GCP Elastomeric continues to exceed expectations

KITCHENER, Ontario—When Gary Mottershead founded GCP Elastomeric Inc. in 1999 with commercial rubber sheet as its only product he figured the business would have a short shelf life.

"I thought as international trade continued to open and become more accessible, we would find it tough to continue to compete," said the president of the supplier of numerous rubber goods, including parts that are molded or extruded.

He was wrong.

"What I underestimated at the beginning of this business was the immense value of relationships with both customers and suppliers," Mottershead said. "Others can talk a lot about the technical side of things, but one of the reasons something works is because you build a relationship."

Today, GCP, now known as GCP Industrial Products, is a thriving business that produces all of its products by contracting production with more than 30 manufacturers, both in the U.S. and abroad. It specializes in large volume custom and standard industrial products.

It outsources manufacturing to GCP approved suppliers "after we've certified their facility can produce products to North American and European standards," according to Nathan Pike, vice president of GCP.

Headquartered about an hour west of Toronto in Kitchener in a facility that houses its sales and marketing, operations and technical development units, the company also has an office in Suzhou, China, that serves as the center for its quality control and production management team for contract manufacturers that produce its products in China and throughout Asia.

GCP employs 16 full-time staff members at its Canadian and Chinese facilities. It also has five sales representatives who are geographically located in Kelowna, British Columbia; Newcastle, Wash.; Portland, Ore.; Houston; and Queretaro, Mexico.

"Our success over the past 20 years has led us to work with many different customers—from small independents to multinational corporations," Mottershead said. "We now have several multi-million dollar product lines and supply more than 20 million pounds of product annually. We are also the largest importer of industrial sheet rubber into North America."

That isn't the only reason the company has survived and grown steadily. "We have worked closely with our strategic partners to develop four key product lines: National Silicone, Premlene Sheet Rubber, Rubatex Sponge Rubber and Enlast Engineered Structures," Pike said.

Silicone expansion

National Silicone is GCP's newest product line. Formation of the brand in 2015 "was a relatively organic process," according to Pike. "In 2012 we purchased the international property, formulations and molds of Rubatex, a very recognized name in the rubber industry. At the time we weren't sure what the total value and return would look like. Our focus was getting Rubatex production back up and running.

"The overwhelming positive response we got from people we talked to about Rubatex led us to believe, much like the consumer market, brands can hold a tremendous amount of value in the industrial market as well. From that recognition, we also felt that forming a brand for our silicone product line could help us build trust in the marketplace, inspire our internal team, generate new customers and create long-term value for key GCP customers and vendor partners."

The company has been supplying commercialized solid silicone and silicone sponge sheeting to the market since 2005 and has continued to expand its product range since then. As silicone sales grew, Mottershead said, the transition into a branded product line in 2015 was a relatively easy decision from a marketing and technical standpoint.

"We knew the material would perform technically," he said. "The only question after that was to understand if the market would accept a new supplier."

Four years later, with the business growing at a 60 percent clip year over year, he said, the answer is yes.

"We can now quote a wide variety of molded and extruded parts from GCP approved partners in North America and Asia, depending on the customer's requirements," Mottershead said.

The latest addition to National Silicone's product mix is silicone base for molding and extrusion. "By adding base to our product mix, we feel it completes our silicone offering," he said.

GCP approved manufacturers in North America and Asia produce molded and extruded silicone parts, Mottershead said, "which allows us to provide silicone users the best combination of performance, cost and product availability."

Over the last year there has been significant disruption in the North American marketplace, Pike said, and, as a result, National Silicone has become a viable alternative source for silicone buyers.

He noted that National Silicone's solid and sponge sheet lines consistently gain traction in North America. "Supported by consistent quality, availability of U.S. inventory and significant investment in new product development, we've increased both lines by a combined 150 percent in the past two years."

National Silicone serves a variety of markets, including aerospace, agriculture and dairy, automotive, construction, electrical and electronics, energy, food and beverage, LED lighting, mass transit, medical, oil and gas, and solar.

