By Eric Peterson / CompanyWeek | May 03, 2016
La Junta, Colorado
La Junta, Colorado
Employees: about 80
Beginning more than a century ago as Berg Brothers, a Minneapolis metal shop, DeBourgh changed with the times before moving to La Junta in the early 1990s.
"DeBourgh used to make parts for Caterpillar and huge cranes," says Salo, "It was very heavy metal manufacturing and fabrication in the '50s, '60s, '70s." The company later was focused on fabricating metal lockers and pedestrian bridges.
After spinning off the latter business, the company had far too much space in Minnesota, so third-generation CEO Steve Berg began scouting for a new location. After looking in seven states, he found just the place in southeastern Colorado.
A vacant, city-owned factory was the right size for the locker operation alone -- 130,000 square feet -- so the company loaded up 80 trailer trucks and moved the company nearly 1,000 miles southwest to Colorado. "They had to find a lower-cost environment," says Salo. "Steve Berg went looking all over the country and found La Junta."
The geography changed, but the product didn't. "We only make welded lockers that are already assembled and ship complete," says Salo. The competition is largely imported lockers from Asia that workers assemble at a school or other installation site.
The differentiator for DeBourgh is "quality," says Salo, noting that warranties last one year to to the product's lifetime.
The primary market is schools. "That used to be 90-plus percent of our business, but it's not that core anymore," says Salo, noting that schools now account for about 60 percent of sales. The company also supplies lockers to the military and first responders that differ in terms of "size and function."
The company has grown considerably since its move to La Junta. After steady growth for nearly two decades, sales hit a wall in 2010. "We lag the general economy by 18 months or so," says Salo. "Now we're starting to see some growth again."
The underlying technology of lockers hasn't changed much since DeBourgh started making them in the 1930s. "The product offering is not changing very fast when it comes to school lockers," says Salo. "The big change is build to order, not build to stock," he adds. "That has been a huge change for us."
Originally from Finland, Salo met his wife while training for high-elevation marathons in Alamosa, then studied industrial engineering at CSU-Pueblo and joined DeBourgh in 2000. He helped the company transition to Lean manufacturing before owners Janet and Steve Berg promoted him to president in 2012.
The move has paid off. "It really has enabled us to do what we do today," touts Salo, "and we do it really well on the manufacturing side."
Challenges: "Our biggest challenge, no question, is seasonality," says Salo. "We have excess sheet metal capacity in winter and fall." During the summer rush, DeBourgh's staff swells to more than 100 employees, and it typically dips below 80 in the winter. Salo says he's looking to find supplementary markets for DeBourgh's services, i.e. "anybody who needs metal punched and formed and painted."
Opportunities: A new market in package delivery lockers, says Salo. "It's a market we think is about to take off." Shipping companies would deliver packages to lockers on residential porches or centralized in neighborhoods. "Making multiple attempts at delivery is so costly," he explains. "We're getting involved with several companies. It's really an emerging market."
A similar market is in-store lockers for after-hours pickup. DeBourgh is looking to partner with makers of electronic locks for there opportunities. "We are constantly seeking partners," says Salo. "If they have an electronic solution, we want to partner with them."
Salo also sees exports as a source of potential growth. "We're approaching the Middle East and having some success," he says.
Needs: Skilled labor. "I hear this from the whole state," says Salo. "It's hard to find qualified people and it tends to be that way for us. I think we've got a strong team, but it takes a lot of work." He adds, "The one important thing is finding somebody who wants to live in La Junta."
A second need: new sales channels. "We know how to make the stuff, but finding the sales channels is harder," says Salo. DeBourgh has strong sales channels in the educational market, he adds, but "it works well only with that market."