Employers Seeing Positive Signs

By K.J. Williams
The Daily Reflector

February 20, 2011 – Some effects of the recession appear to be receding, and signs of economic growth are in the air, experts and executives say.

Wanda Yuhas, executive director of the Pitt County Development Commission, said there are some good signs locally. “It’s incremental, but it’s positive growth. We are seeing small gains,” she said, noting, “It’s not a complete turnaround.”

The area is reaping the benefits of its broad employment base.

“Our long-term strength has been the diversity of our economy. We have a mix of education, health care, and we still have a good bit of manufacturing, which many communities don’t,” Yuhas said.

And there is some hiring taking place.

“We are seeing most of our employers starting to recover,” she said. “They are hiring people back who were laid off.”

John Chaffee, president and chief executive officer of North Carolina’s Eastern Region, said the 13-county area including Pitt lost 15,000 jobs in 2009. It gained about 3,000 jobs in 2010.

“We expect to see positive job growth continue throughout the rest of the year,” he said of 2011.

Chaffee notes the region is seeing growth in aerospace, including Spirit AeroSystems, a manufacturing facility in Kinston and Fleet Readiness Center East in Havelock, a civilian repair facility.

Pitt County should reap benefits from regional growth since it’s a center for medical services and retail, he said.

The effect of projected state budget cuts, however, is cause for concern, Chaffee said, due to the anticipated effect on state institutions, including East Carolina University, which has seen its research activity “dampened a bit since the university’s budget has been cut.”

On the plus-side, Pitt is poised to grow in the life science sector that ranges from biotechnology to pharmaceuticals, and in the health care and medical products sector, Chaffee said.

Executives of some of the area’s major employers also have shared their predictions for what 2011 holds. The outlook appears to be brightening, they said, and many hope to hire more employees this year if current trends hold steady.

Attends Healthcare Products Inc., Greenville

Michael Fagan, president and chief executive officer

The aging baby boomer population has fueled growth in the adult incontinent products industry, creating a boon market for Attends Healthcare Products Inc.

“Our business has been experiencing 10 to 15 percent sales growth year over year,” said Michael Fagan, president and chief executive officer.

In 2011, he projects the privately held company will see higher earnings and hire between 25 to 50 workers during the year.

“We’re expecting to increase investment in our production capacity,” Fagan said. “And over the course of the next year, we would expect to continue to add jobs in support of the extra production.”

Production was bolstered five years ago when N.C. KPS Capital Partners CHECK, a private equity fund that owns Attends, entered the picture, injecting more than $40 million in capital into the company to boost production capacity.

“For us, our market is directly linked to the aging of the baby boomers so we’re seeing pretty consistent increases in demand,” he said.

Attends is facing some business challenges despite strong sales, and increasing prices is a difficult move to make, especially when dealing with the institutional market.

“There’s a lot of inflation from commodity input costs,” Fagan said. The cost of the raw materials like pulp has risen, and is expected to continue spiraling upwards, with elevated prices through 2015. The rising price of oil and petroleum also impacts production costs.

DSM Pharmaceutical Inc., Greenville

Hans Engles, president and business unit director

DSM Pharmaceutical Inc. in Greenville began to experience a resurgence in its business about six months ago.

“The pharmaceutical industry is embracing the concept of increased outsourcing and that results in more inquiries for our services,” said Hans Engles, president and business unit director of the Greenville facility.

Companies like “virtual” ones have a product but lack the capital and resources to develop it, relying instead on companies like DSM to develop a process so the product can be used in clinical trials.

For cost-reduction reasons, demand has been on the upswing for the services provided by DSM from the pharmaceutical industry and from “virtual” companies.

“They’ve always outsourced and they are increasing the volume now because they have access to funding again,” he said.

Engles said DSM is now seeing some impact and have been hiring, but expects to ramp up more next year based on inquiries this year.

“We will see the full impact starting in 2012,” he said.

Jobs that will be available range from manufacturing operators jobs that require strong basic skills and six months of training to more specialized jobs for chemists.

DSM, the parent company of DSM Pharmaceutical Inc., held a global telecom meeting recently to tell employees about the company’s new strategy for growth. Details on the new logo and branding won’t be made public until after the shareholders meeting later this month, Engles said. DSM is headquartered in the Netherlands.

Mestek Inc., Farmville

Emerson Hobgood, plant manager

Mestek Inc. has had a plant in Farmville since 1974.

Under the division name of Sterling HVAC Products, the plant is included in a company effort to attract new customers to combat a flagging construction industry.

Emerson Hobgood, the Farmville plant’s manager, said Massachusetts-based Mestek Inc. has worked to increase its market share of the heating and air condition equipment sector.

The Farmville facility makes heating and air conditioning units sold under its own Sterling brand name and sold as other company’s brands to commercial, residential, retail and manufacturing customers.

“Our business normally lags behind new construction,” Hobgood said. The delay is due to the fact that heating and air conditioning is installed last.

“So once you see an economic recovery in construction, we’re going to lag behind six to 12 months before you seen an increase in volume,” he said.

Despite the construction slowdown, Mestek Inc. is forecasting a 10 to 15 percent increase in business this year, largely by adding more customers.

