CEO Surefil working its way through Chapter 11
Surefil LLC, launched in Kentwood in 2006 to produce liquid products under contract to the personal care, homecare, beverage and medical industries, has announced it increased sales by $9.4 million in 2009, more than doubling its revenues from 2008 — despite having to seek Chapter 11 protection in mid-2009.
According to Bill Hunt, CEO and majority owner of Surefil, the company has continued to operate, increasing sales, adding employees and growing the company's overall profitability by $1.6 million dollars in 2009, over 2008.
The sales increase last year was “exciting for us, in light of the overall economy,” which began battering the company in 2008, noted Hunt. “The big increases were in the contract manufacturing area for health and beauty products, over-the-counter drugs and energy drinks.”
Launched with a $6.2 million investment, Surefil has 100,000 square feet of manufacturing and warehouse space in the 4500 block of Danvers Drive SE. Hunt, a former Amway employee, received help at the start in the form of a $3.7 million Single Business Tax credit from the Michigan Economic Development Corp., a $338,000, 12-year tax abatement from the city of Kentwood, and a $4.3 million allocation from the MEDC’s Private Activity Bond Program. At that time, he hoped the company would grow to employ 300 by 2011.
About a year ago, however, the company was down to about 30 to 35 employees, according to Hunt. Today, the headcount is between 65 and 70. However, Hunt said he expects the company to grow another 30 to 40 percent through 2010.
Surefil has built up significant strength in a couple of niches, especially bubble bath.
“I think we are, at this point, probably among the world’s largest bubble bath producers,” he said.
Some of the seeds of Surefil’s recent growth were apparently planted in late 2008 when a new company called Grand Brands LLC acquired the Lander brand. Lander Co. was started in the 1920s and became well known for its beauty and personal care products sold in more than 40 countries. By 2005, the former Lander Co. brands were the property of Ascendia Brands Inc., of Hamilton, N.J., which later filed for bankruptcy in mid-2008.
Surefil now produces and packs the Lander brand under contract to Grand Brands. Although Hunt’s wife, Sue, is president of Grand Brands, the Hunts have no ownership in it, he said.
Surefil also produces bubble bath for Meijer and Wal-Mart labels in the large, economy sizes.
Hunt said exports of Surefil products began in 2009, with shipments going to the Middle East, Europe and Asia.
“That’s been very successful for us,” he said.
The weakening of the U.S. dollar over the past two years has helped exports, he said, particularly the exchange rate with Canada. At one point in the past, it was about $1.30 Canadian to the U.S. dollar, but now it is about $1.02 Canadian to the greenback, making U.S. products cheaper for consumers in Canada and overseas.
While the economic climate has proved challenging in the last two years, Surefil attributes the increase in sales to its dedicated staff, plus cost-cutting strategies and launching new services and products. Besides the large retailers already mentioned, Surefil products can be found throughout West Michigan, including hand sanitizer at Spartan Stores, and shampoo and conditioner under the Advanced Healthcare Products label at CVS stores.
“We found our supplier base to be very supportive and very encouraging” during the bankruptcy proceedings, said Hunt, adding that the key to survival has been finding customers “that are growing and doing well.”
“We don’t extend a lot of credit,” he said. “The credit crunch is still real; we’re looking for cash-rich customers in the growth mode.”
Companies that can “pay cash in advance, or pay cash with shipment — or in any case, pay very timely, without extended terms — those are the customers we need to be working with. And they are out there; you just have to look a little harder.”
Before the recession, Surefil relied on banks to extend credit for purchase of materials, fund receivables and finance new equipment. Now, he said, if a new piece of specialized equipment is needed for a particular customer, Surefil can sometimes persuade the customer to invest in that expenditure.
“So we really are relying on the customer base, more than anything,” he said.
Surefil previously worked with Huntington Bank and that relationship continues, he said.
“They are rightly conservative, and that’s the situation with most companies and their financial partners,” said Hunt. “Credit is tight and the world is very conservative right now. I expect that to continue for the rest of 2010.