By Dan Shingler, Crain's Cleveland Business
There may be no one who likes to see a cement truck working in Northeast Ohio more than Michael Humphrey II.
The entrepreneur purchased Akron Rebar Co. in his hometown last summer and since then has been investing in it to increase capacity, expand its distribution operations and enter new markets.
"We've invested about $2.5 million in people and technology to position ourselves for the future," Humphrey said. "I increased our capacity by 100% by purchasing new equipment in the existing structure."
As its name suggests, the company sells rebar — steel rods that are ubiquitous in nearly all projects involving concrete and that are usually wrapped with wire to help grip the concrete and often coated with epoxy to resist rust and corrosion.
Akron Rebar doesn't make raw rebar from steel, but buys green and black rebar and then cuts and shapes it to customer specifications at its 32,000-square-foot facility on West Waterloo Road.
Its strategy is to focus on integrating its efforts with construction timetables and design, so it can deliver rebar that's ready to use and in order at the construction site, enabling customers to do their construction work faster, Humphrey said. In the business of pouring concrete, time is a critical factor.
Humphrey's investments include two new precision-bending machines from Italy, four new semi-trucks and six new workers he brought on last year.
That brings total payroll to 50 people, plus about 150 outside contractors who work on job sites, he said. Akron Rebar is a midsize manufacturer with sales approaching $50 million a year, but Humphrey is eyeing significant growth.
"We're going to get it to $500 million," he vowed.
To do that, he doesn't plan to sit around and wait for Congress or the Trump administration to learn to play nice on an infrastructure bill, although he admits that would be very good for business. He's hoping to expand primarily via relationships with big construction companies in the design/build arena, such as Welty Building Co. in Fairlawn.
Humphrey also is eyeing another avenue to growth: retail sales. He's hired a full-time sales director to go after big accounts such as Lowe's, Home Depot and Tractor Supply. He's also looking to work with smaller retailers, beginning with Hartville Lumber and Hardware, a 305,000- square-foot retailer south of Akron that bills itself as "America's largest hardware store."
Humphrey said he's offering retailers simple sales and fulfillment of rebar, or ready-made, in-store displays and storage units to help them manage and sell the product.
"I wanted to start moving into the retail space," he said. "A lot of the fabricators in the business, and I've talked to a lot of them, said, 'We don't do it because there's not much margin.' But these are guys selling to one or two stores. I want to sell to a thousand or two thousand stores."
But because his biggest customers are still cement contractors, Humphrey said, a rebound in the local construction industry is what's driving growth at the moment.
For now, Akron Rebar is doing all of its manufacturing from the Waterloo Road facility while it uses its 16,000-square-foot facility on Brookpark Road in Cleveland as a warehouse and staging area for shipping. Humphrey said that helps get his new trucks with product to markets north of Akron.
He added he hopes to soon use up the capacity in Akron and begin manufacturing in Cleveland as well. After that, he may consider acquisitions as he works to increase sales in surrounding states.
The company does not disclose its revenue, but business has been good, Humprey said.
That's evidenced by all of the construction cranes in Akron and Cleveland and all of the big projects undertaken by Welty and other builders.
Those tailwinds might keep blowing, too — for both building construction and infrastructure projects that use a lot of cement and rebar.
"Statewide, construction spending in Ohio is expected to remain strong and potentially increase compared to last year," said Andrea Ashley, vice president of government relations for the Associated General Contractors of Ohio, via email. "One obvious significant investment is the recently passed Ohio gas-tax increase, which will take effect July 1; it will provide an influx of revenue for horizontal infrastructure projects at the state and local levels."