UltraShred LLC, a 5-year-old Spokane Valley maker of truck-mounted document-destruction equipment, has formed a business alliance with Rahco International Inc. and is moving to the longtime Spokane industrial manufacturers North Side complex.


UltraShred, which now sells about 10 shredding trucks a month to record-storage companies, entrepreneurs hoping to take advantage of the fast-growing document-shredding industry, and recyclers, says it hopes to expand its operations greatly and wants to use Rahcos expertise in engineering, design, and international sales. Rahco, known mostly for the highly specialized mining and canal-building equipment it sells all over the world, wants to diversify its revenue base so its less dependent on big projects for its revenues.


In this case, its a good fit, says Rahco owner Richard Hanson, who adds that he likes the potential for growth in the document-shredding industry and thinks UltraShred definitely has got a technology that is better than most.


UltraShred currently is moving its operations from 910 N. Thierman, in Spokane Valley, to Rahcos 50-acre campus at 8700 N. Crestline, says UltraShred President and CEO Stacey Ewton. There, it will operate rent free and will work with Rahco to determine the best way to manufacture UltraShreds big mobile shredders and to market the products internationally.


In exchange, Rahco will get a percentage of the net profits UltraShred earns from the future sale of trucks, Ewton says.


If UltraShred is successful in meeting its goals under the new alliance, it expects within five years to have annual revenues of $40 million and employment of between 60 and 100 workers, mostly in Spokane, she says. The company currently employs 10, but expects to add some additional sales staff members soon.


Currently, UltraShred buys most of its truck chassis from Freightliner and contracts with other manufacturers for some of the body and shredding mechanisms needed for the mobile shredders, then does assembly and some fabrication work at its 16,000-square-foot shop on Thierman.


Under the new business alliance, Rahco might end up manufacturing the bodies and shredding mechanisms for UltraShred or helping it find less-expensive vendors for them, Hanson says.


With their help we will be able to manufacture at the lowest cost and highest quality, Ewton says.


Rahco, says Hanson, will act as a business incubator for UltraShred, giving it the opportunity to grow without having to absorb the major costs of constructing a new manufacturing facility. With nearly 60 years of experience in industrial manufacturing, Rahco will be able to handle Ultrashreds projected growth at its site, Hanson says.


Ewton says UltraShred has a patented shredder that reduces paper products almost to dust. It sells its trucks via the Internet, at trade shows, through its marketing staff, and through advertising.


In recent months, UltraShred has been selling eight to 10 trucks per month at an average price of $198,000 each, says Ewton. She declines to disclose the companys annual revenues, but says the document-destruction truck market overall is growing in excess of 30 percent a year.


Ewton and Hanson both say that through the alliance the two companies will seek to establish an international market for the large, specialized trucks. Rahco has decades of experience selling its products internationally. Currently it exports about 90 percent of its products.


UltraShred will continue to maintain its own marketing, sales, and customer-service functions.


Meanwhile, Hanson says the alliance could help Rahco meet a goal of deriving at least 40 percent of its revenues from products that commonly are bought at any time, rather than from one-time contracts to serve big projects like the development of a mine or construction of a canal. Currently, nearly all of Rahcos revenues come from such big projects, and because of that the companys annual revenues fluctuate significantlyin recent years between $15 million and $40 millionas does its employment.


Rahco employs about 100 people.


Hanson says the company has been taking other steps to smooth out its revenue fluctuations, including having added to its product offerings a small, specialized road grader that it sells for about $100,000. It now also is looking at producing a mobile hydraulic crane, the design of which it believes is different from others made in the U.S.


UltraShred originally was located in Airway Heights, but moved in 2002 to its Thierman Road location.