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Jonesboro Area? It Conveys EverythingLock Icon

9 min read

David Peacock moves things around for a living, and the man himself can’t sit still.

As president of Hytrol Conveyor Co. Inc., he leads Arkansas’ top-selling manufacturer in the booming, dynamic industry of material handling.

And he paces while he talks.

“I have to move around when I’m on the phone,” he said, asking a reporter to call back on a line linked to his earpiece. “I tell myself it makes me think better.”

The former Marine Corps officer has a busy mind these days. Hytrol, the world’s largest manufacturer of conveyors, by Peacock’s count, is riding a surge of business driven by the e-commerce revolution. And smack in the middle of that boom sits Jonesboro and northeast Arkansas, the little-known conveyor capital of the United States.

Just down the road from Hytrol is FMH Conveyors, and a few miles further across the Poinsett County line is Roach Manufacturing Corp. in Trumann. All three are thriving after major expansions, and business is good at a fourth company at the edge of the region, Automated Conveyor Systems Inc. in West Memphis.

While sometimes scrambling for the same customers, they all compete for skilled workers. ACSI was founded in 1973 by leaders who once worked for Hytrol and Roach, according to Mike Roach, vice president of production for the company his father founded in Trumann.

“It’s hard not to bump into Hytrol and FMH,” Roach told Arkansas Business. “They’re just up the road and they’re always taking our people. Northeast Arkansas has become the largest area for conveyor manufacturing in the country. There’s probably $400 million a year in conveyor sales coming out of this region.”

Last year, Hytrol completed a $12 million expansion, adding about 70,000 SF and an employee parking lot to its existing 600,000-SF manufacturing site on Hytrol Street. That space comes in addition to its 27,000-SF technology center, a key to developing conveying and sorting systems sensitive enough to differentiate between one business card and another. The company, which settled in Jonesboro in 1962, has 1,200 employees, up from 800 in the past 15 months.

Roach, doing business as Roach Conveyors, has 300 employees working in a state-of-the-art 650,000-SF manufacturing plant on Highway 463. It is projecting 2017 revenue of $70 million. FMH doesn’t reveal revenue numbers, but President Kurt Huelsman says business is up.

Hytrol is No. 57 on this week’s annual list of the state’s 75 largest private companies, up from No. 59 on last year’s list. Its 2016 revenue, nearly $172 million, was up 16.6 percent from 2015, which itself was up more than 18 percent from 2014.

“We’re projecting a revenue increase of 14.5 percent this year, and we may even beat that,” Peacock said. “We make more conveyors than anybody else, and this has been an explosion of growth.”

Peacock described an altered sales landscape where online retailers are delivering products, traditional retailers are adapting to e-commerce and whole industries are shifting away from mass packaging and looking to send individual items to specific addresses.

Traditional customers like parcel handlers and bulk manufacturers are still in the mix, but web razor-blade purveyors, digitally savvy local retailers and major department stores like Macy’s or Nordstrom are also buying conveyors, he said.

“It’s the Amazon effect, if you will,” Peacock told Arkansas Business. “We’re going from cartons of products to ‘eaches’ of products. There’s just not enough capacity in the material handling industry right now to meet the demand.”

A-State Symbiosis
The engineering department at Arkansas State University in Jonesboro has built a symbiosis with Hytrol and is creating a relationship with FMH. A-State graduates and students latch on as interns and electrical and mechanical engineers, and Professor Paul Mixon is developing an upper-level laboratory class in material handling engineering that he expects teach using computerized conveyor systems donated by the industry. Hytrol has also endowed a “full-ride” engineering scholarship, Mixon said.

“Conveyor companies are having a big economic impact, but the area is appealing to general manufacturers as well,” the professor said. “There’s a strong workforce, the cost of living is low, and energy prices, specifically electricity costs, are excellent.” Jonesboro is also a retail hub, and the metropolitan statistical area ranks third in the state for recent growth in gross domestic product. Its unemployment rate is the second-lowest in Arkansas, just over 3 percent.

FMH, which has 200 employees, completed a $12.5 million expansion last year, combining manufacturing operations from Suwanee, Georgia, and Hampton, Virginia, into a 195,000-SF facility at Highland Drive and Barnhill Road. The expansion led to the hiring of machinists, welders and assembly line workers.

“We’re continuing to invest in new operations in Jonesboro, which is our corporate office and manufacturing facility,” Huelsman said. “We’re dedicated to developing the people and skill sets needed in this area.”

Mark Young, president and CEO of the Jonesboro Regional Chamber of Commerce, praised those investments and called Hytrol and FMH two of the city’s industrial jewels. “They are world-class leaders in providing material handling systems and solutions” who have made “significant investments” in the community. “We are proud that they call Jonesboro home.”

A subsidiary of Duravant Corp. of Downers Grove, Illinois, FMH specializes in truck-loading and unloading conveyors. And e-commerce sellers are filling a lot of trucks nowadays.

“That’s the major development in the boom, driving unitized delivery of single packages to homes and businesses, as opposed to products that can be bundled and palletized,” Huelsman said. “Conveying systems help in that process. Retailers are asking how do we get individual cartons of something to consumers. And that’s when our logistics teams get busy.”

He described conveying systems that can sort products and “determine how to ship them and how fast you can get them there. It’s all configured to fulfill customer needs, meet volume and throughput goals, and to fit inside the facilities that our customers occupy,” Huelsman told Arkansas Business.

