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North Bay Business Journal

Monday, September 3, 2012, 6:30 am

Innovation driving small companies

Castle of Petaluma, Blentech in Santa Rosa posting growth

By Loralee Stevens Special to the Business Journal

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    Often the health of an industry can be measured in the growth of small-to-mid-size companies rather than the very large corporations.

    Dick Herman

    Dick Herman

    And that is happening in the North Bay manufacturing sector, according to Dick Herman, president of 101MFG, an industry group.

    “Manufacturing, in the case of at least two North Bay machine makers, is leading the way out the doldrums,” he said.

    Castle Inc., a maker of wood joinery machinery, and food processing equipment maker Blentech, are moving ahead briskly, propelled by the fresh breeze of innovation.

    It was innovation that spurred the growth of 27-year-old Castle in Petaluma in the first place when founder Max Durney developed a machine to rout toe screw pockets. The slanted groove that holds the joinery screw in place is now standard in the cabinet-building industry.

    “He was building cabinets for a barbershop in Saudi Arabia and needed a way to stack and ship the pieces for easy assembly at the site,” said Castle President Annette O’Connor.

    Castle Inc.'s new pocket cutting/screw inserting machine

    Castle Inc.’s new pocket cutting/screw inserting machine represents a leap forward for the wood joinery industry.

    Wood joinery using dowels and glue is tricky, requiring perfect alignment before the glue is applied. Mr. Durney’s groove, on a slight diagonal, enables a perfect joint, she said. The Castle equipment, improved over the years, can drill four pockets in less than eight seconds.

    It’s the angle of the pocket and ultimately the quality of the joint that sets Castle apart from other pocket hole equipment makers who were quick to follow the company’s example. “But they never get it quite the same as we do. A deeper angle results in poorly aligned pieces,“ she said.

    Castle dominates the professional segment. Its customers are makers of cabinetry for homes, hotel furniture, store displays and recreational vehicles.  As such, the company took a huge hit during the housing crisis, bottoming out in 2009.

    “Cabinet shops were folding up all over the U.S. Suddenly there was a glut of used machinery on the market,” said Ms. O’Connor.

    It speaks to the quality of Castle equipment that none languished on the market. “It would appear on Craigslist one day and be gone the next, she said.

    But there were tough times for Castle. The company began to turn around in 2011, with a 21 percent increase in revenues. This year will see revenues increase by another 15 percent to 19 percent. Meanwhile, at five-employee Castle “we leverage the skills of 100s of local workers” in the design and production of the machines. Ms. O’Connor said.

    Meanwhile, Castle developed a new product, the first of its kind. The pocket cutter/screw inserter cuts production time in half, she said. At $50,000, it’s by far the most expensive piece of equipment Castle has ever sold; most of its products range from $1,000 to $6,000.

    “But it’s already selling. One of the first customers, a hospitality industry cabinet maker, has come back for a second machine,” said Ms. O’Connor. “Our dealers and distributors are very excited about it.”

    The new “CSI” machine saves nearly 40 percent of the labor and mistakes of the older hands-on process.  It could lead to the loss of a few jobs, she admitted.

    “But that’s what allows manufacturing in the U.S. to stay competitive with offshore operations,” she said.

    Blentech's highly efficient food-cooling unit

    Blentech has developed a highly efficient food-cooling unit with a much smaller footprint.

    Innovation also spawned Blentech in Santa Rosa. Founder Darrel Horn, inventor of the mechanical grape harvester, set out to improve the efficiency of industrial food blending and transfer in 1988, giving rise to an evolving line of food processors.

    Blentech recently took a close look at its operations with an eye toward improving customer relations, said COO Daniel Voit.

    “We began looking for opportunities to collaborate on the best use of our equipment to drive their business forward and eliminate problems. In the process we got a lot closer to our customers and our efforts have paid off in more sales and bigger contracts.”

    Collaboration had another positive effect: studying the needs of Blentech’s clients led to the development of a new highly efficient cooling machine, the Quadtherm.

    “It takes up three square feet and does the work of four traditional coolers, which take up 10 feet apiece,” said Mr. Voit.

    The $150,000 Quadtherm is undergoing rigorous validation testing currently. When that is completed, Blentech will be hiring more employees to manufacture it.

    Although the company didn’t suffer as badly as many in the economic downturn – the growth of fast food in Asia has buoyed its sales – the economy did spur some changes.

    “Most businesses cut back staff during a slump, losing talent and experience in the process. We decided to bring some of our outsourced processes in-house, giving us more control and speeding up turnaround,” said Mr. Voit.

    Blentech is now operating at “well over 100 percent of factory capacity,” with plenty of overtime for the staff, which has grown to 60 employees.

    Revenues are up to $11.5 million to $12 million from $10 million a couple of years ago.

    “Dialog leads to innovation, and innovation to more customers, offering the opportunity for more dialog,” said Mr. Voit. “It’s working for us.”

    For more information visit www.blentech.com or www.castleusa.com

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