Business Spotlight: Mission: Containment

Dale “Mac” McIntosh leans forward and reflects on an order that was in his grasp recently, but slipped away. On one hand, the money would’ve been great. But on the other, the opportunity to shrink his company’s backlog is good for the long run.

Custom Powder Systems LLC is involved in a wide range of industries and associated products, from infant formula to medicine tablets.

“We design and build equipment for the pharmaceutical, food and chemical industries to handle difficult-to-contain powders,” says McIntosh, the president and general manager.

The broad capabilities begin at the early product development stages.

“When they are assembling the ingredients that make that tablet, we start at the very beginning with dispensing the active ingredient,” says CEO Denise McIntosh, Mac’s wife. “We can help devise the process (of combining the materials) and make the product so that it gets mixed, blended, sieved and milled, then goes to the tablet press. That’s where we turn it over.”

Mac started his career with Tote Systems in Fort Worth, Texas, providing the same services as Custom Powder Systems. Denise, meanwhile, worked in a startup and was seeking a change. They decided to add their skill sets together and go in business for themselves.

“It’s a great business, and we felt like nobody had really satisfied the systems,” Mac says. “A lot of people made bins, blenders and component pieces.”

The McIntoshes found a way to tie the pieces together.

“And there had been so much downsizing that engineering was being outsourced more and more. It became more important for people to find a company that is a one-stop shop,” adds Denise.

CPS is that shop for such companies as ConAgra, Nestle, Merck and Pfizer, as well as others under confidentiality agreements. Due to demand of its products and services, local clients are scarce.

Critical to CPS’ operations are clean-room processes that are well-contained to protect both the product and the operator from contamination, for pharmaceuticals as well as food. Clean room functions also extend to air filtration and high-purity biotechnology. That’s what brought Dave Aaronson of Filter Technologies in Wichita, Kan., to CPS.

“I do business with other manufacturers, but when I need something that’s very unique, they are a strong resource,” Aaronson says.

For instance, Aaronson needed a lyo transfer cart – a self-contained enclosure used to transport products through uncontrolled spaces – something CPS and Integrated Containment Systems, a company CPS took on in 2008, hadn’t done before.

“We ended up doing 30-something of them and it turned out to be one of the best jobs we’ve ever done,” Mac says.

Aaronson says post-delivery problems are an expectation in the industry, and CPS stands out for its responsiveness.

“We sweat it out until it works,” Mac explains. “We never leave a customer with a problem.”

While the customers aren’t left sweating, the McIntoshes have done plenty of sweating on their own. The company was just finding its feet, with revenue exceeding $9 million in 2010, when the economic recession really slowed their industry.

“But we held everything together,” Denise says. “We had blind faith, or something, that the market would come back and we had a core group of people that we wanted to keep together. So we kept them together.”

CPS bounced back last year, recording $13.9 million in revenue after a soft 2011 produced $8.2 million.

“At the end of 2011 we knew … we had no work,” Mac recalls. “We had 60 people. And we made a decision to keep all 60 people together, and it cost us probably $650,000 cash to do that. But it was the right decision because ’12 rebounded. We thought we could do that, so we spent a lot of money on the company. But it’s worked.”

The current team of roughly 100 includes a sales staff and engineers who work with the clients on container system designs, as well as fabricators on site.

CPS is projecting up to $16 million in 2013 revenue, and the McIntoshes have targeted $50 million in sales before they get out of the business. With that in mind, they’ve set aside land near their current shop, 2715 N. Airport Commerce, to expand.

“We’ve laid out a (55,000-square-foot) building,” Mac says. “But we didn’t get that [recent] order, so we delayed our plans. Our expansion plans are being looked at. We’re just waiting for our market to recover a bit, our backlog to recover a bit and to get the financing we want.”[[In-content Ad]]