Bobby Mitchell, Jr., president of Applied Ceramics, Inc., discusses growth, "green" and his company's plans for the future.
Diesel Particulate Filters by Applied Ceramics, Inc.
Founded in 1967, Doraville (Atlanta), Ga.-based Applied Ceramics, Inc. (ACI) produces alumina and zirconia kiln furniture and refractory material for use in the ceramic industry. Other product offerings include ceramic honeycombs for the environmental industry and a line of ceramic road markers. The company, which employs 120 people at its Doraville and Laurens, S.C., facilities, also operates a tool and die shop and an R&D catalyst lab.
To meet customer demand for its products, ACI recently expanded production lines at its Laurens facility-this on the heels of a successful expansion into the Chinese market. CI caught up with Bobby Mitchell, Jr., ACI's president, to discuss growth in a down market, the importance of "green" and the company's plans for the future.
Custom ceramic honeycomb.
Why expand now?
We've actually been expanding since my father took over the company in 1976, though on a much smaller scale. We've sped up expansion over the last 10 years because more capital was available, and we needed more capacity for new products and existing product lines.
We were expanding before the recession. In the early to mid-2000s, we didn't have enough capacity to meet demand. We didn't have all of the tools we needed to do all of the projects we wanted to do, so we expanded into China for strategic reasons. We expanded into Laurens for manufacturing space on the zirconia and alumina kiln furniture and refractory lines. We also needed space for a tool shop in Atlanta, and we needed space for an R&D lab.
We typically try to do one expansion project at a time so we can get the kinks worked out and move on from there. The fact that we were doing both the China and Laurens expansions across multiple product lines starting in 2007 led to a general feeling that we would slow down when the projects were through, and that happened to dovetail with the recession.
Ceramic honeycomb substrate.
What kinds of companies make up your current customer base?
Our customer base includes a broad spectrum of companies across multiple industries. We sell to the government and private industry. We basically sell to companies that use our products to make their products, or companies that use our products in their final product. For example, our catalytic converters can go into automobiles to reduce emissions. We also sell kiln furniture, which is used by our customers to manufacture or fire their products in their kilns, and brick, which is used to insulate those kilns.
Alumina saggers, part of ACI's kiln furniture product offering.
What services does your technology development group provide?
Since our Laurens expansion, we have a lot of tools at our disposal. We try to help our customers achieve their goals by using those tools, and oftentimes we can save a company more money than the cost of our parts. If we know what a company is trying to do, we can help get them there quicker and usually less expensively than if they were to just come to us for a product. We can certainly provide products, and we do on many occasions. But our niche is being able to work with the engineering staff of our customers to help them get where they want to go.
It's important to understand that we often partner with someone else when developing new technologies. Applied Ceramics is not necessarily the driver to market, but we play a role in engineering and development of the technology or products.
We're unique because we're so customer-focused. One customer needed kiln furniture and tooling, but they also needed a solution to their environmental control situation. We were able to supply them with three different product lines that wouldn't traditionally go together, which wound up saving them thousands of dollars. Creative
would be a good word to describe our company.
A customer might come to us and say, 'I want to improve my operation by increasing capacity and yields. I want to do something different-create some new products of my own to meet some demand in the market-and I need somebody who can help me get there.' That's where we come in.
Alumina plates, part of ACI's kiln furniture product offering.
What kind of equipment did you add during the Laurens expansion?
We were able to add three additional tunnel kilns and a periodic kiln; high-tonnage presses; additional die shop equipment; and a lot of laboratory equipment, which allows us to test and analyze things internally that we couldn't five years ago. We're able to reduce our costs by keeping a lot of things we used to outsource to contractors in-house. Doing more in-house also allows us to protect our intellectual property.
Permark® Raised Pavement Markers.
Has this expansion allowed ACI to venture into additional markets?
We've expanded into the diesel market by providing a diesel particulate filter, which goes into a diesel engine to reduce the emissions that are released into the air through exhaust. We also provide high- temperature alumina brick for kilns. In the past, we didn't have enough capacity to take on these types of products because they take up a lot of space.
In our case, expansion usually starts with a customer request. If our effort for a particular customer is successful, we'll offer the resulting product or service to a wider customer base. However, our brick offering came about in a different way. We could not get any brick when we were renovating the Laurens kilns to fire over 3000°F-the lead time from our supplier was too long-so we figured out how to make it ourselves. We've been making brick for our own use for a couple of years now.
How has your experience in China been up to this point?
Generally, great. China presents some challenges for us in terms of culture and, of course, translation, but it's been a great partnership. We have great partners, and that's key: we have good people to work with.
We're getting a variety of products from China, the main one being a regenerative thermal oxidation (RTO) substrate that goes into industrial systems. RTO product is something we couldn't make cost-effectively in the U.S. Eventually, products that we make in the U.S. will be re-sold domestically in China.
Applied Ceramics' new expansion in Laurens, S.C.
What is ACI's approach to "green?"
If there were no emphasis on green, our environmental business would not have much of a market. The whole drive toward green is a fundamental part of our business. The "greener" companies become, the more need there is for our company.
The biggest thing we've done over the past two or three years, internally, is to emphasize recycling material and waste. It used to be that we'd have five dumpsters of refuse taken away once a week; we're now down to one. We're not throwing away nearly as much as we did before because we've figured out ways to re-use things like zirconia, alumina and cordierite.
We've also changed the way we pack products to allow for more efficient use, and we've managed to reduce our power consumption by about half. We've smoothed out power spikes. We've done simple things like changing light fixtures and bulbs. We changed equipment. We didn't change equipment for the express purpose of reducing power consumption, but when we needed to upgrade a piece of equipment, energy efficiency was a key consideration.
Another green focus in our company is the reduction of natural gas usage. We have done everything from working with our vendors to better recirculate the hot air in the kiln to trying to minimize the heat loss coming from the kiln. We have rebuilt kilns and our kiln cars using our insulating firebrick, which also helps reduce our consumption due to firebrick's better insulating properties.
What are your plans for the future?
In our technology group, we always have multiple projects in various stages of development. Some things can take 10 years. Some things don't ever work. But we always have multiple items in the hopper at various stages.
Our technology development is off the charts because the recession has forced people to be more creative and take a new look at their companies and products. We have a lot of things going on that have the potential to become game-changers in various industries.
Generally speaking, all of our current projects center on the changing nature of our economy. Our customers understand that the rules of the game have changed; things that worked two years ago may not work five years from now. There's a general feeling among our customers that they need to get ahead of the curve so they don't get left behind. More than at any other time in my career, people are willing to talk about possibilities-how to reduce costs, improve value and increase sales capacity. It really is a time of great opportunity. We don't just supply products, we provide solutions-and service is our specialty.For more information, visit ACI's website at www.appliedceramics.com.