Grand River Rubber, Plastics buys lathe

Jul 19, 2023

ASHTABULA, Ohio—When some companies zig, others zag.

Grand River Rubber & Plastics, the 100-percent employee-owned company that sits along the southeastern shore of Lake Erie, turned out to be the dance partner that ASC Engineered Solutions L.L.C. needed in the sale of ASC's lathe-cut division.

"The timing was right for both companies, as Grand River continues to grow and diversify its lathe-cut market segment ... and ASC desired to focus on molding in the future," Donald Chaplin, president of Grand River, told Rubber News April 4.

Grand River Rubber & Plastics—whose name belies its 100-percent rubber product portfolio—acquired the lathe-cut division March 16 from Exeter, N.H.-based ASC Engineered Solutions.

Terms of the transaction were not disclosed.

"It was just two companies who happened to compete in the lathe-cut gasket market," Chaplin said.

And if it seems like the Northeast Ohio area is a hotbed of non-tire rubber product production, it is.

The lathe-cut division purchased by Grand River is the former Ashtabula Rubber Co., which ASC bought in 2021. Grand River only acquired the manufacturing assets from ASC; the former Ashtabula Rubber employees will remain with ASC, Chaplin said.

Grand River itself was established by the acquisition of the Ashtabula division of Geneva Rubber in 1976.

No previous relationship existed between Geneva Rubber and Ashtabula Rubber, Chaplin said.

Now, coming out of a chaotic last several years, Grand River is back on the acquisition track once again, Chaplin said.

"Our companies have a commitment to producing quality products at a competitive price and on-time delivery schedule," Chaplin said. "Our focus during the due diligence process was to ensure that Grand River Rubber was the best option for Ashtabula Rubber's customers."

While Grand River saw about $53 million in net sales last year, the March 9 acquisition should increase the company's net sales in its lathe-cut division by "about 10 percent," Chaplin said.

The former ASC unit is located about two-and-a-half miles from Grand River's 135,000-sq.-ft. production facility in Ashtabula. The addition now gives Grand River about 40,000 square feet dedicated solely to lathe-cut product manufacturing.

"ASC will continue in molding, which we do not do," Chaplin said.

The acquisition also brings valuable intellectual property into the fold for Grand River.

"Probably one of the biggest things is the intellectual property and rubber formulations that are coming to our portfolio," he said. "There are many ways to get end results. It is interesting to see how chemists make their formulations over the years.

"And we are bringing on probably between 150 and 200 new recipes. Some we will put in play right away, some will take some time to digest and see where they fit."

For its compounding, Grand River maintains a joint venture with Wooster, Ohio-based Wooster Elastomers, as well as contracts with third-party custom mixing firms.

In terms of topical market segments, the acquisition of the former Ashtabula Rubber brings a number of commercial avenues for potable water applications and "some additional specialized niche customers."

"It gives us up to 23 market segments in total," Chaplin said. "The diversity of our market shares is what really helps Grand River Rubber—in normal times and during the pandemic.

"We are structured so that every product line is not down at one time."

Other lathe-cut gasket and seal applications include oil and fuel filters, Cam Lock couplings, food packaging and electrical transformers.

Raw material pricing has been "pretty slow to come down, if at all," Chaplin said.

"It's the same message there, what people thought might be transitory at one time is not turning out to be the case," he said. "There are too many high costs right now—from labor to utilities to logistics and packaging—and they are not coming down any time soon.

"And this was part of the reason for the acquisition—to get another layer with small steps for a lathe-cut line to cover."

Grand River saw about $53 million in net sales last year. Chaplin says the acquisition should increase the company's net sales in its lathe-cut division by "about 10 percent."

Chaplin noted that Grand River Rubber's ISO 9001-2015 production process will allow for a smooth transition and consistent supply in the coming years.

"Our ISO quality system is used to ensure success in transfer of products from ASC to GRRP," Chaplin said. "Each part will be qualified through our 'new job' procedures. We plan to enhance the customer experience and expectations before our first shipments."

By July 1, all orders will be made and shipped out of the Grand River facility in Ashtabula.

"Essentially the ISO certification puts procedures in place for onboarding new products," he said. "With all of the parts coming from Ashtabula (ASC) subject to onboarding, this defines the process so our customers know they are getting a 'same as' or better product."

Grand River served the medical market and the wastewater treatment industry "in a big capacity" during the pandemic with its lathe-cut line, using a precision extrusion and curing process, which maintains advantages over injection molding and die-cutting.

With lathe-cut, there are fewer tooling costs, smaller orders and the ability to make design changes easily. In addition, Grand River can handle rapid prototyping with a week's lead time with its in-house engineering support team.

Grand River uses mostly EPDM but works in a range of materials, from polyisoprene, nitrile and neoprene to silicone and polyether elastomers.

Nearly three decades of experience with virtually every department at Grand River earned Robert Nelson the title of lathe-cut production manager in 2020.

"Bobby has been an asset to Grand River Rubber & Plastics, continually driving innovation and efficiency across every department he has worked in during his 27 years here," Chaplin said. "His extensive knowledge of lathe-cut production, combined with his six years of sales experience, gives him a unique skill set to drive production, quality and value for our customers."

Nelson spent his first 20 years in the drum and pail division and lathe-cut gasket production. After two decades on the floor, Nelson went to the sales department where he worked until he became production manager three years ago.

Chaplin added that Nelson has helped expand the company's lathe-cut services in both in the U.S. and abroad.

Grand River now employs 205 people.

In 1976, Rick Selip (Rubber News' Executive of the Year in 1997 and 2014), Robert Jessup and Steve Knowles completed the Geneva Rubber acquisition and renamed the company Grand River Rubber & Plastics.

Industry experts like Keith Wyatt (formerly of Jasper Rubber Products Inc. and Enviroplas Inc.) have joined the executive ranks at Grand River Rubber, with Wyatt becoming chief operating officer in 2019.

With its precision cutting to within ten-thousandths of an inch, Grand River became known early on in the industry.

In 2001, the company entered the sweeper market with its flat belt division, and the next year began to sell its products in China, becoming a truly global company for the first time and gaining a large share, up to 90 percent, of the Asian market.

With the acquisition of the flat drive belt division of Flexaust Inc. and capital improvements of $2.4 million in the drum and pail manufacturing division in 2017, Grand River now serves all of North and South America, Europe and Asia, with a balance of both OEM and aftermarket customers.

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