Washington area boasts diverse industries

Part of a monthly series looking at economic issues facing small towns

WASHINGTON, Iowa - Agriculture has been a dominant employer in Washington and Washington County for more than a century. But manufacturers of medical devices, plastic parts and roof trusses also have flourished.

'We have a vertical supply chain in Washington County of services and products around livestock - mostly hogs and turkeys, but also dairy cows and goats,” said Ed Raber, director of the Washington Economic Development Group.

Washington is home to Bazooka Farmstar, a manufacturer of manure management systems for more than 20 years. The privately owned company at 800 E. Seventh St. was formed in 1976 with the merger of Bazooka Grain Handling Systems and Farmstar Manure Handling Systems.

'We've been focused on moving liquid waste through pumps and engines and a lay-flat hose over miles from a pit on a farm to fields several miles away,” said Eric Hahn, Bazooka Farmstar general manager. 'The liquid manure is knifed into the ground, which reduces the odor as well as runoff when it rains.”

Three years ago, Bazooka Farmstar began looking at supplying similar equipment to the oil fracking industry.

'Fracking has historically used an aluminum pipe to transfer water,” Hahn said. 'There was a need for a lower cost option using a lay-flat hose that we provide to the agricultural market. We had to change our equipment to fit the needs of the oil and (natural) gas industry.

'The ag sector typically uses tractors, while the oil and gas industry uses skid steers and telehandlers” - similar in appearance and function to a forklift but is more a crane than a forklift.

Hahn said the same John Deere engines and pumps that farmers use to move liquid manure two or three miles is used by the oil and gas industry to move water 10 or 20 miles.

'The amount of capital that the oil and gas industry needs to invest in our equipment is considerably more than what is needed in agriculture,” he said. 'We've gone from 22 employees to 80 in a few years.

'There was a lot of change and a significant learning curve in a fairly short time.”

With the sharp drop in crude oil prices, Bazooka Farmstar saw sales slip and reduced its employment to about 60 workers.

Hahn said Bazooka Farmstar's engineering staff is building on the company's core competency of moving liquids to develop additional products and markets.

'We're working with customers who want to work with us to troubleshoot ideas,” he said. 'We're also listening to customers and coming up with potential new products.

'Our owners are willing to allow us to risk a little bit and try something. Our research-and-development is a lot of ‘build it and try it.'

'You can only do so much with a computer. You can make it look good, but does it do the job it's supposed to do?”

Amanda Russell of Bazooka Farmstar's human resources department said the company has been able to hire skilled workers as it grew with sales to the oil and gas industry. Russell said a shortage of rental housing remains an issue in the area despite the construction of a new apartment complex in Kalona.

In addition to Bazooka Farmstar, other ag-related employers in Washington County include Greiner Buildings, Hogslat, Kalona Supernatural/Kalona Organics, JW Vittitoe Pork, Vittitoe Slat Flooring, Miller Hybrids and Syngenta Seeds.

Raber said there were four factories in Washington when he joined the Washington Economic Development Group in 1995 - McCleery-Cummins, Washington Manufacturing (now Whitesell), Modine Manufacturing and Crane Foundry.

McCleery-Cummins, which produced calendars, was the largest manufacturing employer in Washington with 200 employees when it closed in early 2004. Crane Foundry employed 70 when it shut down in September 2003 and the production of valves was moved to China.

Modine Manufacturing, which makes liquid charge air coolers, plate oil coolers and fuel coolers for the automotive, commercial vehicle and off-highway markets, announced plans in April to close its Washington plant over the next 24 months. The closing, which will see production transferred to a plant in Mexico to reduce costs, will affect approximately 245 full-time employees.

'Of the four plants that were here when I came to Washington, Whitesell will be the only one left when Modine closes,” Raber said. 'Whitesell, which has 70 employees and used to employ 180, shifted from manufacturing parts for the lawn and garden sector to making them for the automotive, appliance and other industrial markets.”

Although the pending closing of Modine will idle 245 workers, Raber said overall employment in Washington County has grown. The unemployment rate was 3.5 percent in April, down from 4 percent in April 2014.