In the future, Pike believes National Silicone will experience considerable growth. "Our current focus is to deliver a high quality, competitive product and support our key distribution and converting partners in the U.S.-Rubberite Cypress Sponge and Stigall Industrial Products."

Longer term, he said, the company's focus will be threefold: Invest in increased capacity to support growth of the business in terms of current product lines; expand its product offerings and material capabilities; and "work to understand the changing market landscape for silicone and how it is used in an effort to keep pace with evolving customer and industry needs."

Regarding GCP's other brands, Pike added, each has its own operating plan and objectives that are focused on growth providing value to shareholders.

Lean operation

Mottershead said the company believes in being a lean organization that is cost-efficient. But it has a long reach.

"We've got a great team of people, and we've been able to prosper collectively because we collaborate on projects and take on new challenges as a team," he said.

Because the company's Canadian and Chinese sites are located within about an hour's drive to international airports, the company has the ability to reach any destination it serves inside of 24 hours, Pike said.

GCP's China office "represents improved quality control sourcing and product development capabilities, order management capacity, greater logistics control, and enhanced communications with our partner manufacturers in Asia," Mottershead said. "With quick access to our partners we can more accurately relay information on order statuses, production updates, logistics timing and product development to our customers.

"Of course, the most significant benefits our customers receive are consistent quality and improved lead times. By having dedicated personnel acting in the role of factory production managers, they can devote their time to quality and production related matters."

Pike said the company's rubber operation serves the needs of customers in North America, Mexico and Europe. It supplies products from three continents, providing sheet rubber, sponge rubber, silicone rubber, engineered rubber and conveyor belting to numerous markets, including agriculture, automotive, construction, food processing, forestry, general industry, heavy truck, mining, oil and gas, plumbing and transportation.

Molded products it supplies include bellows, diaphragms, gaskets, O-rings, seals, metal and plastic parts bonded to rubber, and parts with PSA or adhesive, he said. Extruded offerings include cording, profiles, rectangular sections and tubing.

Strong support

In conjunction with its other moves, GCP also has created a service business that supports customers with new product development, quality assurance and supply chain management.

Sourcing and product development are key capabilities within the service side, Mottershead said. In 2008, the firm began offering what it called the Risk-Free Sourcing Solution, that he said is designed to eliminate the complexities of offshore sourcing and supply for distributors and manufacturers.

"This fee for service, combined with our product brands, places GCP in a unique position to add value to our customers," according to Mottershead. "Improved quality, new products, streamlining their supply chain and better communication were the benefits of RFSS. The result of this innovation was and still is greater opportunities and growth throughout GCP's network."

To support its contract manufacturers, GCP has research and development teams in Kitchener and Suzhou, China, which allows the company to be close to the marketplace for new product development often done in partnership with North American customers, Pike said.

"It also allows for on-the-ground R&D support for our manufacturing partners in Asia, where our Suzhou team can work in conjunction with the engineering and technical teams overseas," he said. "Both are critical pieces to assure a new product will be commercially successful."

GCP works with the producers of its products to develop compounds that meet the needs of the firm's marketplace, he said. For instance, National Silicone's compound is produced at a former Dow Chemical joint venture plant in China. Pike maintained that it is the largest silicone compounder in Asia with production capacity of 150,000 tons.

By partnering with National Silicone, he said, the compounder has been able to expand its footprint in North America. The facility it operates employs more than 1,000 and the business continues to invest in new equipment and capacity while increasing its technical capabilities, he added.

Looking ahead, Mottershead anticipates the service side of the company will be expanded to incorporate new technologies. "We are investigating blockchain to bring greater security and transparency to international transactions. Artificial intelligence, I believe, will be used to help predict customer demands, so that we can significantly shorten the time from order to delivery."

In addition, he said, GCP has been closely following developments in 3D printing or additive manufacturing "as a viable alternative to the existing large factory model." He noted that complex products would be produced on demand, close to the customer, eliminating lead times, transportation, duties and minimum volume requirements.