Loc Performance adding compounding to the St. Marys mix

ST. MARYS, Ohio—Loc Performance seeks to double its business by manufacturing rubber compounds for clients at an old Continental plant in Ohio.

The Plymouth, Mich.-based company purchased a rubber track plant in St. Marys from Continental Tire in December 2021 with the goal of eventually creating its own compounds. Now that the plant has been fully integrated into the company, Loc is taking advantage of its investment and the equipment onsite to expand its reach and increase revenues with both existing and new customers.

"This (Ohio) plant is now 50 percent of our business," said Tom McDonnell, Loc Performance's vice president of sales and marketing. The company is projecting $400 million in revenue in 2022, when including the new plant. Roughly 400 former Continental employees were transferred to become Loc Performance team members after the acquisition. Another 50-plus blue- and white-collar workers were hired by Loc Performance at its St. Marys plant since the start of the year.

The December 2021 acquisition included four large mixing machines, C-frame and high-volume lines, build lines and more. The St. Marys plant benefited from an additional $17 million in facility investments following the acquisition. Those investments further expanded capacity and increased efficiencies, McDonnell said. That has allowed the company to offer customers the chance to utilize Loc's skilled staff and advanced equipment to supply rubber compounds with the capability to mix rubber formulations to their unique product specifications.

"We have been optimizing operational efficiencies to allow us the ability to scale to capacity," McDonnell added.

Loc has an experienced team of expert compounders and chemists that can design specialized rubber formulations for custom applications. They are skilled in the art of developing compounds that achieve desired physical and chemical properties and meet processing parameters and cost targets, while maintaining optimal end-user performance, which the company feels gives it a competitive advantage.

The plant has 30 million pounds of annual open capacity, which equates to 2.5 million pounds per month. That is achievable by adding resources in human capital and purchasing capabilities. Loc already has the necessary equipment onsite to manage that workload.

"We looked at the opportunity to produce compounds for other companies differently than Continental," McDonnell said, adding that the German-owned firm was just looking to supply materials for its own internal needs.

Loc Performance is a full-service provider of driveline, suspension, Trackman track systems, rubber products, armor products and fabricated structures for vehicle platforms. The company sells direct to the U.S. government and contractors, as well as prominent vehicle manufacturers in agriculture, construction, mining, locomotive, mass transportation, and oil and gas industries.

The company's work for the military largely has consisted of military track systems for tank undercarriages, supporting such tanks as the Bradley, Hercules, M1 and others. In this capacity, Loc collaborates with large contractors such as BAE Systems, General Dynamics and Lockheed Martin along with the U.S. military directly.

One of the biggest areas of potential growth Loc envisions is manufacturing rubber tracks for the agricultural industry. It also supplies products to companies such as Case New Holland, John Deere and others. McDonnell said he is "bullish" on the agricultural industry because tracks are a much more environmentally and soil-friendly alternative on tractors and heavy equipment compared to tires. "The compaction that (tracks) offer is much more desirable for farmers," he said.

With that in mind, Loc has invested time and money to market its capabilities to the agricultural industry, including at industry trade shows and conferences.

Other targeted product lines for Loc's St. Marys plant include wheels and mouths on the undercarriage of heavy machinery; bladder bags, which help control water pressure in residential houses on a well system; and a variety of other components such as a hay roller that levels out hay for farmers. The company also makes construction tracks that are used for a variety of applications by construction companies.

The St. Marys Loc plant has provided mixed rubber formulations to a wide variety of product lines, including its leading track products, as well as tires, vibration control, conveyor belting, air springs, and various hose products. Other applications include marine and railway industries.

Loc continues in a growth mode, which could include further acquisitions if and when appropriate.

Meanwhile, the company is adding to its aftermarket products as well, despite ongoing supply chain challenges.

"The good news for us is that the market is desperate for what we provide," McDonnell said. "Very few companies our size offer these types of compounds."

In all, Loc Performance employs more than 1,000 professionals at its St. Marys plant, Plymouth headquarters and plants in Lapeer and Lansing, Mich. The Lansing location specializes in fabrication of armor products and houses two 1,205-ton presses that can bend 4-inch armor plates.

Loc Performance was 34th on Michigan's Fastest 50 list compiled in 2022 by Rubber News sister publication Crain's Detroit Business, and McDonnell anticipates the company might be in the top 10 within the next two years.