Acquisition last year expands product lines
A Cranston-based manufacturer of personal protection gear says it expects to increase sales by 25 percent, and create 50 new jobs in Rhode Island, as it folds in the operations of a Pennsylvania company it acquired in December.
North Safety Products bought Fibre-Metal Products, of Concordville, Pa., for about $68 million, according to a U.S. Securities and Exchange Commission filing. Now, about 60 percent of Fibre-Metal’s equipment is being moved to North Safety’s 200,000-square-foot Cranston plant.
The rest of Fibre-Metal’s equipment will be moved to a facility in Mexico, said North Safety spokesman David Barricelli Jr. “It’s in the works now,” he said. “This entire plan will be complete no later than June 2007.”
North Safety Products is a $450 million company, with manufacturing facilities across the United States, in Canada and in Mexico, and a sales presence in 100 countries, that has experienced double-digit sales growth in each of the past three years.
It makes personal protective equipment for the manufacturing, transportation, mining, utility, construction and military markets, Barricelli said; products include respirators, safety gloves, first-aid items, face shields, hard hats, protective footwear, traffic vests and other items.
The Fibre-Metal acquisition is part of North Safety’s ongoing strategy to become the leading supplier of head-to-toe personal protection gear in the world, said Sid Ellis, president of the company.
It is a bundling strategy, Ellis said: The idea is to carry every item clients need, so when they go to buy one product, they will realize North Safety is a one-stop shop. Typically, Ellis said, North Safety can supply 80 percent to 85 percent of a client’s safety-gear needs.
The company employs about 2,000 people, 250 of them at its Cranston headquarters – not counting the new jobs. Two of the 50 positions being created in Cranston have been filled by workers who were brought up from Pennsylvania, because of their knowledge of the products.
Barricelli said North Safety will retain about 15 of Fibre-Metal’s sales and marketing personnel, for the same reason. But most of the people who lose their manufacturing jobs in Pennsylvania will not be moving to Rhode Island.
Most of the new jobs in Cranston will be manufacturing jobs, to be filled over the course of the next six months, said Nino Granatiero, North Safety’s vice president of product development.
In order to fulfill customer orders, he said, North Safety will continue manufacturing at the Fibre-Metal plant until the transition is complete.
“The most important thing is for the customer. For them it has to be seamless,” Barricelli said. “Customers are still making orders. We haven’t missed a beat.”
North Safety’s new product-development team is taking over the development of new products started by Fibre-Metal. Granatiero said his department is doing a good job of “shuffling around” projects to make room for the ones from Fibre-Metal. That, he said, has involved putting some of the company’s existing projects on the back burner.
The addition of Fibre-Metal will allow North Safety to penetrate the welding market, which is a new market for the company, Granatiero said.
Fibre-Metal was established in 1905, after its founder invented a protective welding helmet. Its gross profit in 2004 was about $15 million, according to an audit report filed with the SEC.
“You will not find a more-established brand of welding helmets,” Granatiero said. “This acquisition, from all sides, is good for us.”
But it’s not the company’s first acquisition, he said. North Safety has acquired more than 20 independent companies since it was established in 1973. One of its most significant acquisitions was that of Montreal-based Arkon Safety Equipment, in 2000.
North Safety considers product development to be the “lifeblood” of the company, Granatiero said, and has been making significant investments in that department for the past six years, increasing staff and upgrading technology. The results have included products developed in the wake of the Sept. 11, 2001, terrorist attacks, such as gas masks and escape hoods, designed to protect against chemical and biological agents, and a line of rubber gloves and boots for the military, which have the same purpose.
As a result of its investments in the department, new product development now takes a year or less, where it used to take at least two years, Granatiero said. The company also spends a lot of money on logistics, to ensure on-time delivery of its products.
