Culture key to Alliance Polymers & Services Elastomers reaching 10-year milestone

ROMULUS, Mich.—Alliance Polymers & Services Elastomers, a distributor of thermoplastic elastomers including its own private label products, reached a business milestone in celebrating its 10th year.

The company's culture and philosophy played a role in reaching that mark, but a major part was its ability to move quickly and make decisions to meet customers' needs, according to Stephane Morin, one of the company's two owners and principals.

Morin and APS's other principal, Roger Huarng, came together while working at BASF Corp.'s Wyandotte, Mich., location. Morin had arrived at BASF with a background as a mechanical engineer with processing experience, and Huarng as a chemical engineer, Morin said. Both worked for BASF's thermoplastic urethanes business for about 15 years. Before going out on their own, Morin was a sales and product manager, and Huarng was a marketing and project manager.

"When (BASF) did not have, at that point, a distributor for their small and medium-size accounts, we made a proposal to the business to become their exclusive distributor of TPU, which they agreed to," Morin said. "They eventually added another distributor, but we started the business by being only a TPU distributor, and only a BASF elastomer distributor."

Starting small

The company started with just the two of them, housed in a 5,000-sq.-ft. building in Romulus. Right away, they realized how much more quickly the company could move as a lean organization to make decisions for customers, Morin said.

"The thing that really amazed me when Roger and I started this company is the amount of time that we did not have to spend in meetings," he said.

Their accumulated knowledge of how corporations worked gave them insight into the best ways to develop and support customers, Morin said. Eventually, APS got into thermoplastic vulcanizates and thermoplastic elastomers to give customers a one-stop shop for elastomeric materials. But more than providing products, they realized that their customers needed education and recommendations about elastomers.

"Our biggest strength is to be technically knowledgeable enough to make very quickly the right assessment on the material that is needed," Morin said. "We've become not only a supplier of material, but a technical resource for our customers."

On top of some compounding and blending in-house, APS can do tool and part design, and has the ability to run trials for smaller parts in-house, as well as produce new samples. Morin said it amazes him how many design shops, engineering firms and new customers call because they can't get that kind of information from OEMs.

"Elastomers is unique in itself, so it's important to find the right people to solve problems, or keep people from falling into problems," he said. "Roger and I, our background is technical, so we know what we're talking about."

In time, Morin and Huarng decided that the company should make its own materials, alongside the others it distributed, he said. Working with producers under private labels in both Asia and Europe, APS developed its own products, such as Viprene TPV, Zythane TPUs and Maxelast TPEs. With their industry knowledge, they've been able to recognize the strengths and weaknesses of suppliers in chemistry and processes. Volume in that business has grown to the point that APS is evaluating the potential of a supplier stateside.

"Right now, we're at the crossroad of having enough volume to start looking at a partnership in the U.S., or a manufacturing facility in the U.S., to start something over here, just to cut down on the long lead time on the supply-chain side," Morin said.

Building a network

APS relies on independent agents and sub-distributors to reach markets across North America, he said. The company has five employees working between the warehouse and administrative space in its headquarters, and a network of between 30 and 40 individuals representing its products across the country.

"We obviously have direct accounts, but it's a lot easier for us to rely on people of quality that have the relationship with the molder or the extrusion house to come in and say, 'You're using elastomers, I know this company that's pretty good.' Then we can interact to say what we can do, and we've been very successful in doing this," Morin said.

APS, which uses its small size to focus on smaller orders on tight turnaround, has market coverage for most of the U.S. in its network, Morin said. It has agents on both coasts, as well as the Southwest, and covers the Midwest from its now 20,000-sq.-ft. Romulus headquarters, in the same building it started in. It partners with distributors on both coasts to maintain inventory in warehouses on both ends of the country to keep shipping times down. APS does some work with Canadian customers, and with Mexican customers as long as the paying company is based in the U.S.

Maintaining supply

APS's margins aren't there to support salespeople traveling across the country for a box of material, he said. But in the last two years, the market has started requesting larger orders as supply has tightened.

"There were a lot of issues in the last year with force majeure in the industry and people not being able to get their materials on time," Morin said. "We operate in a very different manner, where we have the inventory on the floor at all times. A small customer that wants a few bags or even a box, if they call by noon, we can ship."

Where distributors often don't want to keep inventory, and have long lead times and credit processes, APS doesn't operate that way, Morin said. If a customer is looking to buy a small, specific amount of a material because of a contract, he'll sell them that quantity.

"I don't have a problem with that, and I'm not going to gouge them because of it," Morin said. "My previous life was as a molder, so I understand that when you have a contract, you have a job to do. You don't know when that job is going to repeat itself. You don't want to sit on material for six months or a year because there was a minimum quantity of a box, and you only needed 100 pounds out of that box."

Morin said APS has maintained its own supply levels during higher scarcity by working with more international suppliers that don't already have a presence in the U.S.

"Believe me, we don't put all our eggs in one basket," he said. "We have multiple suppliers of materials, and we're still looking at qualifying others, too."

In the last year, APS came close to doubling its business because it had already qualified suppliers in other locations as supply lines tightened, Morin said.

"We've done this long enough that we're not going to get caught with our pants down," he said.

As the volume of business has increased, APS has started to scale along with it, Morin said. Looking for a partner in the U.S. for domestic compounding and synthesis of TPU is one step. The company is also potentially searching for a larger space to work with beyond its headquarters, though it does also have the option to expand for a third time in its current building.

While APS is putting its efforts toward future development, it isn't doing anything special to mark the occasion of its 10th anniversary, Morin said. As some smaller companies struggle to make it through their second year, let alone their fifth, APS's agility and philosophy have pushed it past 10 years with more to come.

"We celebrate every day," he said. "We're doing our 10th year and we're profitable. We know what we're doing, and we can do this for a long time."