Business Spotlight: 'Stainless steel ecosystem'

From a crammed shop tucked away on an industrial street in Nixa, Watson Metal Masters Inc. has a key role in making ice cream, condensed milk and potpie filling.

The custom fabricator of stainless steel and nickel alloy produces tanks and industrial mixers for the food, beverage, cosmetics and pharmaceutical markets. From a five-eighths-gallon tank to 500,000 gallons built on-site, Watson Metal Masters supplies end users such as Kraft, PepsiCo, Unilever and Bayer.

“The biggest players out there, multibillion-dollar multinational conglomerates, we build for all those guys – directly and indirectly,” says owner and President Bill Schahuber. “We build very small, too – a postage stamp, we can make out of stainless steel, if you want it.”

The product variety and customer base – up to 200 active – are spurring a move for the fabricator with decades of history in Nixa. Schahuber is leading a $4.8 million capital expansion that will move the crew to new digs in Republic.

Through Brookline Development LLC, the company has purchased 11 acres in the Brookline Business Park to build a 63,000-square-foot production plant. The company plans to create 77 jobs after its late summer move from 864 W. Enterprise Lane in Nixa, where it currently employs 43.

Under the development plan, Watson Metal was approved for local and state incentives by the city of Republic and through the state’s Missouri Works program. For 10 years, Republic is abating half of the property taxes and for the first six years, Missouri is waiving the employee withholding tax – moves Schahuber says will save Watson Metal some $370,000.

Manufacturing buzz
With the new jobs, the manufacturer has agreed to pay above Greene County’s average wage of $36,398, according to the Missouri Department of Economic Development.

Schahuber is structuring the company to keep pace with recent growth that doubled revenue to $7.5 million between 2010 and 2012.

He also doesn’t want to lose out on potential business due to constraints in the shop.

“We just lost last month a $340,000 order because we couldn’t make delivery,” Schahuber says, noting deliveries are currently at 25 weeks and the client needed a 17-week turnaround. “You hate to lose something that big.

He says 2013 is finishing flat. “I look at 2013 as the year of ‘Let’s see how regulations and health care shake out.’ There’s been a lot of trepidation in the industry because of those two primary inflections into the economic stream,” he says.

Watson Metal is among a handful of steel manufacturers in expansion mode. Days after announcing its relocation, Stainless Technology revealed multimillion-dollar plans to add up to 88 jobs and 75,000 square feet to its Partnership Industrial Center plant. This year, Tank Components Industries has been building an 81,000-square-foot facility in PIC West with the intent of creating 27 jobs in five years, and this fall, Polar Tank finished its 27,000-square-foot, $1.4 million plant expansion in PIC.

Stability in stainless
Started by Rex Watson in 1995, Watson Metal’s roots date back to the mid-1980s as a custom job shop, and like many area stainless fab shops, it further traces back to industry veteran Paul Mueller Co.

Herb Gamble opened Gamble Metal Masters in 1985 as a spin-off of Mueller Co., before Watson made his acquisition and changed the name. Additionally, Schahuber’s grandfather worked for Paul Mueller, who in the 1950s purchased a stainless steel tank from a fabricator and brought it into Mueller Co.’s shop, which had worked in HVAC and gas piping.

“My grandfather was in the shop the day Paul Mueller brought that tank in. He pulled the men around and said, ‘Fellas, this is the future of our company. As of today, we’re a stainless steel tank fabricator.’ I heard that story 35 years ago when I got in the business,” Schahuber says.

His career started at the age of 18 working for Letsch Corp. Knowing Watson for 25 years – they worked together at Stainless Fabrication Inc. – Schahuber joined Watson Metal and took on the presidency three years ago. He bought the outfit in December 2012.

Leaning on its deep history, Schahuber considers the local market a “stainless steel ecosystem.”

“We all help each other and support one another to make our community even stronger, which makes Springfield even more notable in the stainless steel tank fabricating industry. On numerous occasions, I’ve had customers say, ‘When I buy stainless steel tanks, I only go to Springfield, Mo., because that is where the highest quality stainless tanks are being produced.’ It says we as a group are doing something really well. That started back in 1955 with Paul Mueller Co.”

Fellow Nixa company D&D Stainless and Alloys Inc. is another cog in the local stainless steel wheel. Sales Manager Tom Healey says D&D has provided steel sheets, bars, plates, pipes and angles to Watson Metal since 1996. With orders coming in every couple of days, he says Watson Metal purchases 10,000 pounds of metal each month.

He says the move to Republic shouldn’t change things.

“It’s going to be a little farther for us to deliver, but I expect to keep the same relationship,” Healey says, noting the vendor delivers to about 100 manufacturers within a 150-mile radius.

Though Schahuber is currently working 75 hours a week with all his company’s moving parts, he says this is right where he wants to be.

“I’m sitting here designing buildings while we’re designing and building and selling tanks,” he says. “It gets a little time consuming, but I’m loving the heck out of it. This is what I’ve waited for.”