Grand Prairie, Texas
Master woodworker Torben Helshoj founded Laguna Tools to solve a problem of his own. "He's an artisan when it comes to woodworking," says Rosenberger of Helshoj's award-winning skills. "He realized there was something missing in the U.S. market for woodworking tools at that level."
Looking for functionality as well as aesthetics, Helshoj subsequently designed a bandsaw and worked with an Italian manufacturer to build the machines. He then expanded into other classic tools like sanders, lathes, and table saws.
Tool manufacturing later moved to Asia. "That move was driven by cost," says Rosenberger. "Our customer base wasn't willing to pay what our cost was for an Italian or European version of a machine." He notes, however, that the company still sources some of its product line in Europe.
The company quickly found a fertile market with hobbyist and professional woodworkers, then expanded into the industrial market with increasingly robust woodworking equipment. Today, Laguna Tools also makes CNC routers and lasers. The company continues to handle design as well as CNC assembly in the U.S., relying on a global supply chain.
Explains Rosenberger: "There's two components to our business. There's traditional woodworking equipment, which is how the company was founded, and those products are designed here in the States, no different than what Apple does with their iPhone. We do it here and then we send it to a factory in Taiwan, and they basically make the functionality of the machine with our design."
He continues, "The part that's done in Grand Prairie is our CNC business, where it's all automated equipment. We buy the structure of those machines from China, then we source components throughout the world to finish those frames from China in Grand Prairie."
Rosenberger adds that most of the company's competitors are sourcing from the same global suppliers.
While woodworking remains the core of the business, Laguna Tools has expanded into equipment for working with metal and composites. "You can change the cutting head and modify the machine a bit and obtain the ability to cut a different material than wood," says Rosenberger.
He notes that the company's acquisition of Dake Corporation in 2019, combined with its line of metal-working equipment, is enabling Laguna Tools to gain traction in the metal industry with robust machines at great values.
"There's primarily R&D out of [Dake]," Rosenberger says. "They do some of the special products they manufacture there still, but we've shifted a lot of the standard products to the Grand Prairie facility."
Laguna Tools sells to manufacturers of all sizes as well as individuals. Rosenberger says the company has seen growth with hobbyists and women, as well as a wide range of companies serving the construction and signage markets. He notes of the latter customers, "They've grown, and they want to automate, they want to cut costs, and they don't want to rely so much on labor."
The company relocated its headquarters and production from Irvine, California, to a 120,000-square-foot facility in Grand Prairie, Texas, in 2020. Laguna Tools also has locations in South Carolina, Michigan, and Minnesota. About 75 of the 160 total employees are based in Texas.
Rosenberger says the cost of doing business in the Golden State led to the move to Texas, but a Texas home base made good logistical sense. "We were pressed for some room," he explains. "We also were pressed financially, because the tariffs had started to kick in."
Then the company's lease in Irvine expired. "Rents had doubled," says Rosenberger. "The marketplace was so strong that the landlord asked us to sign a new lease at market rate or there would be no renewal. So, we chose the no renewal option. We looked at various places and determined that going out of state would be more favorable."
Grand Prairie emerged as the target for several reasons, chief among them the fact that about 75 percent of the customer base is east of the Rockies. "We can reach our South Carolina facility within two and a half hours," says Rosenberger. "We can reach the Midwest states within an hour or two. We can get back to California, plus there are ports in Texas that make sense." Other benefits include "the big 'T' word -- taxes -- and the cost of living is lower," he continues. "It's just easier to do business in the state, at least for now, than it was in California."
Rosenberger adds, "It's a little disheartening, because I'm born and raised in Southern California, and seeing companies -- my own included -- flee to a different state because of tax and being difficult to do business in the state, it's disappointing and sort of sad. I'm hoping the state and legislation gets it together and we get off of these exorbitant tax rates and the difficulty of doing business, but I don't see any changes coming through."
Regardless, the company continues to maintain a California showroom and sales and marketing office in Huntington Beach.
Helshoj retired as CEO -- turning the reins over to Stephen Stoppenbrink as the current CEO -- but remains part of Laguna Tools' culture as a board member, where he can watch Laguna continue to expand and evolve as it nears 40 years in business.
"We've seen upwards of 20 to 30 percent growth [in 2020 and 2021]," says Rosenberger, noting that sales are continuing to grow at roughly the same clip in 2022.
Challenges: "Right now, it's freight costs," says Rosenberger. "Shipping product, bringing it into the country from Asia is horrific because of the costs of containers -- they've skyrocketed."
Pre-pandemic container costs of $3,000 to $4,000 spiked to more than $20,000 before settling at about $12,000 to $14,000, he says.
He adds, "When we try to ship out products throughout the country, whether it be from Texas or from our docks to the retailers, it's incredibly expensive. Fuel prices are obviously creating that issue, but we're finding there's also a shortage of truck drivers and trucks. It's just across the board."
Opportunities: Fueled by a boost in online marketing since 2019, Rosenberger sees an opening moving "further upstream" into the world of benchtop and hand tools with products currently in development. "It's a gigantic number, so we're just trying to do it strategically."
"We'd like to continue growing woodworking, but we also see a huge advantage to focusing on the metal side of cutting," he adds. "It's a much larger market than wood. As we develop equipment, it leads to other types of equipment, so we're just trying to methodically approach the industry."
Another driver: "There's some onshoring activity where companies want to take control," he says.
In terms of product categories, Rosenberger says, "Lasers have really grown substantially."
Needs: "Time," laughs Rosenberger. "There's not enough time."