Spokane Journal of Business

Colmac sees no letup in growth trend

Colville manufacturer anticipates more sales, employment gains in '13

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Colmac sees no letup in growth trend
-—Photo courtesy of Colmac Industries
Colmac employee Dave Taylor assembles a water-heating pump. The company began manufacturing the pumps in 2011.

Colmac Holding Co., a sizable Colville, Wash.-based manufacturer, is anticipating increases in revenue and employment in 2013 for all three of its subsidiary businesses, says company Chairman Scott McMillan.

Projected growth in those areas would continue a three-year upward trend for all Colmac companies, McMillan says.

This year, sales increases for Colmac Holding's four product lines—refrigeration equipment, water heaters, laundry equipment, and heating and cooling coils—have ranged between 10 percent and 40 percent and probably have averaged 20 percent so far this year. He hopes sales companywide will be up 20 percent again next year.

Located about 70 miles north of Spokane, the manufacturer operates on a roughly 200,000-square-foot campus that houses both Colmac Industries Inc., the laundry-equipment maker, and sister company Colmac Coil Manufacturing Inc., which makes heating and cooling coils. In 2009, Colmac Coil bought a roughly 160,000-square-foot plant in Paxton, Ill., that formerly was operated by Baltimore Aircoil Co., and formed Colmac Coil Midwest Inc. to operate that plant.

The products that the three companies make range in size from a small, three-foot heating and cooling coil to a five-section, 50-foot tunnel garment finisher used for laundry. The companies sell them mostly to industrial users, such as commercial laundry companies, hospitals, and hotels.

The three companies operate under Colmac Holding and employ a total of 215 people, with 150 located at the Colville complex and another 65 at the Illinois plant, which employed just 12 people when Colmac bought it.

"Since 2009 we've been on a growth pattern every year, adding on additional employees," McMillan says of the Colmac companies.

Next year, Colmac Industries hopes it will continue its trend of seeing employment rise by 10 percent annually, says McMillan, who also serves as CEO of Colmac Industries.

Cam Buffington, president and chief operating officer of Colmac Industries, and McMillan say they attribute much of Colmac Industries' growth to a combination of its strong presence internationally and product expansions, such as its adoption and production of water-heating pumps in 2011, which was formerly handled by Colmac Coil.

"By adding some new innovative products and expanding our reach globally, it's made a difference," McMillan says.

On average, he says about 25 percent of its business is to customers outside the U.S.

"Some years it's probably a little more than that; other years it's a little less," McMillan says. "It may grow more as we attend more of these trade shows."

This year, Colmac exhibited at a refrigeration show in South America, a laundry equipment show in Germany, and a heating equipment show in Dubai. The company is planning its budget for 2013 and is unsure of how many it will attend next year, but says it plans to continue to exhibit in an international arena.

McMillan says its sales markets have remained stable domestically. Improving its products and expanding its global reach back in 2009, McMillan says, has had a positive impact on sales at both Colmac Industries and Colmac Coil.

He says he's pessimistic about the economy, but the company's sales don't generally follow economic trends. Products it manufactures typically are ordered and used regardless of economic stability, he says.

"We're not a mass production house," Buffington says, adding both Colmac companies manufacture products that are built to order.

Philadelphia-based food service and hospitality company Aramark Corp., Disney Co., and the Dubai Airport are some of the more recently added Colmac customers, Buffington says.

McMillan points to several new patents of its products and new product lines as catalysts that helped the company increase its sales over the last several years.

For example, technology developed by the manufacturer in recent years enables machinery it makes to run off self-generated steam, meaning it doesn't have to use steam from a pipe system. McMillan says this new technology has enabled it to expand the market reach for its steam-dependent products, like its garment finishing tunnels. The technology doesn't require a boiler to generate steam, Buffington says, preserving heat and energy that might be lost in the boiler piping.

"It's all about pennies and seconds," McMillan says. If Colmac can make products for less while saving its customers time by using a Colmac product, he says, then it will continue to see upticks in sales.

He says Colmac dipped into the material-handling market by manufacturing vacuum air parts back in 2003, when it acquired the assets of Count On Us Corp., of Kansas City, Mo. An article published in the Journal of Business about that transaction said it included products, patents, and intellectual property.

"That's an expansion from our traditional role of finishing textiles," McMillan says.

Colmac hires technical employees from the Inland Northwest, but McMillan says people who can weld and have other technical skills may be in short supply in the coming years.

"There's some concerns of whether that local pool will be there in 10 years," McMillan says.

Its internal training program enables the company to teach necessary skills, McMillan says such as job-specific welding techniques, to people who might have limited technical knowledge. The training program is open to anyone who needs it, not just new employees.

"Some of our skills have to be taught anyway," McMillan says.

He says Colmac doesn't have any immmediate plans for expansion, but is continuing to explore acquiring other companies.

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