Two other industries with plants in Kalona - medical devices and injection-molded plastic components - have enabled Washington County to maintain or grow employment.

Civco Medical Solutions designs, manufactures and markets imaging guidance and infection control products to medical equipment manufacturers such as GE Healthcare, Hitachi, Siemens and Toshiba. With headquarters in Coralville, Civco founded in Kalona in 1981, operates facilities in Kalona, Orange City, Rotterdam, Netherlands, and Ciudad Juárez, Mexico.

MD Orthopaedics in Wayland, founded in 2004 by John Mitchell, manufactures ankle and foot braces for the non-surgical treatment of congenital clubfoot. The device, developed by Mitchell, enables parents to slip the shoes on children while they are awake, then attach a bar with the proper spacing and shoe angle to gradually correct clubfoot while they sleep.

The non-surgical Ponseti Method, pioneered by the late Dr. Ignacio Ponseti of University of Iowa Hospitals and Clinics and Clinics, has helped children in the United States and more than 60 other countries.

In 2004, MD Orthopaedics manufactured 73 braces. Today, the company produces thousands of braces each year in a facility in Wayland that has been expanded twice to handle expanded production.

For more than 25 years, injection molded plastic parts have been manufactured at a 135,000-square-foot plant in Kalona that has changed names and owners over the decades.

Reza Kargarzadeh, founder, president and owner of Engineered Plastic Components in Grinnell, bought the Kalona facility in July 2007 after River Bend Industries had closed the plant two months earlier and moved production to facilities in North Liberty and Victor.

'Whirlpool Amana is one of our main clients,” said Mindy Taylor, EPC-Kalona human resources manager. 'We're also getting into automotive parts with Chrysler.

'We take resin pellets and melt them down to make injection-molded plastic parts.”

Mike Hall, EPC-Kalona director of purchasing, said the plant operates 24 hours a day, Monday through Friday. It employs about 175, up slightly over the past year.

'In eight years, Engineered Plastic Component has grown from two plants in Iowa to 16 plants,” Hall said. 'We have been able to acquire plants as well as opening new production facilities.”

EPC has manufacturing facilities in Alabama, Illinois, Kentucky, Michigan, Missouri, North Carolina, Ohio, Wisconsin and Reynosa, Mexico. Hall said the company has been able to capture market share from competitors through negotiations with customers as well as reducing overhead costs that affects pricing.

Taylor said EPC-Kalona has the usual employee turnover and continually accepts applications. She said the company initially was able to hire many of the people who operated the presses when the plant was operated by River Bend Industries.

'We're planning on incremental employment growth as new projects come in,” Taylor said. 'We have multiple generations of the same family working for us.

'As with any small town, it seems like everyone is related to someone down the road.”

Although Whirlpool Amana and Engineered Building Design produce very different products - appliances and roof trusses - both felt the impact of the housing market crisis when fewer homes were built.

'After we started in 1995, the housing market grew consistently and plateaued in 2002,” said David Mitchell, owner of Engineered Building Design in Washington. 'We had a very good 2004, 2005 an 2006. That was the ‘best of the best' so to speak.

'We could feel the market starting to go down in 2007, 2008 was worse, and 2009 was the worst of all. After the banking crisis in October, everything just shut down and we had to lay off a lot of people.

'We began to sense a little life toward the end of 2010. We saw business pick up in 2011 and 2012, and 2013 and 2014 were very good years.”

Engineered Building Design, which employs about 60, distributes its custom roof and floor truss systems for residential, commercial and institutional buildings through lumberyards within about a 100-mile radius of Washington.

Mitchell said freight shipping cost is important because that it restricts out-of-state competitors from entering his market. He said the factor also restricts his ability to expand beyond his existing market area.

'We can expand market share within our existing market by being better at what we do, but we're really at the mercy of the local economy.”

Mitchell said the labor market in Washington County is tight, but he has been able to hire and retain a good work force.

'I think this is a really good place to run a business,” Mitchell said.