Contract injection molding and plastic tooling services
Applegate's background as a plastics executive led to his acquisition of B-Side Plastics as a blank slate to start a new business in Texas Injection Molding.
"We started out with a company that was a good shell or a platform," says Applegate. "It had really no processes or procedures or quality systems or quoting systems -- anything."
The strategy was to hit the ground running with sales while implementing these processes and systems. The company quickly broadened its capabilities with ISO certification and equipment acquired from Flextronics Houston's shuttered tool shop, while selling off some assets to balance the deal. "I essentially got the tool shop for free," says Applegate.
Texas Injection Molding grew steadily for its first seven years of existence. "We grew to about 80 employees," says Applegate. "We put in an ERP system, IQMS, to allow us to scale."
On the eve of the pandemic, Texas Injection Molding had outgrown its dated 24,000-square-foot facility. The shockwaves of COVID-19 made many companies put big projects on pause, but Applegate moved forward on construction of a sparkling new $6.5 million facility. "I had already put money down," he says. "Everybody else was shutting down. We decided, 'Full steam ahead.' That's not something in our control."
Texas Injection Molding moved into its new building in spring 2021. "We built a 65,000-square-foot facility, invested in a material-handling system, closed-loop water system, cranes, silos," says Applegate. "We've added four injection molding machines, a blow-molding machine, and 60 people."
The move has paid off: Sales grew by about 50 percent in 2021, and Applegate forecasts 30 percent growth in 2022. "Those companies we were aggressive in recruiting and added to our stable in 2020 actually went into production in 2021," says Applegate. "Those customers really started to hit their stride in 2021 after we moved in, and then the oil came back and that lifted everything again."
That will take him way beyond his initial mentality of maxing out at $10 million in sales and 100 employees. "I didn't want to be the biggest -- bigger's not better, it's just more," says Applegate. "We got there faster than we thought, then we had to adjust it, because my job is to serve the customers and the employees. If the customers want to grow and the employees want to grow, then I need to get out of the way and let somebody else help them or I need to facilitate that."
Customers in a wide range of industries, each typically ordering $250,000 to $1 million in parts from Texas Injection Molding annually, have driven the growth. "We're very diverse, being a custom molder," says Applegate. "In Houston, you're going to have energy. We've got some medical, we've got some construction, some HVAC, some consumer goods, direct-to-consumer-type stuff."
"We target middle-market companies within 300 miles of Houston, so if there's a problem, we can get in the car and go see them," he adds. "We try actually to not grow the energy business. Energy's very cyclical, and you have pretty big swings from going and blowing to nothing."
Beyond injection molding and tooling, Texas Injection Molding offers design for manufacturability and prototyping services. The company also stays on the front end of the curve with innovation in plastics. "We're doing a lot of value-add to the parts," says Applegate, citing capabilities in printing, RFID, and mechanical assembly. "We'll do some things that are a little more involved than just shooting a piece of plastic and shipping it out the door for our customers."
That dovetails into the company's broader mission. "Our vision simply is to be the best at what we do," says Applegate. "Nobody wants to start out and be mediocre, be the most average company out there. No, we want to be the best at what we do in the markets that we serve."
Challenges: "Supply chain and employees are at the top of the list," says Applegate.
To foster the company's workforce, TXIM University gets new hires up to speed with a 2,000-hour apprenticeship program. "I registered with the State of Texas as an eligible training provider, which gives me the same status as a community college," he says. "That allows me access to federal training funds. . . . There's money that's out there for training, and we're paying our tax dollars to go to training, and I think we can train our people here better than anybody else."
Opportunities: Applegate points to "the geopolitical opportunity" of reshoring manufacturing as well as continued growth in all of the target industries for Texas Injection Molding. "The trend is instead of outsourcing to the lowest-cost nation, bringing that back here," says Applegate. "Almost 20 years ago when I got back into manufacturing, people would go, 'Why are you doing manufacturing? That's a dead business.' I said, 'No, I'm long on manufacturing. Eventually, something's going to happen and we're going to need manufacturing.'"
Needs: Despite just opening a 65,000-square-foot facility in 2021, Texas Injection Molding already needs more room, says Applegate. The plan is to expand by another 30,000 square feet on its seven-acre property in the near term, "but we need to breathe a little bit first," he notes. "My plan this year is to recover from last year."
The target for groundbreaking is 2023, as Applegate hopes issues with the supply chain diminish in the meantime. "The developer said the steel [for the new facility] alone would have cost us $1 million more if we had not done it until we did, if we had waited until 2021," he says. "We wouldn't have been able to do the project."