Garco Building Systems, Washingtons largest metal-building manufacturer, is expecting to grow even more rapidly after racking up record revenue of nearly $35 million in 2005, says Bill Savitz, its president and CEO.
The West Plains company is looking at expanding its facility here in 2007and is taking a hard look at opening a new operation in the Ohio River Valley as soon as 2008, Savitz says.
He says the cyclical non-residential construction industry is on an upswing, and Garco could hit annual revenues of $50 million or greater in the next five years. December, when the company had $4.9 million in sales, was the biggest month it has ever had, says Savitz.
Theres some really great growth going on, he says. We are looking at adding another 60,000-square-foot building here in 2007, and maybe expanding into southern Ohio, Kentucky, or Tennessee in 2008.
The expansion here would likely generate an additional 30 to 40 jobs in Garcos manufacturing plant, and possibly 10 more office jobs, says Savitz. Currently, Garco employs 90 workers in its 140,000-square-foot manufacturing facility here, 50 of them welders, as well as 70 administrative, sales, and engineering staff members in a 15,000-square-foot office building. Both buildings are located on the companys 35-acre campus on Garfield Road, about a mile south of Airway Heights.
The potential in the Ohio River Valley, where market demand for metal buildings is nine times greater than in Spokane, is even better, says Savitz.
A new plant there could easily surpass this facility in size in a five-year period, he says. Garco is expecting to put salespeople in that area in 2007, Savitz says.
The company was launched as Garceau Steel Structures Inc., at 5503 E. Broadway in Spokane, in 1958, and altered its name to Garco in 1972.
It provides structural design services and fabricates steel-building envelopes, or exteriors, for churches, airplane hangars, steel mills, casinos, automobile dealerships, and other users. It primarily serves customers in 10 Western states and western Canada, but has shipped its products to Antarctica, Uzbekistan, Israel, China, and other parts of the globe, says Savitz.
We are the largest metal-building manufacturer in the state of Washington, and the only large such manufacturer with its headquarters west of the Rocky Mountains, he says. He adds that Garco has significant competition from steel-building manufacturers in Arlington and Sunnyside, Wash., and from large companies based east of the Rocky Mountains that have manufacturing facilities in California and Nevada.
We dont do interior partitions or stud walls, he says. We are a vendor, and dont really build things. We generally fabricate buildings, put our products in crates, and ship them out by truck. Occasionally, we send along a site representative to help with the assembly process, but we dont hardly do any assembly ourselves.
An exception came when Garco shipped to the South Pole two mobile buildings that were to be erected on structural skis and platformsand needed to be tested before being shipped to that harsh environment, Savitz says.
The only components of the structures Garco makes that arent fabricated here are 2-by-40-foot standing-seam roof panels supplied to Garco by a Tacoma company, Savitz says.
One benefit of the expansion facility Garco hopes to build at its complex near Airway Heights would be that it could then build those roof panels itself, he adds.
Savitz says Garco bought about 15,000 tons of steel last year, mostly from vendors in California, Utah, and Portland, Ore. That steel mostly came in the shape of 6-by-20-foot plates, 20-foot flat bars, coils of galvanized steel, and coils of painted steel used for exterior panels, he says.
Contractors are routinely hired to finish the buildings Garco fabricates, and Garco Construction Inc., of Spokane, an independent company formed from the original 1958 companys construction division in 1978, finishes many of those exteriors, says Savitz.
Savitz has been a Garco Building Systems employee since 1977, one year before the business moved from Spokane to the West Plains, and has been its president and CEO since 1996. He says the largest building Garco has fabricated was a 342,000-square-foot steel mill in Kalama, Wash. That was about a $5 million job for the company, he says.
The construction cycle
Savitz says that non-residential construction-industry revenue consistently follows seven-year cycles of growth, followed by three years of revenue declines.
He says 2005 was only the second year on the current upswing pattern, underscoring his optimism for projected industry growth over the next five years.
Prior to this years record revenue of $35 million, the companys previous high was $26.2 million in 2000, Savitz says. That was followed by three years of declining revenue, bottoming out at a three-year low of about $15 million in 2003, he says.
Savitz says about half of the revenue increase last year was due to the escalating price of steel, and half to an increase in market demand.
Our 2004 revenues were great (at $26 million), and 2005 was even better, says Savitz, who began with Garco as an engineer and advanced to a combination of engineering and sales work before becoming an administrator with the company in 1994.
Now, Garco Building Systems is owned by Savitz and three partners, who also are department heads of the company.
The companys current push is to complete its $5 million portion of a $600 million diamond-mine project under way in the Northwest Territories of Canada. The DeBeers Group, the worlds biggest producer of diamonds, is building that mine.
Garcos role in the project is to provide steel structures for three buildings that will total about 150,000 square feet of space.
Savitz says the best way to transport mining supplies some 200 kilometers from the city of Yellow Knife to the site of the diamond mine is to truck them on a frozen river, and the river will only remain sufficiently frozen to support loaded semi-trucks for about six weeks.
That means a semi-truck will be going up that river every eight minutes for about six weeks, Savitz says. About 130 of those trucks, each weighing about 40,000 pounds when loaded, will carry a total of about 2,500 tons of Garco steel for the project, he says.
Savitz predicts what he calls a conservative 5 percent revenue growth for Garco in 2006.
The company has no major projects yet inked to a contract in 2006, but he says he isnt worried. We have a large number of big projects in the works, primarily in Canada, Alaska, and South America, he says. He adds that most of those opportunities are associated with the mining industry, primarily gold and copper producers.
Impact of computers
For each project, Garco engineers, working with architects hired by Garcos customers, obtain specifications and basically design the structures individualized steel frameworks, says Savitz. We do the actual structural element design, he says.
Much of that work today is done on personal computers programmed for Garcos needs.
We have our own software analysis, allowing us to properly size steel members for load specifications, Savitz says. From our computers we can also generate drawings and download information for actual fabrication.
Now, we can do almost anything, he says, but it hasnt always been that way.
Until the 1970s, the company sold pre-engineered metal buildings with limited design flexibility for the customer.
That was followed by years when Garco engineers would design plans attempting to meet the desired specifications provided by customers, then submit those plans for input into a Boeing Co. computer in Seattle.
Garco used that computer on a lease basis to discover potential flaws in such plans, Savitz says.
Now, technological improvements to computers have freed Garco to create structural designs and to fabricate steel building envelopes on its own. The basic configuration of our buildings has remained the same, but now each one becomes a custom project, says Savitz.
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