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Kaydon expansion moves along

August 03, 2008

Item Staff Writer

Five days a week at a roughly 200,000-square-foot plant in Live Oak Industrial Park off U.S. 15 South, about 100 employees in three shifts manufacture bearings that primarily end up in windmills and wind farms or M-1 tanks.

Michigan-based Kaydon Corp. opened its first Sumter plant in 1976 and added a second facility in 1991. Though the manufacturing job base in Sumter and the remainder of the country has been through its fair share of glory and heartache through the past 30 years in a shifting global market, Kaydon has seen recent gains and expansions and is poised to grow its burgeoning wind-energy sector even more as increasing attention is placed on renewable energy sources.

Besides the two here, the publicly traded company has two plants in Mexico: one in Mocksville, N.C., and one in Avon, Ohio, which was acquired in October as part of a $55 million buyout of Avon Bearings Corp.

“The military has typically been a large portion of the business out here,” said Plant No. 4 Manager Randy Newman, noting that technology advances have fostered the viability of wind energy to become a growing source of “green,” or environmentally friendly, energy.

In early April, Kaydon announced a $4.5 million expansion that, when realized, is expected to create 10 new jobs and add 40 percent capacity to a line that produces bearings as large as 12 feet across, destined for windmills. The expansion will see the purchase of industrial lathes, heat-treatment devices and overhead cranes.

Newman, 43, who has been at the helm of Plant No. 4 since October, said the morale boost is palpable and underscores the company’s vitality.

“If I’m an employee on the floor and I see they’re putting capital back in the plant, well, that tells me they plan on being here a while,” he said, which serves to bring “more faith in what you’re doing. It gives you hope, it gives you job security.”Newman has put Plant No. 4’s customer base at about 49 percent toward military applications, such as tank turret bearings, and 51 percent geared to commercial uses. Each set of bearings produced at Plant No. 4 is composed of one yaw and three pitch bearings. The yaw bearing is shipped to General Electric’s Greenville facility for partial assembly, and the pitch bearings are sent to a Pensacola, Fla., plant owned by GE, he said.

Turning the giant propellers on wind turbines, Kaydon’s slewing bearings can measure between 8 and 14 feet across, and can weigh upwards of 10,000 pounds.

Just more than two years ago, Kaydon representatives announced a phased $11 million expansion that would start with $6 million in equipment upgrades and purchases to Plant No. 4, adding 35 jobs.

Jeff Manzagol, president of Kaydon’s bearing products group, called it a “major event for us” then, referring to wind energy as a quickly growing market that Kaydon has participated in since the early 1990s.

In November 2006, the company announced an $18.5 million expansion of Plant 12, with plans to produce bearings for computed tomography — or CT — scanners and airport baggage scanners. The large metal rings end up supporting CT scanners made by Siemens, Philips, GE and Toshiba.

According to a late June Kaydon Corp. report for the Deutsche Bank Alternative Energy Conference, sales by region — companywide — are 71 percent in North America, 19 percent in Europe, 7 percent in Asia and “other” accounting for 3 percent. Kaydon’s 2007 revenue, the report states, is broken down as 58 percent, or $261.7 million, coming from friction control products, which include custom thin section bearings, turntable bearings and split roller bearings. Applications besides the aforementioned wind energy, military and medical technology include heavy equipment.

This sector of Kaydon Corp.’s revenue has grown from $163.8 million in 2004 to $195 million in 2005 and $234 million in 2006.

Velocity control products — such as industrial and safety shock absorbers and gas springs that end up in robotics, and materials handling equipment, among other uses — accounted for $63.9 million last year, up from $56.7 million in 2006, $53.8 million in 2005, and $51 million in 2004.

Sealing products such as standard ring and seal products that may end up in aerospace or industrial processing equaled 10 percent, or $46.7 million, of Kaydon’s revenue in 2007. This sector has also seen steady gains — $42 million in 2006, $38.6 million in 2005, and $35 million in 2004.

The report shows 18 percent of Kaydon Corp.’s revenue stream coming from “other,” which equals $79.1 million. The designation includes filtration operations, a metal alloy company and a machine tool manufacturer, the report states.

“This is a record year for the plant,” Newman said, as long as it stays on track to meet its benchmarks.

The most recently announced expansion — “The meat of the project,” he said — will come to fruition in the fourth quarter of the year, which includes having manpower in place and trained on the equipment.

“Now is when the rubber hits the road, so to speak, for the preparation and planning of that project,” he said.

Newman and Plant No. 4’s Continuous Improvement Manager Chris Bossong have been busy on what they call “the Lean journey,” which is simply a plantwide effort to eliminate waste and increase efficiency in all areas. Bossong, 32, has been on board since March and jokes about adding to “the list” as he seeks to make improvements wherever needed.

“Every nook and cranny in the building, there’s opportunity” to streamline, he said.

A simple scrap pile of metals, for instance, saw a recent team cleaning effort and resulted in $18,000 gained in recycling, not to mention a more professional appearance.

“Kaydon recognized the need to continuously improve,” Newman said. “Chris has been a welcome addition. It’s a big plus and a change in mentality.”

Sumter Development Board President Jay Schwedler called Kaydon a “key player” in Sumter’s economy.

“They are now more than ever before a catalyst in driving our future economic base and job creation because of the recent investments in the community and in their facilities here,” Schwedler said, noting the wide variety of applications for its products.

“In fact, the recent announcement from the corporate headquarters of their product being a part of the Mars rover mission just solidifies the caliber of company they are. This company is one of our community’s businesses that is helping Sumter transition into a knowledge-based environment, and we are proud to have them here.”

Contact Staff Writer Joe Perry at (803) 774-1272.

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