Pete Kaczmarek hopes to take Mearthane to the next level

CRANSTON, R.I.—For Pete Kaczmarek, president and chief operating officer at Mearthane Products Corp. Inc. in Cranston, polyurethanes have always been in his blood.

Kaczmarek finishes his first year in the role this October, having joined the developer and manufacturer of polyurethane components to help take it to the next level, he said.

A chemical engineer by education, his first job was as a process engineer making polyurethanes for BF Goodrich. He spent 14 years at Rogers Corp., working as the senior vice president and general manager of the high-performance foams division. After that, he worked as the president and CEO of Astrodyne TDI Corp., a private equity-owned developer and manufacturer of power supplies and components.

He became friends during the last few years with MPC CEO Kevin Redmond, who brought him on to help the company continue to grow.

"I've worked at private companies, public companies, private equity-owned companies at senior levels, always related to specialty materials," he said. "I was very excited about it. I still am. I think MPC's got a lot of growth potential ahead of it."

MPC has centered on custom components during its 52-year run, and when much of its traditional paper-handling components business began to move offshore in the late 1990s and early 2000s, it wasn't quite large enough to follow, Kaczmarek said.

The company contracted and focused on more niche, specialized products requested by original equipment manufacturers. That left MPC in a unique position, he said.

"We have an unusual combination," he said. "We're a smaller company. We're nimble, and we can move quickly. But we also have a lot of experience working directly with very large multinational corporations."

Coming on last year, Kaczmarek's strategy was to find new ways to share MPC's technical base with a wider range of the market by emphasizing the company's value proposition as a specialty polyurethane component developer, he said. Specializing in operations, Kaczmarek studied MPC's processes and development, and looked for ways to improve execution while Redmond focused on strengthening the company's finances and acquisition abilities.

Upgraded operations

One route for Kaczmarek was reorganization of the company to upgrade capabilities from an operations management standpoint, he said.

"One of the things about a smaller company is each person makes a big impact on a smaller team," Kaczmarek said. "We have a very versatile, capable manufacturing operation, but that versatility creates complexity. You really need operations management at the supervisory and management level and engineering level who can optimize the capabilities you have."

Kaczmarek worked to "upgrade almost all our key management," he said, looking for candidates comfortable working in a smaller business footprint and experience in promoting growth.

That included people like Jose Estrela, quality assurance and improvement manager, previously manager of production, quality and regulatory affairs at International Coil Inc., and Steven Labonte, operations manager, previously operations manager at Glencore L.L.C.

Another big change in a management position came with MPC's new director of marketing, Alejandro Martinez, who came from a senior marketing manager position at Honeywell International.

"This is a new position for us, to really get our message out into the world," Kaczmarek said. "If you follow us on Twitter, LinkedIn or Facebook, we're just ramping up the level of communication out to the marketplace about our value proposition. That's how design engineers hear about companies that can solve their problems these days."

On top of the management changes, MPC has added about 5 percent to its work force overall, with an employee total right around 100. That growth comes with some assistance from the state of Rhode Island, which, like MPC, also benefits from its size, Kaczmarek said.

"Because of its small size, you can get to know the government and the government resources quite well. There are some excellent programs to encourage manufacturing job growth that we're participating in," he said. "The state has been very accommodating in helping with training and recruiting and apprenticeship programs. We are beginning to grow from a staffing standpoint and getting a lot of help and encouragement from the state."

As MPC grows, it can leverage its versatile manufacturing footprint to create low-volume, high-difficulty parts, and high capacities of product in the same plant, he said. One example is MPC's inline skate wheels for professional racing, which have been seeing continued growth as a niche product. While inline skating isn't a popular sport in the U.S., it has a strong following around the world.

"We make the fastest skate wheels in the world, and every champion from every country wants to use MPC wheels," he said. "We've had to develop much higher manufacturing capacity within the plant to be able to support that."

The Black Magic wheel is poised to grow by as much as 20 percent in 2017, he said.

"It's mainly the result of a product manager who focuses on the skating market. He's been able to really make our value proposition very clear to our distributors and end-users," Kaczmarek said.

With products like the Black Magic wheel so popular globally, MPC has a focus on international business, even as a smaller company. Currently, about 25 different countries makes up MPC's exporting business, with about 70 percent of the export business spread across 10 of those countries.

"We have very strong skate wheel distribution partnerships in countries like China, South Korea, the Netherlands and Columbia. Those are probably the four largest today," he said. "Fifty-three percent of our total sales in the first half of this year were directly exported from our factory here in Rhode Island to other countries."

Although MPC works with distribution partners for its skate wheels, it sells directly to OEMs for the industrial market.

MPC was recognized in May as the Small Business Exporter of the Year by the U.S. Small Business Administration. It also worked with SBA's State Trade Expansion Program grants in 2017 to fund overseas trade missions and in-person meetings with international business prospects in Israel, Great Britain, Japan and Canada. MPC plans to return to Israel with Rhode Island's trade delegation in December. The firm said its most recent trip to Israel led to more than $400,000 of new annual business.

Trading on the world stage means managing labeling, custom paperwork and tariffs and other concerns, and MPC keeps up with the challenges, Kaczmarek said.

"We make it a priority because our customers are companies like Diebold, NCR Corp., HP and Xerox, that are household names for office automation equipment," he said. "If you design a part with them, they expect that you're going to be able to seamlessly ship that part in mass production to wherever they're assembling their devices, which could be anywhere. So we've learned that we've got to be really on top of that."

New opportunities

Moving forward, MPC is looking to expand through both organic growth and acquisition, with a focus on acquisitions that will add to the company's value proposition, Kaczmarek said. An announcement about one new acquisition is likely to come in the next few months, he said.

Also, MPC will develop strong relationships with OEM design communities to be a part of the conversation when difficult design problems come up, he said.

"We started working with a new OEM three years ago, with whom we had no track record or sales. Today, we produce four of their most critical parts in their newest machines," he said. "That's a result of helping their design engineers understand what our capabilities are, but also that ability to do a quick development, be very flexible, scale up and get the part to wherever in the world it needs to be."

Beyond expanding customer offerings, MPC also is looking for new growth in broader markets, including food processing, food and pharmaceutical packaging, and agricultural equipment, Kaczmarek said.

"Polyurethanes are ideal materials for components in those applications, so we're really trying to refine our message and get that word out," he said.

Looking back on his first year with MPC, Kaczmarek sees double-digit organic growth and an upgraded management team. And he wants to keep pushing that growth to new heights, he said.

"For the next year, we have a focus on driving projects we have in-house and taking on an unprecedented large amount of new opportunities," he said. "It's taking advantage of the applications in which we feel like we have a compelling value proposition with our flexible business approach and our cast polyurethane technology."