Ox Industries' vertical integration has built York County company strong
For 10 years, Ox Paper Tube and Core Inc. was a successful family business on Maple Avenue in Hanover.
But then President Kevin Hayward, who started working with founders Chris and Kathy Keffer at the business’s inception, decided he could simplify things if Ox supplied its own paper.
So they bought a paper mill in West Virginia to create some vertical integration, said Nikki Schroeder, vice president of marketing and communication for Ox Industries.
That led to acquisition of a mill in Constantine, Mich., which also had capacity to make building products.
During the past seven years, the company has expanded to three divisions: Ox Paperboard, a manufacturer of uncoated recycled paperboard and custom converted products; Ox Engineered Products, the manufacturer of innovative and green building products; and the original paper tube and core business.
The company has grown from a few dozen employees in Hanover to more than 300 in Pennsylvania, West Virginia, Michigan and Illinois.
This past year, Ox did $120 million in sales.
The company’s slogan, “Build strong,” permeates all three divisions in terms of attitude and materials made, Schroeder said.
“There’s a strength you see across all the divisions,” Schroeder said. “Not only are our products strong, but we’ve positioned ourselves as a strong business.”
It’s Hayward’s pursuit of vertical integration that has really built the company, Schroeder said.
“By seeking to vertically integrate his business to control quality and cost in paper recycling, he has ended up acquiring four underperforming businesses and turned them around,” she said.
In 2007, Ox bought the Hallstead mill in West Virginia, which had been in operation since 1869. One quarter of the products produced there are used by Ox Paper Tube and Core. The rest is sold to customers around the world.
“It went so well, it drove the growth of the company,” Schroeder said.
Ox bought the former Berry Plastics Corp. mill in Constantine in early 2012. The location is the headquarters for the Engineered Products Division. Constantine manufactures Thermo-ply, Styrofoam SIS and ISO RED ci polyiso foam structural sheathing.
The products are used by the construction industry to wrap structures, making them weatherproof. In 2012, Ox signed a licensing agreement with Dow Chemical Co., which had been making Styrofoam SIS but discontinued.
Ox also bought a mill in Charleston, Ill., in 2012, to make the polyiso foam used for Styrofoam SIS and ISO RED ci, further vertically integrating the company’s divisions.
It also bought a paper mill in Pekin, Ill., that makes paperboard, again strengthening the integration with the paper tube and core division.
The company’s growth has been applauded in Hanover.
“Ox Industries is a great example of how strong leadership and innovation can facilitate growth even in challenging economic times,” said Gary Laird, president and CEO of the Hanover Area Chamber of Commerce. “Ox Industries is also a great corporate citizen by providing leadership and support to various community organizations.”
While finding a good niche, there have been some growing pains, Schroeder said.
Coming from paper tube and core, Hayward and the Keffers knew next to nothing about building products. So they brought on several experts in the field.
In early April, Ox Engineered Products hired Dean DeWildt as vice president and general manager and Dan Darling as senior applications engineer. DeWildt oversees all aspects of the building products division, while Darling is responsible for all technical attributes on product development, code testing and advocacy.
DeWildt has worked with Styrofoam SIS, from development to implementation, since 2007. He has 30 years of experience in the building and product area of the construction industry. Darling has a license from the Contractors State License Board and a degree in biochemistry from Saginaw Valley State University.
‘Neat to see’
As all this is occurring, the construction industry is seeing an uptick. Ox’s biggest market for building materials is Texas, but the products are sold and used across the country.
Hayward about a year ago moved Ox Industries’ headquarters from the cramped paper tube and core facility on Maple Avenue to a second-floor suite on Carlisle Street in downtown Hanover. Like Schroeder, Hayward is a Hanover High School graduate and is committed to building the community.
There is one difficulty the company has seen, but it’s the result of its growth.
“There is a lot of confusion (in Hanover) over the different divisions,” Schroeder said.
But that’s actually a good problem to have.
“The company has evolved in a lot of different directions,” she said. “The current growth, it’s been neat to see.”
Ox is green
A point of pride for Ox Industries is its focus on being environmentally responsible.
Builders that use Ox Engineered Products get energy efficiency and environmental benefits for their projects. That includes lower air infiltration, reduced conductive heat losses, mitigated thermal bridging through framing, and reduced condensation potential within the wall cavity, said Nikki Schroeder, Ox’s vice president of marketing and communication.
Ox manufactures moisture-resistant sheathings that contain 74 percent to 94 percent recycled content, are recyclable, and contain no added formaldehyde or toxic bonding agents.
Across the three Ox Industries divisions, Ox has recycled more than 140,000 tons of paper each year since it started in 1997, which translates to 420,000 cubic yards of landfill space and more than 300 million kilowatt hours of electricity, according to the U.S. Environmental Protection Agency.