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Made in Georgetown: Coastal Wire expands out west
By Jason Lesley
The stars aligned for Coastal Wire founder Michael Coward in the late 1970s when he stopped at a recycling plant to ask about buying some used wire carriers.
Coward, a British engineer with a doctorate in metallurgy, had left Georgetown Steel to start his own business making wire for the furniture industry. When he saw an opportunity to save some money on wire carriers sitting outside a recycling facility, he tried to buy them. It wasn’t long before Coward heard several loud pops followed by a string of foul language. The wire wrapping a bale of compressed cardboard had failed. The owner of the business told Coward there wasn’t a wire on the market that met his needs.
Talk about an ah-ha moment. Coward had just been presented with an opportunity to use the old formula for business success: Find a need and fill it. He took the wire that had popped, had it tested for tensile strength, elongation and carbon content and went to work on a solution at his plant in Andrews.
Coward’s problem was to find a way to manufacture wire that would withstand 30 percent elongation: a 10-inch piece stretching to 13 inches without breaking. The standard at the time was about 20 percent. “He figured out how to get the longest elongation in the industry,” said Doug Wendel Jr., president and CEO of Coastal Wire.
Coward and his plant manager in Andrews, the late Jimmy Alford, developed a process using batch annealing, baking the wire to alter its properties. Wendel calls it the “secret to the sauce” at Coastal Wire. “Everything evolved from there,” he said. As a result, the American Baler Company recommends the company’s black annealed wire for its high-density presses.
Coward retired and turned the business over to Wendel, his son-in-law, in 2000 with one directive: Never change the annealing process. Some of Coastal Wire’s competitors use strand annealing, a faster and cheaper method, Wendel said. He has followed Coward’s advice: Don’t change the temperature; don’t change the time.
“It’s the one thing we have never monkeyed with,” Wendel said. “It’s why I’m still here. It’s more expensive than what our competitors do, but we have less than one-tenth of 1 percent rejection rate. Our competitors do it cheaper, but they have a much higher rejection rate. Our logo says, ‘Quality: Our Reputation Is Tied To It.’ We are confident in the quality of our product.”
Georgetown County’s economic development director Brian Tucker said Coastal Wire is one of several local companies that have benefitted from growth in a niche market. “Direct sales have allowed the company to have a national presence,” Tucker said. “The same statement is true for a number of companies here shipping products all over the country.”
Coastal Wire moved from Andrews to a former dairy farm off Gapway Road near Georgetown in 1989 and has expanded five times since. The company employs approximately 55 people. “We’re very fortunate that our owner puts money back into the business,” Wendel said. “We have no long-term debt, and as long as we have a good business plan and a good presentation as to why we want to invest in something, he’s been very supportive.”
An example of that willingness to invest came last month when Coastal Wire bought Casa Grande Wire and Cable of Casa Grande, Ariz. The company makes galvanized wire, a product that Coastal Wire was buying previously. Recycling balers use either black annealed wire or galvanized wire, according to Noel DesMarteau, vice president of sales and marketing.
Casa Grande Wire will help open markets in western states, Mexico and other countries for Coastal Wire.
“Nothing we do in Arizona will take from here,” DesMarteau said. “It’s pure growth that will allow us to be competitive in that market. Half the industry takes black annealed and the other half takes galvanized. Now we’re able to manufacture and serve both sides of the industry.”
The company has experienced steady growth since developing its batch annealing process and has expanded the product line from the Georgetown plant to include several grades of baling wire, including an environmentally friendly version called “KleenGreen” along with coiled wire, box wire, bale ties and straightened and cut wire.
That growth led Wendel to expand the company management team, starting with his high school friend and college roommate Jason Hendrix, chief financial officer. “We were growing so fast I couldn’t do sales, production and finance any more,” Wendel said. “I said, ‘Jason, I need you to be in charge of the money because I can trust you. I’ve known you my whole life.’ The time was not right, but finally I got him on the right day, and he said, ‘I’m in.’”
DesMarteau, a friend of Hendrix from graduate school at the University of South Carolina in the 1990s, joined the company after he and his wife sailed here from Oregon, where he had worked for the computer chip maker Intel.
Ken Burt, plant manager, came over from Continental Tire. Wendel said the company maintains Coward’s founding principles of the highest integrity and honesty.
Coastal Wire shares 25 percent of its monthly profits with all employees who meet goals like not being late or missing a shift. When a lift truck operator damaged a door in the plant, the $15,000 repair cost came out of profits. “Everybody,” Wendel said, “looked at that guy and said, ‘Shape up.’ Even a guy slacking off faces peer pressure.”
The other key to Coastal Wire’s success is keeping a steady supply of raw materials. Wendel said Georgetown Steel was a regular supplier, but he never wanted to rely on it too heavily because of union strikes and shutdowns. Now that Georgetown Steel is closed, Coastal Wire works to keep a balance between domestic and foreign suppliers. Nucor Steel plants in Darlington, Kingman, Ariz., and Connecticut are among U.S. suppliers. Imports come from Ukraine, Belarus, Japan, South Korea, Mexico and Turkey, a big supplier for quite a time.
China, target of criticism for its steel exports, has been shut out of the U.S. market after losing a trade suit brought by the major U.S. steelmakers with U.S. production facilities.
“That was good and bad,” Wendel said. “China said if we can’t ship wire rod we’ll go ahead and make the downstream products like shelving for refrigerators and ovens, even our bailing wire products. Now they are competing with us. It’s like ‘Whack-A-Mole.’” China is still selling underpriced wire to Canadian companies, and they have become more of a competitor with Coastal Wire. “Sometimes trade actions are good,” he said, “sometimes they are not.”