New strategy sends plastics manufacturer into new facility

When Larry Stock moved his plastics business to Sparks from California in 1993 he swore he'd never move again.

But he was forced to relocate Polymer Plastics away from the industrial areas along the Truckee River after the business was flooded during the Great Flood of 1997.

"We had 22 inches of water in the building," Stock recalls. "When (the landlord) called me New Year's Day and said I was going to be flooded, I thought it was some sort of joke. This is the mountains, the desert you don't get flooded in the desert."

Stock did not have any flood insurance and suffered a loss of nearly $300,000.

The hassle of moving a manufacturing businesses must have faded, though, because Stock in April again relocated Polymer Plastics this time to Carson City, a move that required 98 truck-and-trailer loads through the Washoe Valley. Stock estimates he moved between 1 and 1.2 million pounds of equipment and materials at a cost of about $150,000.

But downsizing into space on Mallory Way has helped Polymer Plastics cope with the declining revenues that have affected the bottom lines of many regional manufacturing companies. Stock moved the company to Carson City in part to reduce rent after suffering a drop of $100,000 in revenue in the early part of 2009.

'The first quarter was traumatic," he says. "I'd dumped $100,000 in three months before we even knew what happened."

Despite layoffs and other cost-cutting measures, Stock searched for further ways to operate leaner. He'd been forced to stretch out payments to his vendors, yet he was sitting on several hundred thousand dollars worth of inventory.

Scrutinizing the business, he found that much of Polymer Plastic's revenue was generated on the East Coast or in Mexico, and the company typically was shipping directly from nearby factories to its customers.

"It was like, 'Why do we need a big building to house all this plastic that half the time we can't even afford to ship because the customers' locale is different?'" Stock says.

So he returned some inventory, and sold off a great deal more to other distributors and dealers at a return of more than $7,000 a month. The effort reached its peak at Thanksgiving normally the company's slowest time. As a result, Polymer Plastics ended the year with positive cash flow and a nearly empty facility.

With the large reduction in inventory, Stock decided he could house the company in a smaller facility. His lease also was up, and Stock says his former landlord was unwilling to negotiate a new lease at today's market rates.

The move from 24,000 square feet into 18,000 square feet reduced the manufacturing footprint, and Stock sold off unused manufacturing equipment as well.

"We basically repackaged the business based on what happened last year in the economy and the way the business has transformed," he says. "We don't need as much inventory because we aren't shipping from this facility as much as we used to. We are doing a lot more drop ships and East Coast shipments."

Realizing he needed to retool his business model was something that's saved Polymer Plastics over the years.

"The toughest thing to go through in life is adapting to change," Stock says. "In a business I've been in business 35 years you have to keep re-inventing every few years or the business will die."

Logistics aside, the move has been difficult in other ways. Orders keep coming in, but manufacturing equipment still needs to be properly set up. Stock estimates it will take up to three months to complete the move.

"Everything seems to ship one to three days late, "he says. "It just takes a lot of wheeling and dealing with customers and everyone else."

Stock founded Polymer Plastics in Redwood City, Calif. in 1975 after he was laid off from a sales job. But his friends were all former buyers, and they insisted on still buying products from him despite his attempts to charge commission or push requests off onto others.

"I kind of got forced into it," he says. "My degree is in industrial arts; I was going to be a shop teacher."