The year 2009 was not the best to purchase a company that builds kilns that dry lumber. But despite a lagging, post-recession economy and depressed housing market, Ton Mathissen and a group of investors saw what Nyle Corp. in Brewer could become.
Many employees had worked for the company for decades and held the knowledge essential for manufacturing the only lumber-drying systems in North America that use an energy-saving, dehumidification technology. And Mathissen, now president of what became Nyle Systems LLC, saw that the technology could be used for more than drying hardwood, which meant the company could grow.
With the help of other investors and the state-backed Maine Venture Fund, Mathissen purchased Nyle Corp.’s assets in 2009 and 2010 when the company had about 12 employees. Today the reconstituted company has about 40 employees, Mathissen said. Its revenue has grown, on average, 25 percent each year; the number of employees has grown 18 percent each year; and the company has needed to expand its physical space each year by 10 percent.
Nyle Systems grew by adapting its drying technology to do more than dry wood, which meant it could expand its customer base. Today, the company’s products also include systems that dehydrate food and heat pumps for industrial water heaters. Because it had workers capable of building new products, and leaders to steer the company toward growth areas, it was able to do something often discussed but less often witnessed: innovate.
In a Bangor metropolitan area with a labor force of about 70,000, Nyle Systems’ 40 employees is a small number. But the company fulfills a role that’s fundamental to the health of any regional economy: It sells products beyond the region, bringing outside money back to people here. It’s illustrating how expansion is possible through adaptation. And it happens to belong to a small but important business subsector — metal products manufacturing — that gives the region a competitive edge over other places.
There’s no clear direction for how, exactly, to increase the number of Bangor-area companies like Nyle Systems that export goods to out-of-state customers and belong to industries that have already displayed promise. Much of a company’s operations depend on its internal ability to seize new markets, its leaders’ savviness, its history and reputation, its propensity toward innovation and, often, a bit of luck.
But business and economic development experts tend to agree that strong clusters of complementary firms, suppliers, and research or training institutions — that can all support one another through their proximity and connections — are foundational to a hardy regional economy. Industries within these clusters of related networks tend to see greater employment and patenting growth, which can have a ripple effect on other clusters — sometimes even launching new regional industries.
It is particularly beneficial to have groupings of companies that sell products and services beyond their region. These so-called traded companies create demand for local industries, such as health care, education and retail, that employ greater numbers of people, according to research by Harvard economist Michael Porter.
“No state or metropolitan area can reasonably expect to expand its economy by developing a higher than average concentration of grocery stores,” wrote Joseph Cortright, an expert in regional economic analysis and development, who formerly worked with the Brookings Institution.
On a state level, Maine has strong groupings of traded companies in boat building and biopharmaceuticals, according to Harvard Business School’s U.S. Cluster Mapping Project. Both areas saw employment growth between 1998 and 2015.
Having a concentration of similar, export-focused businesses in a particular area can attract workers with distinctive skillsets, who find an advantage to being in a place with multiple options for employment. It can allow suppliers to grow and specialize, and facilitate the spread of knowledge.
But it is extremely difficult for a place to create clusters where there were none before. So growth must come from “building on, extending, and combining existing cluster strengths,” Cortright wrote. A group of technology-related businesses might require help with research or attracting capital, for example, while a metals-industry cluster might require help with job training or testing new technologies.
In addition to Nyle Systems, there are other metal-products companies in the Bangor region that hypothetically should benefit one another by their proximity. Mathissen said he would like to see this regional cluster grow, so his company might better find the skilled labor it needs.
Westmor Industries in Brewer, which was named Trans-Tech Industries before its sale to Minnesota-based Superior Industries in 2011, is another example of a local, export-focused metal products company that has grown: It has 66 employees today helping to manufacture aluminum truck tanks that transport fuel, up from 55 employees in 2011, said Sue Astran, in human resources. It sells more than 90 percent of its tanks to customers outside of Maine, said former president Ken Peters, who helped found Trans-Tech in 1985.
Like Mathissen at Nyle Systems, Peters stressed the importance of finding new markets. During his tenure he helped expand sales farther west and south, adapting the tanks to haul different, and often multiple types, of petroleum products according to each state’s fuel needs and road weight restrictions. His workers were essential to the company’s growth: “Having great people work for you is the key to any business,” Peters said.
By Erin Rhoda, BDN Staff