Universal Fiber has plants in China and ThailandAugust 31, 2012 6:00 AM
by Joan Tupponce
Marc Ammen, CEO of Universal Fiber Systems in Bristol, never underestimates the power of local and city officials in China. “They can help you or not help you,” he says. “In China, you have to have affiliation with local officials. It’s a very well-oiled machine. If you step out of line, you can make expensive mistakes.”
Universal Fiber, which produces carpet fibers for commercial, residential, transportation and textile markets, opened a plant in Taicang, China, in 2008 to capitalize on the growth of the middle class in China and India. Ammen has local officials working with his team in Taicang to ensure that everything runs smoothly, especially electricity.
“It’s a must,” says Ammen “We use heat up to 350 degrees. Anything like a flicker of a light switch can cost us $100,000 because the product will freeze up. As China has grown and requires so much electricity, the regularity of electricity has not been a given. We are very fortunate that we have great business friendships in our local area to go to bat for us.”
Founded in Bristol in 1969, Universal operates four plants in the United States — two in Bristol and two in North Carolina — and one in Thailand in addition to China. This June, it won a Gold award, recognizing the best new commercial interior product, for its new carpet fiber at an industry trade show at NeoCon World’s Trade Fair in Chicago. “One of the things we pride ourselves on is products that have universal quality standards, design and construction,” Ammen says.
A former Virginia state senator, Henry Dunlop “Buzz” Dawbarn, and partners started the company in Bristol to supply carpet mills in Dalton, Ga. “Mr. Dawbarn was trying to make use of some Virginia grants from a government subsidy,” Ammen says.
Today the company’s Bristol plants make fiber for the commercial, residential and automotive industries. The North Carolina plants produce fiber for military applications and specialty high performance apparel for consumers. “We also make fiber for some industrial applications,” Ammen says.
Universal Fiber began expanding its business in the 1990s, adding more production lines. In 2008, it opened a new warehouse in Bristol. The company started its plant in Thailand, where it makes commercial fiber, in 2005. “[That] is associated with a large and loyal multinational customer that needed us to solve some supply chain issues that they were facing in Thailand,” Ammen says.
Nothing the company makes in China or Thailand comes back to the U.S. “We export product from Bristol and North Carolina to Asia and elsewhere in the world,” Ammen says. “We don’t export jobs. We export products.”
Universal has 1,200 employees companywide with nearly 600 in Bristol. The company decided to diversify geographically 10 years ago. “We’ve really stepped that up in the last five years,” Ammen says.
The company sells products to every continent except Antarctica, and Ammen is determined to find a way to sell there. “We have local customers and multinational customers, so we have a global footprint. We’ve recently had several new customers in Australia and Europe. We are servicing any brand you would recognize in carpet, automotive and airlines.”
While Universal Fiber does have a few sales agents around the world, it relies mostly on its internal sales force. “There are so many technical aspects about our product that take a long time to learn,” Ammen says. “We also have to guard our products.”
Sixty-five percent of the company’s sales are in North America. The remaining 35 percent are outside of the U.S. Ammen would not disclose actual sales figures.
Most of what is produced in Thailand stays in Thailand, and approximately 60 percent of the fibers made in China stay in China. “The balance goes to Asia Pacific with the largest portion to Australia,” Ammen says. “We also sell to Korea and Japan as well as India and South Africa. We are growing everywhere. We expect to continue to grow in North America but we will grow disproportionately in Asia.”
To solidify its alliance with local officials in Taicang, Universal Fiber invests in the local economy. It has recently signed a lease to double its space. “Without that alliance, you would not be successful,” Ammen says. “Many companies have failed miserably in China.”
Another important aspect of doing business in China? Protect your trade secrets. “It’s a ‘no-rules’ kind of place,” he says, adding that all of the company’s proprietary information resides in Bristol. “It’s the wild, wild East.”
Economy of Taicang
Over the last two decades, Taicang, a county-level city in China that includes seven towns, has moved from an agricultural economy (rice, cotton, livestock, etc.) to industrialization. The U.S., Germany, United Kingdom and Taiwan have all had projects in the area. In 1991, the city established the Taicang Economic Development Zone, which now has more than 100 projects from Germany alone. The city’s manufacturing base includes machinery, automobile parts and electronics. Only about an hour drive from Shanghai, Taicang sits in the South Jiangsu Plain. Major companies in the city include Taicang Otsuka Chemical Co. Ltd.; Oechsler Plastics Products Ltd., a subsidiary of German-based plastic molder Oechsler AG; and China-based Schaeffler, a provider of roller bearings.
Travel to Taicang
Taicang traces its history back to A.D. 220. “It’s only an hour from Shanghai but it’s 50 years away,” says Marc Ammen. “It’s Old China. You’ll see rickshaws and bicycles. It has a slower pace. It’s very refreshing.” Major tourist sites include Zheng He Memorial Hall, honoring a royal admiral in the 1400s, and the Tianfei Palace where Zheng He prayed for good luck before setting out on his voyages.
Economy of Bristol
Bristol sits on the Virginia-Tennessee line with easy access to interstates. The city has a world-class fiber infrastructure. It was the first in the country to launch a fiber-to-the-user network offering a “triple play” of services. Bristol has more than 900 businesses. Industries include manufacturing, retail, agriculture and information technology. In addition to Universal Fiber Systems, major manufacturers in the city include Strongwell (fiberglass products), Line Power Manufacturing Corp. (power distribution equipment) and Ball Co. (metal beverage packaging).
Travel to Bristol
NASCAR fans flock to Bristol each year for races at the Bristol Motor Speedway. The Appalachian city offers many recreational activities, ranging from fishing and boating to hiking and golf. Bristol Caverns and Appalachian Caverns also are popular attractions. Known as the Birthplace of Country Music, Bristol hosts a music festival called Bristol Rhythm and Roots Reunion every September. The event attracts musicians playing bluegrass, Americana, Celtic and country music. Cultural attractions include the Paramount Center for the Arts, a renovated 1930s movie theater, and the nearby Barter Theatre, in Abingdon.
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