Northwest: Central States Manufacturing Plans More Regional Plants

The revenue picture at Central States Manufacturing Inc. of Lowell has maintained a steady growth-mode trajectory since the company's founding in 1988. The only blips for the metal building components producer were in 2007 when revenue dropped nearly 7.7 percent and in 2009 when revenue dipped 1.4 percent.

(Click here for a list of the largest private companies in northwest Arkansas.)

CSM returned to its record revenue ways in 2010 with sales topping $194 million and the addition of its fifth plant. The July opening of the facility in Mount Airy, N.C., broadened its regional network eastward.

"We want to continue to expand our geographic footprint and be a metal components supplier to all 48 states," said company President Donna Leger (pronounced la-zhay).

Towards that end, CSM is looking to the upper Midwest for its next likely area for expansion. But that new plant won't be happening in 2011, according to Leger.

"This year, we're focused on growing existing plants and maybe having a breather," she said. "Next year, we'll look at opening a new plant."

Current operations employ about 365 at facilities that include Lowell, Michigan City, Ind.; Cedar Hill, Texas; and Jasper, Ala.

The company's core manufacturing business fared well even in the face of a national economic downturn. Material sales improved annually during the past 21 years with one exception: a 2.6 percent decline in 2007.

The performance is especially impressive considering the company's pairing with the fortunes of the construction industry. The CSM staff is evaluating the addition of new product offerings this year, which could boost business.

"We're not at the decision point," Leger said. "We're evaluating different roofing products and looking at market potential for the various products. Our goal is to have a decision by July 1."

Adding to the revenue mix is Central Storage Works, a division launched in 2003 that engineers and sells complete building systems for mini-storage projects as well as boat and recreational vehicle storage.

In 2006, the company opened its Steel Source division to take advantage of its volume-buying power and resell steel coils to smaller roll-forming ventures.

"We have a lot of competitors popping up in the market, and this is one way to help keep some of the business," said Rick Carpenter, CSM CEO.

In 1995, the company started Metal Central, retail outlets that sell metal buildings and metal roofing to contractors and homeowners for commercial and residential projects. CSM has Metal Central operations at its Lowell and Jasper, Ala., locations and one stand-alone facility in Little Rock.

"It's not the first one we have tried, but it is the only one we have now," Carpenter said of the Little Rock store.

The company also runs a growing fleet of trucks, which now numbers 54. CSM transports product to customers on the outbound load and picks up shipments for the back haul to help maximize efficiencies and generate income.

The extra revenue to haul for others is nice, but the main purpose of the CSM fleet is to support the company's just-in-time delivery. CSM turns an order around in two days compared with a week for most competitors.

Carpenter credits this system, started early in the company's history, with providing a framework for success.

"We tried to design our business to shorten the lead time to provide the metal product to the customer," he said. "Our speed to the market and quality of our product really set us apart. We do it faster than anyone else."

CSM is a faith-based company that operates much like a public company. In the case of CSM, employees account for about 40 percent of its shareholders courtesy of an Employee Stock Ownership Plan started in 1992.

Carpenter believes the ESOP helps boost productivity and heighten customer service, an ownership arrangement bolstered by the company's open-book management and share-the-wealth philosophy.

"I think that made a big difference," he said. "You reap what you sow. Everything we try to do is based on Christian principals. We have a great group of people who make the difference."

In 2009, the company started a giving-back program to make it easier for employees to help with civic, community and church volunteerism. CSM donates eight hours of paid time off annually for staffers to schedule volunteer work during business hours.

"There is something that completes a person when they do that," said Leger, who took on the role of corporate president in 2007. "It means a lot to our people."

Each quarter, Leger tries to visit a different company location for a staff meeting to talk about the company's financial performance, direction and significant developments as well as field questions.

She also coordinates meetings with area clients as part of her quarterly travel, a carryover from her five years as vice president of operations and trucking.

"I try to make the most out of each trip," Leger said. "It helps me stay in touch with our people and our customers."

Carpenter was drawn to CSM by his late father, Carl, who was enticed out of semi-retirement by local investors to help start the company. He said the venture was a learning experience with its share of pitfalls.

"We just kept our nose to the grindstone and took care of our customers," Carpenter said. "We made a ton of mistakes along the way but kept moving along. We've reacted to our mistakes quickly."