Winter 2019

As we approach the end of the first quarter of 2019, we have had time to reflect on the past year and to establish goals and plans for 2019.

2018 was a challenging year with many issues that were very rare occurrences:

• Import tariffs on Steel and Aluminum
• The installation of a new Enterprise Resource Planning system (ERP)
• An economy that provides the quality worker an opportunity to change jobs easily

Another challenge for our country is an aging work force leading to a high level of very skilled workers retiring and a population of young people coming out of high school looking to work in technology and not in manufacturing as a career path.

The challenge for manufacturers is that the United States has a tremendous opportunity to grow manufacturing domestically which is the first time in nearly 25 years.

We want you know what we are doing to address these challenges and how we believe we will thrive in the future.

• Tariffs: We are working through the Administration’s policies, to a great extent, although we have been very vocal advocates publicly in the press.

1. As a company we testified before Ways and Means Committee in Congress and have received 11 exemptions from the import duties. This has helped to average the impact of the higher costs down however costs still have increased.
2. Pricing globally has stabilized although at a higher cost.
3. Global supply is also stable which has resulted in Tin Plate being readily available.
4. We have brought in additional inventories of steel allowing for more flexibility in responding to customer needs.

• Installation of a new ERP System: Independent Can has a very diverse product offering manufactured in 5 plants strategically located in the USA. We needed a sophisticated system to help schedule processes and to keep track of work in process.
• The system was installed over a 24 month period and the last plant to go live was Belcamp. When this was done, the overall complexity of the largest plant caused huge problems in both scheduling and transparency of work in process. We failed to service our most important customers and we know it.
• Today we have a new team managing the system and are absolutely focused on correcting the issues that plagued us in 2018.
• Why did we install this system? Our company has been successful because we have had for many years very skilled, dedicated long term can makers that grew up with the business although they are now retiring. We have lost many individuals that had, in their brains, all of our tribal knowledge which made the business work without a complex computer system’s assistance. To grow and thrive we need systems to help the newer employees.

1. Manufacturing slip cover tins for both stock designs and custom –

11 – round diameters and 6 tapered

45 – irregular shapes (square, octagon, rectangle, oval, cut corner ETC)

35 – 2 piece drawn slip cover and continuous threaded and interrupted thread

40+ – different closures and nozzles for various applications

Military tins

• 2. Lithography –

Belcamp – 2 Metalstar lines (4 and 6 color), 1 Crabtree (2 color) and 3 thermal coaters

Vandalia – 1 Metalstar line (6 color) and 1 thermal coater

• The economy has been growing since 2010 and now almost everyone that wants to work is working. Along with this, if there are any exceptional workers in your business they are being recruited.
• What are we doing to help retain and hire the culturally aligned Associates?
• Employer of Choice-
• Flexible work schedules are offered in most plants and are also being developed where there are more challenging customer demands
• Improved a 401K match program
• Evaluated all wage rates to make sure we are competitive in all skills
• Career path development along with apprentice programs
• Technology-
• Today most young people coming to manufacturing directly from High School or College do not want to get their hands dirty. Associates are managing more systems then manual labor.
• CAD – systems
• CNC – mills and lathes
• Robotic packaging system
• Computer skills training

We have a lot of challenges although we have even more opportunities for new and exciting metal packaging options today than we have had in many years.

I want to thank all of our very important customers and also to apologize for our performance in 2018 and assure everyone that we are razor focused on every customer, every day.

Thank you and never hesitate to call any of our sales personnel, or even me, if you have a problem or an opportunity.

Rick Huether

President and CEO