The systems range from small conveyors in the back room of a large retailer to million-SF centers dedicated to delivery fulfillment. “Our basic equipment can aid in manual loading and unloading, and we have multimillion-dollar systems that can read, scan, pick, label and ship items with as little human contact as possible.”

The material handling industry’s growth has been tempting enough to lure in major players like Honeywell International and the KION Group, a German multinational manufacturer. KION purchased Dematic Automated Conveyor Systems of Grand Rapids, Michigan, for $2.1 billion last year. Two weeks later Honeywell announced a $1.5 billion agreement to acquire Intelligrated, a privately held company based in Mason, Ohio.

Mixon described how modern conveyor systems work, and how his engineering graduates fit into the employment pipeline. “Most advanced conveyors today are run by programmable logic control systems,” he said. “They can sort things optically, telling one item from another and knocking flawed products off the conveyor all while it runs at a fast rate — maybe 10 feet a second.

“Electrical engineers oversee the advanced control systems in conveyor manufacturing, and in actually building physical conveyor systems, mechanical engineers sketch them out with computer programs and calculate dynamics, angles of banking, etc. There’s a lot for engineers to sink their teeth into. Hytrol has been asking us to send over a couple of top graduates in electrical engineering and three or four in mechanical engineering every year.”

A Matter of Timing
Roach said heavy manufacturing customers like John Deere, Harley-Davidson, Ford and Toyota helped build up his company. A Roach corporate video also lists Wal-Mart, Lowe’s, GM and FedEx as customers. And as American manufacturing waned, e-commerce orders started rolling in, Mike Roach said. “We try to be flexible in all that we do,” he said, “and the timing turned out right.”

For Hytrol, Roach and FMH, fast delivery to customers is an ultimate priority. “Speed is the name of the game,” said Huelsman. Hytrol, whose customers include UPS, Amazon, Cargill Inc. and Ulta Beauty, promises the “fastest lead times in the industry.”

FMH, which doesn’t publicly name its customers, has built a reputation on responsive, rapid delivery to big-box retailers.

All three companies expect good times to continue. “We foresee the parcel market continuing to grow for the next four to six years at the same rate, then we expect a tapering, but the market is going to be strong for the next 15 years,” Peacock said. “That’s a long time, and if we can have four more years of growth like the last three years, we’re going to be very happy.”

Peacock and Roach see more opportunity in “reshoring,” in which manufacturers return factory jobs to the United States from overseas. Two Chinese companies have announced plans for textile operations in Arkansas, one planning to build a plant in Little Rock and the other set on retooling the old Sanyo TV factory in Forrest City.

“The Republicans are trying to bring jobs back,” Mike Roach said. “The trade deficit we have with the world is just tremendous, and President Trump is fighting it. But we’re at the mercy of the Democrats who keep throwing up obstacles.”

In the Beginning …
Both Peacock and Huelsman are relative newcomers to Jonesboro, but they offered their perspectives on how the area became a hub of the conveyor industry, citing northeast Arkansas’ business climate, its central geography, a skilled workforce and a history of innovation in farm and industrial mechanization.

Huelsman joined FMH in 2013 after a 23-year career in the medical products business. “Coming from that world, where innovation has always been fast-paced, I was surprised to see a similar pace of evolution taking place in material handling,” he said. “Jonesboro evolved to be part of that, going back to the origins of conveyors.”

Conveyor belts found early uses in mining, moving minerals, and in agriculture, where machines helped in baling and transporting cotton and hay. In fact, Gay Roach Sr. started Roach Conveyors in 1953 by inventing a system for weighing, tagging and conveying heavy cotton bales. (See Farm Belt Meets Conveyor Belt in Northeast Arkansas.)

As conveyor lines advanced, they proliferated in general manufacturing (think the Ford assembly line or Lucy and Ethel wrapping candies) and gained greater indoor use by parcel post companies. “Jonesboro’s heritage in agriculture and industry follows that evolution,” Huelsman said. “Certainly being in the center of the U.S. population provides benefits; with all the logistics companies in Arkansas, you can serve customers in any direction.”

Peacock, who joined Hytrol in 2014, was groomed for the company presidency by Gregg Goodner, who led Hytrol for 22 years. During that apprenticeship, Peacock worked in all areas of production and visited 30 of the company’s distribution partners. He and his wife, Amye, an Air Force veteran, quickly found themselves at home in Jonesboro.

“We had moved around a lot, and I can say this is the favorite place we’ve ever lived,” Peacock said. “I expected the Hytrol people to be nice to me; you get that when you come in as a boss. But everyone was friendly and helpful, not just personally but also in the business environment.

“The talent pool is deep with Arkansas State, there’s a productive workforce, and having FMH and Roach nearby makes a difference,” Peacock continued. “We sort of leverage that talent, and it’s helpful. If I can get a prospect to come here and visit Jonesboro for a job interview, the chances of getting them to come to Hytrol go way up.”

Mixon, the engineering professor, said the area holds sway with locals, too. “Hytrol has good luck hiring engineers from nearby,” he said. “Prospects from out of state come in for several years of experience, and then the next thing you know they’re going back to their home region to work. But when Hytrol and other companies hire entry-level engineers from around here, they have a better chance of retaining them for years.”

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