“The reason for that is we’re concentrating on increasing our market share, and that’s through new manufacturing representation as well as new distribution points,” Hobgood said. “We’re also working on new product development. … The green movement is what we’re concentrating heavily on to try to make air conditioning and heating units more effective.”

The expected uptick comes on the heels of two slow years that resulted in layoffs in 2009, and a company consolidation that closed several United States plants.

“We expect to stay just above flat to a small percentage up,” Hobgood said of 2011. As business increases, the Farmville facility will start to hire its temporary workers as full-time employees, he said.

Mestek operates nines facilities in the United States and Canada and two in China.

Metrics Inc., Greenville

Phil Hodges, president and chief executive officer

Business at Metrics Inc. has been increasing since mid-2010, following a 2-1/2 year dip.

“We finished last year ahead,” said Phil Hodges, president and chief executive officer. “We were up 11 percent over the year before.”

Metrics has a commercial side that manufactures some generic products, but its core business is contract work for pharmaceutical development, he said.

The company develops formulations for pharmaceuticals and for manufacturing clinical supplies, including the chemistry involved in the process, Hodges said.

The recession caused some of Metrics “virtual “ pharmaceutical companies that outsource much of their pharmaceutical work to close up shop when they couldn’t secure venture capital, affecting Metrics’ business.

Instead of layoffs, Metrics shifted its employees to the commercial side. That side also has seen growth recently.

Now, its pharmaceutical business is reviving. Hodges said one reason is “we’ve shifted our focus away from these clients to large companies.”

He also credits an improved economy. “I think there’s more money out there to be spent.”

Hodges said more business means jobs. “We have been hiring. We had gotten very lean over the 2-1/2 year slide.”

Most of those hires were for scientific staff. “We hire a lot of people out of East Carolina University, and primarily what we’ve hired is entry-level chemists,” he said, adding, “We’re in a very much wait-and-see mode. We hope to continue to have a few open positions.”

Overton’s Inc., Greenville

Mark Metcalfe, president

Overton’s Inc. mail order and retail market for marine and water sports accessories appears to be rebounding slightly as the economy strengthens.

“Last year was better than the previous year so we’re looking for continued growth,” said Mark Metcalfe, president of Greenville-based Overton’s Inc., a subsidiary of Minnesota-based Gander Mountain.

He said they’re hoping to see some improvement this year, but they’re not expecting a significant turnaround. “Our purchases are discretionary and as the economy continues to improve we expect to see increased spending on discretionary items.”

Metcalfe said while mail orders have picked up, it’s too early to predict this year’s sales. “We’re in a business where the peak season is May, June and July.

Top sellers at their mail order business and retail stores in Greenville and Raleigh include water skis and wakeboards, he said. “Things that make boating fun.

“During the recession, we saw people back off their purchase of water sports accessories, but we did not have layoffs,” Metcalfe said, adding they’re back to a hiring mode for graphic designers.

Practicon, Greenville

Scott Griffin, president

Practicon’s business plan has focused on an aggressive marketing strategy and new products to grow its business in a slow economy.

“We expect sales to be up at least 15 percent,” said Scott Griffin, the company’s president, of this year’s business. “We are a distributor of dental supplies, primarily mail order catalogue and e-commerce Internet is where most of our sales are.”

Practicon took a different approach during the recession. “Because the economy was down, we saw competition start to pull back from marketing, we decided to go the other way,” Griffin said. “Last year was our best year ever.”

Last month, Practicon hired five employees, four in telesales and one in production. At least two new positions will likely be added soon.

“Our catalogue is getting bigger as well. We’re aggressively adding a lot of new products,” he said.

Practicon also has developed in-house a line of products for dentists and distributors.

“We focus on finding and/or developing what we call practical innovations,” Griffin said.

The company was founded in 1982 by Griffin’s mother, Ann Page Griffin. She still has some involvement with Practicon, but Griffin and his brother, Brad, its vice-president, run its daily operations.

The Roberts Co., Winterville

Chris Bailey, president and chief executive officer

The industrial base that drives business at The Roberts Co. seems to be more ready to take on new projects today.

The Winterville company builds industrial plants, upgrades and expansions.

“We’re seeing an increased flow of inquiries and projects coming through,” said Chris Bailey, president and chief executive officer.

He said some of the business appears to be coming from pent-up demand.

“Things were so slow and so bad for the last couple of years, there’s a lot of catching up on projects they had postponed,” he said.

The Roberts Co. offers integrated engineering, fabrication, construction and plant start-up services for the heavy industry sector. It can supply an engineering group, steel plate fabrication services and a plant services group.

“Across the board, we’re hearing a little bit more optimism from our customer base,” Bailey said.

“There seems to be more projects building in the pineline and more activity than there was a year ago,” he said.

The company had some significant layoffs last year, but Bailey said he expects to reverse that soon.

“Our forecast would be on the positive side of hiring,” he said. “I think we’ll be adding people.”

The company could add some welders, fabricators and staff and management positions in 2011.

“I think this year will definitely be better than last year,” Bailey said.

Contact K.J. Williams at kwilliams@reflector.com or (252) 329-9588.