North Coast Seal expands as natural gas helps drive revenues

Source: Crain’s Cleveland Business

North Coast Seal in Brook Park says it is running out of room and is looking to quadruple its size with a new facility, thanks largely to the nation’s burgeoning natural gas industry.

The company hopes to move by the end of year, or early in 2014, depending upon how long it takes to find a new location, Mr. Sasura said.“This is our fourth physical move,” said sales manager Tom Sasura, whose uncle, Ed Montgomery, founded the company in 1985. “Right now we’re at about 20,000 square feet here — we’ll probably look to go to about 60 or 80 (thousand square feet).”

It hopes to find a new facility in Brook Park, or at least near the airport, Mr. Sasura said, though it has not yet determined if it will buy an existing building or construct a new one.

North Coast Seal’s products primarily are rubber O-rings and seals used by a variety of industry, including natural gas utilities running an increasing number of lines to new customers seeking to use the fuel. Natural gas has plummeted in price in recent years, thanks primarily to increased domestic production from horizontal drilling and fracking of the nation’s shale gas reserves.

Natural gas lines must not leak of course, and North Coast has been able to leverage that in its favor, because its strength is in providing pre-inspected and tested products that meet and exceed demanding customer specifications, Mr. Sasura said.

Yet, North Coast does not make any of the products it sells. The O-rings and seals are made by a variety of suppliers; they are repackaged and sold under North Coast’s own brand name.

So how does a company that is a distributor without its own manufacturing improve and ensure the quality of its products, which go out under North Coast’s own brand? By inspecting each and every part — millions of them each week — with sophisticated equipment.

The company only has about 14 full-time employees, but that’s because most of its work is done by automated machines, Mr. Sasura said. It’s actually better, in some cases, if the parts are never touched, or contaminated, by human hands to begin with, he added.

Machines manipulate O-rings into single-file lines on conveyor belts, where each piece is measured by as many as seven high-tech cameras to ensure that they are exactly the right size and free of “flash” — the little bits of plastic or rubber that sometimes are left on molded parts.

Last December, the company spent $550,000 for its most advanced machine, dubbed “Hector the Inspector,” which Mr. Sasura shows off to customers as he promises to lower their reject rate to near zero. That machine alone can inspect about 1 million O-rings a week, Mr. Sasura said.

The private company does not release sales figures, but Mr. Sasura said revenues have been growing well in excess of 10% per year for the past several years, driven largely by his biggest end-market, natural gas distribution lines.