Salem-Republic thrives in niche hose market, stretches into new addition

SEBRING, Ohio—The hose business is one where a wide variety of manufacturers can succeed.

Some are corporate giants that play in the global arena of industrial, hydraulic and automotive hose, where high-volume and wide ranging capabilities lead the way.

But there also is room in the hose world for smaller niche players to make their mark, filling specialty needs or taking on business that the larger firms have no desire to service.

That's the place where firms like Salem-Republic Rubber Co. can thrive. And officials at the Sebring-based manufacturer say business has been so good it necessitated replacing a large portion of its century-old site with a new structure that will allow for continued growth in the years to come

"It was definitely time," President and CEO Drew Ney told Rubber News. "That was a very expensive proposition to keep the old building maintained."

Plus, business has been good in all areas of Salem-Republic, particularly in industrial hose, but also in its rubber linings and calendering businesses.

Hose products used in mining, dredging and the steel mill markets have all done well. "I think we've become a leader in a couple of markets," Ney said. "I think we have a superior product. I think our product capability and product quality have really come to the forefront."

Salem-Republic also has found success in government and military applications, including for a jet starter hose that the CEO said is likely its biggest military market. It took awhile for the hose producer to qualify to supply these areas, but it eventually was able to meet the high standards.

"We really had to lean in and be much more technically precise to please the military and the government," Ney said. "We've had great success in those sectors recently."

And as Salem-Republic continued to see its fortunes rise, it decided now was the time to move forward with a plan that first was conceived more than a decade ago.

While some of the company's building dated back to as early as 1915, in 2012 it added 22,000 square feet. At the time, the firm designed the expansion so that it eventually could replace the majority of the old structure with a new building area for manufacturing, according to Senior Vice President James Grossi.

With the increased business along with the deteriorating condition of the old areas of the factory, it was time to pull the trigger.

"We paid off the 2012 addition, and it was 'OK, we need to do this,' because that old structure was literally falling down in some places," he said. "So rather than put hundreds of thousands of dollars into restoring it, it was time to do the second phase of our 2012 plan."

Design work began in the 2019-20 timeframe, and after the architects were able to put price tags to the design, Grossi said Salem-Republic focused on what it was going to do. He said that emptying the old building was a feat in itself, with work started in the fall of 2021 and continuing through the second quarter of 2022.

The company had 71,000 square feet of structure demolished, and replaced it with 62,500 square feet, with a deliberate cutout allowing for more efficient removal of waste. Total space at the Sebring site now is 185,000 square feet.

The new building is now up and the firm should have its occupancy permit by May or June. With a clean slate to work with, the new area will have work bays that are 60-65 feet between columns, compared to just 20 feet in the past. The old area, Grossi said, had just nine feet of clearance, while the center of the new building has a height of 36 feet, and is still almost 16 feet at the eaves on the east end.

"One of the key advantages right off the start for us will be receiving," he said. "With the dock over in the new structure, once it's fully operational we will be able to separate our receiving from our shipping. That's a huge advantage for us because with the growth rate we have seen for the past 10 years, we're now starting to trip over ourselves with incoming materials and outgoing orders."

Over the past three years, Salem-Republic has invested roughly $6 million to $7 million in demolition work, new construction and new equipment. But this isn't the kind of project where the firm will rush to fill up the new structure.

Some new equipment purchased in the past couple of years will stay where it is because it wouldn't make sense to move it, according to Grossi.

"We intend to bring in more new equipment," he said. "To fill that structure up with crane systems and new machinery is another huge undertaking.

"So the infrastructure is there. We'll start trickling in machine by machine, crane by crane, over the next three to 10 years."

Salem-Republic did buy a hose building machine that is semi-automated and was installed in late 2021, and has purchased a second one that will arrive sometime this year.

"It's newer machinery with higher technology that gives a better product," Grossi said. "And that's a lot of the reason we've been able to get into some of these markets that we've gained share in."

Ney said that while the investment is significant for a company Salem-Republic's size, it's definitely been worth it. Plus, he said he followed his father's conservative style of business, where the firm had the new business before it invested in the operation.

"It was the horse leading the cart," he said. "The growth of business led to this investment. We had to do it because we had too much business for the structure. It was a necessary investment."

Salem-Republic is looking to hire more people, but that can be a tricky proposition. Its employment now stands at about 77, compared to 54 roughly 18 months ago. Grossi said they'd like to add at least six more people on the floor right now, and another one to two for the office staff.

Like others in the industry, though, the manufacturer has run into such situations as no-shows for interviews, or others who work for a few days and then disappear.

"For every six hires, you keep two or three, and that's about the run rate right now," he said. "The people who stay past 90 days or six months, they usually are here for a long time. They start to get settled in with a good, privately held company, and they don't want to go anywhere. It takes awhile to get that relationship going, though."

For an industrial business like Salem-Republic, it's important to have top-notch distributors along with outside manufacturers reps that allow the firm to grow and expand, said Sarah Holt, vice president of sales and marketing.

"In addition to the contacts we have externally in the marketplace, it's also just building and maintaining those relationships, and truly valuing our strategic partners that we have in the industry," she said.

"Internally, we have a great staff, and we've expanded and relied upon our quality team, our engineering team, our manufacturing team, which includes every member of our staff on floor. Without any department, we're not really able to do what we do."

Having its calendering department ISO 9001-2015 certified has helped it build business not only for those goods, but in other areas as well.

"It's helped us to streamline our processes," Holt said. "We're ISO-certified in calendering, but also ISO compliant within hose. It allows us to strategically manage everything, and it also made our product more valuable in the marketplace."

Ney added that the trend to reshoring definitely has been a benefit for Salem-Republic. "There has been a huge movement back to domestic sources for American customers," he said. "I think it's been a very broad campaign and I think it continues."

He also is bullish on the firm's prospects for the rest of 2023 leading into 2024. "We don't see any change in the pattern. We're moving forward into our new facility."