International markets fuel strong growth at DIS | nnbw.com

International markets fuel strong growth at DIS

John Seelmeyer
jseelmeyer@nnbw.biz

It’s no coincidence that the four clocks in the conference room of Dynamic Isolation Systems display the current time in Reno, Istanbul, Tokyo and Santiago.

The maker of rubber-and-steel bearings that help bridges and buildings withstand earthquake shock is growing fast in its international markets.

In Turkey, it’s selling hundreds of bearings to retrofit long stretches of a freeway and protect it from earthquake damage.

Japan, meanwhile, is among the largest of the company’s 15 foreign markets as the builders of hospitals, condominium towers, power-generating plants and other high-value structures put into practice the lessons of the major 2011 earthquake.

And Santiago is the center of a fast-growing South American market for the products that Dynamic Isolation Systems manufactures at a factory at Tahoe Reno Industrial Center.

The company has grown from 17 employees last spring to 62 workers today, says President Konrad Eriksen.

Those workers layer thin doughnuts of rubber and steel, which then are molded under the pressure of presses with capacities ranging from 200 tons to 4,400 tons.

The company makes between 2,000 and 3,000 bearings a year, almost all of them custom designed for a specific application, says Eriksen. The price? About $1,000 for a little one, as much as $40,000 or more for the big ones. Dynamic Isolation Systems has mades bearings as big as 5 feet in diameter.

The company’s fast growth, however, brings problems of its own — particularly as it faced a balloon payment on the mortgage for the 102,000-square-foot building it shares with a sister company.

It’s getting some breathing space from a partnership of Heritage Bank of Nevada and the U.S. Department of Agriculture.

Executives of the bank and the USDA Rural Development said last week they made a $5.6 million loan to refinance the mortgage on the building that houses Scougal Rubber Corp. as well as Dynamic Isolation Systems. The two companies share ownership.

Between them, the two companies employ about 170 with a payroll of close to $7 million a year in Storey County.

The refinancing removed a major uncertainty for Foley Tahoe-Reno LLC, the company that owns the building. Seattle businessman Tom Foley, a top executive of Dynamic Isolation Systems and Scougal Rubber, also controls Foley Tahoe-Reno.

The problem, company executives said, was this:

When Foley Tahoe-Reno financed the newly constructed 100,000-square-foot industrial building on Denmark Drive in 2010, the loan called for a balloon payment at the end of its term.

But appraised values of industrial properties in the region have fallen, and the company faced two equally difficult choices — selling the building or coming up with cash to cover the difference between the loan value and the appraised value.

The loan that Heritage Bank of Nevada made to refinance the building includes a guarantee through a business-and-industry program of USDA Rural Development.

Tom Traficanti, executive vice president and chief credit officer of Heritage Bank, said lenders at the Reno-based institution put substantial time into understanding the value of the building as they considered refinancing the mortgage.

It was specifically built to meet the needs of the manufacturing companies that it call it home. Concrete floors, for instance, are much thicker than those in neighboring warehouses, mostly to support the heavy presses that Scougal and Dynamic Isolation Systems use.

Sarah Adler, state director for USDA rural development in Nevada, said the loan guarantee made by her agency fits with its priority to encourage growth of manufacturing in rural areas.

And Dynamic Isolation Systems helps build exports from the state. About 90 percent of its revenues are generated from foreign markets.

Scougal Rubber, its sister company, makes large rubber-and-steel pads that are used in bridge construction. The pads allow steel girders to support traffic loads and deal with the stresses of temperature change.


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