
Recently, the firm has added a new pelletizer, a new low-lead zinc oxide grade for the pharmaceutical market, a fourth salesman, and reached a agreement with Aurora Rubber to be the firm's new distributor for the West Coast, bringing its distributor network to about 10. Smith said distributors have been key to the firm's growth as they help Zinc Oxide reach less-than-truckload accounts.
Other distributors include Micro for Mexico and South America; Debro Chemicals for Canada; and Lintech, ChemSpec, TMC Materials and Cary Co. for the U.S.
“It's been significant,” Smith said of the firm's distributor network. “While we target the larger truckload accounts, where we're not set up is to go after the less than truckload market. They've done a nice job calling on accounts where we just don't have the time or the manpower to get to.”
The firm has crossed the 200 customer plateau, and Smith hopes to surpass 300 at some point in 2017. More than two dozen of Zinc Oxide's customers have audited the plant and given the firm high marks for product quality, safety, customer service, manufacturing expertise and ultra-modern quality process controls, Smith said.
“We have a small market share right now, but we're going to continue to grow,” Smith said. “We want to continue to get more and more market share.”