By Eric Peterson | Apr 28, 2019
Lid-closing machines and control panels
Industry: Industrial & Equipment
Products: Lid closer machinery and electrical control panels
After working for CMED Automation (a division of Colorado MEDtech) as the company shut down, Papierski went on his own with Xpect in 2001."There was a lot of projects still in the works and on the books available for people to pick up and finish," he explains. "We started out being a small, general automation integrator."
Business was good, and Xpect expanded into electrical control panels "to fill in the peaks and valleys of automation work," says Papierski.
In 2004, Alpharma, an animal pharmaceuticals manufacturer in New Jersey and an Xpect automation client, asked for a "machine to snap lids on five-gallon buckets," says Papierski. "Instead of hammering with a mallet, they needed something to do that automatically."
The project took on a life of its own. "We're still building lid-closing machines," says Papierski. "That's turned into a product line."
Priced from $2,900 to $25,000, Xpect's machines automatically snap lids on containers ranging from pints to seven gallons, and can handle both liquids and solids. "Usually, these people are closing 600 buckets a week and up," says Papierski, noting that customers don't have an automated filling or packaging line. "That's a whole different animal."
He adds, "Our machine is going to close that lid in three seconds. It's all about how fast the operator can press the button."
For a decade, the focus remained on automation as lid closers remained a side business. "As we moved forward, automation projects got bigger and bigger," says Papierski.
That meant more risk. "That's where, as a company, we struggled," he says. "We had to stop being an automation company because we were losing money. At the end of the day, we were having financial troubles."
Papierski pivoted from automation projects to designing and manufacturing panels and lid-closing machinery in 2014.
The strategy helped stabilize the company, which operates from a 2,500-square-foot facility in Longmont. Xpect's UL508-certified panel business now generates about 75 percent of revenue, and lid closers account for the remainder, and both areas are growing for Xpect. Papierski says the company "uses a network of local suppliers" for both sides of the business, including machine shops and welders, and does all assembly and testing in-house.
Panel customers include automation integrators as well as oil and gas companies, fountains, and garages. "We do a lot of work in the cannabis industry," adds Papierski.
Some cannabis clients have grow operations; others are making extraction equipment. "To be honest with you, that wasn't an industry I ever wanted to go into," he says. "We treat it like any other industry. It's still a machine. It still needs to control electricity."
Xpect moved to a new online marketing strategy for panels in 2017, and Papierski says it's catalyzed growth, as has implementing a better lead-tracking system. "We've grown up and changed how we do that as well," he says. "We've steadily been adding some pretty significant clients over the last three years."
Challenges: "One of the challenges we run into is being able to keep our price point attractive to all customers," says Papierski. "There's only a certain price point the market will bear." Higher metal costs in the face of tariffs make that increasingly hard to hit, he adds.
"As a company, growth is always a challenge," notes Papierski. "We've been through this where we've tried to grow, we brought on people, we couldn't sustain it, and we had let people go."
"That's the piece I obsess about the most," he adds. "Are you going to be able to keep a mechanical engineer working full-time, 40 hours a week, 52 weeks a year?"
Standardization, or lack thereof, is another challenge. "In almost every request for a quote, they tell me it's a standard five-gallon bucket, but nothing is ever the same," says Papierski. "There is some customization built into the design."
Xpect also is able to integrate scales, fillers, and conveyors. "That's where the automation experience comes in handy," he says.
Opportunities: Lid closer machinery. "We're selling more of these machines than I can keep on the shelves," says Papierski. The market is "all over the map" in North America, in industries ranging from oil and gas to paint to cannabis.
While standardization is challenging, different-sized containers present an opportunity, he adds. "We have customers coming to us asking for products we don't currently offer. . . . We've got these startup companies looking of a press to close a pint can. Is that worth designing and selling?"
For panels, adds Papierski, "Our focus is trying to add customers and add the right type of customer: the repeat customer, the customer that comes back to us year after year. We've done well doing that."
Needs: "I can always say we need capital," says Papierski. "I'll be 51 this year. I didn't know what I was doing when I started this company. . . . We've made mistakes over the years and that's how I've been able to dial in where we are now."
"I think it comes down to the right workforce," he continues, noting that he outsources some work to contract engineers. "There's a point where the cost of the contractors is more than keeping a full-time employee on board."
One last need: "More physical floor space would be great," says Papierski, noting he'd like to double the size of the shop. A caveat: "More floor space means you need more employees, and more employees means you need more sales. When will we make that big growth jump?"