Custom Rubber Composites: Startup seizes upon the ‘onshoring’ movement in American manufacturing
If it looks like a duck, and it quacks like a duck– odds are, it’s a duck.
But sometimes if it doesn’t look like a startup or behave like a startup, it can still be a startup.
And that’s what Tim Gabhart and Mike Harlan have with Custom Rubber Composites, LLC., one of the few manufacturing startups in Louisville.
Located down Dixie Highway on Millers Lane in a warehouse complex that used to belong to the Phillip Morris Company, CRC holds 3000 square feet where they are using less than 15 percent of that to manufacture impact bars for heavy-duty conveyor belts. These belts are used in coal and rock mines, quarries and to load train cars and barges. And when CRC opened on June 1, it became the only U.S. manufacturer of these impact bars.
It’s not sexy, and yes, apparently we’re concerned with businesses being “sexy” now.
But it is cool.
Harlan and Gabhart use startup language to discuss their business. It’s not technology the way that most startups think of technology. This is hybrid material science.
It’s “lean manufacturing.” They contract their labor, they outsource their accounting to OPM Entrepreneurial Services, they hold very little inventory and produce to ship. Gabhart and Harlan focus on selling and scaling up.
CRC makes a single, niche-market consumable product. Impact bars are fitted onto impact beds to absorb the force created when heavy materials drop from one conveyor belt to another.
They currently make these bars pretty much on-demand. Because of Louisville’s central location, they can provide bars to most users in the Eastern U.S. overnight or pretty close. “As a job shop,” says Harlan, “we can crank them out in a more efficient fashion.”
Not only can they make them and deliver them quickly, they can do something no other manufacturer of these bars does: make them in custom sizes.
The bars are made up of three materials: a plastic top that allows the conveyor belt to slip across the surface smoothly, vulcanized rubber to provide a cushion for impact and a steel rod that attaches the bar to the impact bed.
CRC’s “special sauce” (see, startup language) is what their machines do to the three materials during the vulcanization process that binds them together.
These bars are consumables; eventually the plastic wears off. Depending on the conditions, this can happen anywhere from 2 months to 4 years after they’re installed. Bars cost around $200 each and each bed takes upwards of a half dozen bars.
Currently, just three weeks into the business, CRC is able to churn out 200-300 bars in a month and is looking at scaling up from there.
Gabhart says that there’s easily a demand for as many as 1000 bars a month out there. He’s not engaging businesses that he knows need more bars than he can currently supply.
Gabhart has been designing and fabricating impact beds at Innovative Conveyor Technology, a business he owns, since 1987. He has also been making standard impact bars and has carried one of the largest inventories of the imported bars in the country.
He knows these customers– the people who write the checks in the mining business or in the shipping business. He’s listened to their feedback and discovered their pain points.
Up until June 1, there were no impact bars being manufactured in the U.S. All of the bars were imported from India and China.
Gabhart calls these imported bars the “lowest common denominator” when it comes to quality. They’re thin, and they wear out quickly.
And most often, companies have to order the impact bars by the container-load and have to order the containers as much as six months in advance.
The long supply chain chews up much of the savings involved with producing these bars overseas.
Harlan sees what CRC is doing as contributing to the “onshoring” movement in American manufacturing.
Harlan says that Gabhart’s clients wish they could buy their bars from an American company, “not just because they’re patriotic,” he says, “but they can pick up the phone and talk to a real human being right here in Louisville if they have questions or need something.”
Every bar shipped– and they shipped their first pallet of 23 bars to Ohio on Tuesday– bears a “Made in the U.S.A.” sticker.
Harlan calls it “an unorthodox startup.”
CRC has “a known product instead of a speculative one, with known customers instead of uncertain ones, industrial manufacturing instead of another smartphone app, hybrid materials technology instead of IT and the Internet, and competition against imports from China, India, Malaysia, etc.,” he says.
Unorthodox too in its success so far. The entirely self-funded company’s pre-revenue stage lasted less than a month. Harlan projects the company could see $250-500,000 in revenue by the end of the year.
Depending on how the adoption rate goes, CRC could easily be a $4-5 million a year business with anywhere from 7 – 12 full-time employees. “It’s not going to solve Louisville’s unemployment situation,” says Harlan. But every little bit helps.
“It’s fun for me,” he continues. “I like the idea that in a small way we’re contributing to energizing the manufacturing economy in Louisville and in the U.S.”