“The greatest risk is to do nothing” — a sign on Dave Culbertson’s desk. VESTAL — The year is 1967. Dustin Hoffman, who played the lead in the movie “The Graduate,” is pulled aside by a friend of his parents who wants to share one word — “plastics.” The idea is that the future will […]
“The greatest risk is to do nothing”
— a sign on Dave Culbertson’s desk.
VESTAL — The year is 1967. Dustin Hoffman, who played the lead in the movie “The Graduate,” is pulled aside by a friend of his parents who wants to share one word — “plastics.” The idea is that the future will be driven by plastic products.
David J. Culbertson, president of National Pipe & Plastics, Inc. (NPP), headquartered in Vestal, agrees. “This year, NPP will produce 300 million pounds of PVC pipe (polyvinyl chloride) and another 30 million pounds of polyethylene pipe,” notes the president. “Our 3,000 customers buy sewer pipe, plumbing and industrial pipe, pipe for electrical conduits, utility duct pipe, pressure-water pipe, and other products. Demand for plastic pipe keeps rising as the population grows and aging infrastructure needs replacing to ensure clean drinking water and safe sewers. PVC and HDPE (high-density polyethylene) are more economical, easier to install, last longer, and are … [impervious] to tuberculation (corrosion products on the inside of the pipe) and biofilms.”
To accommodate the increased demand, Culbertson has just completed moving his Vestal manufacturing operation into a new facility located in West Endicott.
“The company bought the 235,000-square-foot building and 45 acres about 10 years ago,” says Culbertson. “The rationale for purchasing the property was to relocate our operation in order to take advantage of lower electric rates then offered by the municipality. When it didn’t materialize, we looked at moving to Canada and Pennsylvania as alternatives. Fortunately, the rates have dropped and stabilized, which made the move to Endicott viable.”
The investment in the new facility is substantial. “The company is projecting to spend $25 million in capital investments, of which $7 million pays for infrastructure improvements such as a new electrical system, new silos, a chilled-water system, and a 70-foot-high blending tower,” continues Culbertson. “Another $18 million is allocated to investment in new extrusion machines to produce pipe faster and with a larger diameter (up to 48 inches) and in items like material-handling equipment. Add in the original purchase price of the land and building, and the total investment is $29 million … This Endicott plant now has 11 PVC lines, which will grow to 13.”
Extrusion is a process used to create objects of a fixed cross-sectional profile. In the case of pipes, plastic polymers are mixed according to a formula and drawn through a die to create the desired cross-section. At NPP, the extrusion machines generate a continuous piece by first heating the stock material, loading it into a horizontal hydraulic press, and drawing it through the appropriate die. After the pipe is formed, it is immediately cooled to assume a rigid shape (PVC) or a more flexible shape (HDPE), cut to a pre-determined length, inspected, and packed for inventory and shipping. Any pipe that does not pass inspection is recycled.
NPP also has a 150,000-square-foot manufacturing plant sited on 40 acres in Colfax, N.C. (near Greensboro), which has 12 extrusion lines. The plants have interchangeable production facilities, including duplicate die-tooling. The decision to produce in either plant is based on production schedules and the distance to the customer, since freight is a major business cost. Both plants run four shifts per week around the clock and employ their own maintenance crews. NPP has to keep track of 400 SKUs (stock-keeping units) to accommodate the various industry standards for pipe.
Key company statistics
NPP has a total of 550,000 square feet of manufacturing and office space and 102 acres in its three locations. Culbertson is the sole stockholder of both the operating company and of the real estate. The headquarters remains in the Vestal office, which utilizes 20,000 square feet of space; the remaining 145,000 is now available for lease. The company currently employs 300 people, with 180 of them located in the Greater Binghamton area. NPP was founded in 1970 and generates about $150 million in annual revenue. NPP sells its pipe primarily to the Northeast, Middle-Atlantic states, the Southeast, and the Canadian provinces of Quebec and Ontario.
“This is a very competitive business,” Culbertson opines, “made up mostly of national and international companies. JM Eagle is the world’s largest plastic-pipe manufacturer. Diamond Plastics is another major PVC-pipe producer (seven manufacturing facilities), and North American Pipe [Corp.], a subsidiary of Westlake Chemical Corp., is the second-largest pipe manufacturer in the U.S. We also compete against Royal Pipe, which is owned by Axiall, and IPEX, which is owned by Alianza. The reason we can compete effectively is because we are maneuverable. The management team can sit at a table in my office and make a decision inside of five minutes. NPP also forms long-term relationships with our customers and suppliers. The company is financially sound, and we … [run] lean, producing a quality product at the lowest cost. But most importantly, we treat people according to the Golden Rule. Our mission statement says: ‘To put God first and do the right thing.’ It’s all based on ethics and trust.”
Management team
NPP’s management team includes Culbertson as president, Matt Siegel as vice president, Michelle Suer as CFO, and John Sinowitz as director of operations. Culbertson received his bachelor’s degree from Purdue in 1973 and his M.B.A. from Ohio State in 1980. He worked for 20 different companies in 20 different industries before joining NPP in 1997 as the company’s CFO. He was promoted to president in 2003 and bought the business in 2004.
Siegel earned his bachelor’s degree in marketing from Juniata College with a certificate in finance and accounting from Rice University. He began his career with General Electric as a sales engineer and has worked for nearly two decades in the electrical, plumbing, and municipal-pipe industry before joining NPP in 2011. In his capacity as vice president, he has focused on diversifying NPP’s product line, expanding the service territory, and streamlining operations. Suer earned her bachelor’s degree in accounting from SUNY Oswego. She began her career as an auditor for a public-accounting firm before joining NPP in 1984. Suer has held positions in accounts-payable, payroll, as the controller, and was named to the position of CFO in 2004.
NPP was founded in 1970 by Robintech, Inc., which at one point owned 12 plants. The partnership dissolved in 1982 when the company was sold to the Buffton Corp. Buffton, in turn, sold the company to LCP Plastics, which also owned the Colfax plant and a facility in Ohio. LCP’s parent company, Hansen Chemical, filed for bankruptcy in 1992, and the business was run by the creditors until the last day of 1996 when Nissho Iwai Corp. bought it out of bankruptcy. The new owners bought another pipe plant in Georgia in 1999, but closed it in 2003, sold the building, and moved the equipment to North Carolina. Culbertson bought the business on Dec. 17, 2004. Nissho Iwai, which had changed its name to Sojitz Corp., was the seller. Culbertson was advised by Knox Securities Corp. and Mitsubishi Securities (USA), Inc., who acted jointly as the exclusive financial advisors.
NPP uses local professional support to assist the corporation. Johnson, Lauder & Savidge, LLP handles the accounting; Hinman, Howard & Kattell LLP offers legal advice; and M&T Bank is NPP’s primary banker.
The stock has been sold into a trust to ensure the continuity of National Pipe & Plastics. “I have a commitment to 300 families to guarantee the future of the company. That’s why I chose not to move out of the area, but to find a way to meet rising demand and to remain here,” Culbertson says. “We have grown steadily at 3 percent a year, and I see a future with 50 years of continual demand for plastic pipe. I am making marketing decisions [today] based on what the impact will be a half-century from now.”
Contact Poltenson at npoltenson@cnybj.com