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Precor plant opening soon: Hopes are high

Nov 23, 2009

Precor plant opening soon: Hopes are high

The Business Journal of the Greater Triad Area – by Justin Catanoso

 

Precor, the Washington State-based exercise equipment manufacturer, takes occupancy of its first East Coast facility this week. It is a small but compelling example of how manufacturing is not dead in the Triad.

 

Just to refresh your memory, Precor, best known for its treadmills and elliptical machines in gyms, YMCAs and upscale hotel exercise rooms, picked eastern Guilford County last year over a host of other locations in the Southeast for a combined office, showroom, manufacturing and distribution facility that now sits on 38 acres in Rock Creek Center and covers 239,000 square feet.

 

Construction started last March. Landmark Builders of Winston-Salem is delivering the project on time and under budget, thanks largely to declining materials costs and hard bidding from subcontractors. Precor expected to spend $26 million on the building and manufacturing equipment. Total costs will come in around $22 million.

 

“This is one of the nicest manufacturing facilities I’ve ever seen,” says Chris Torggler, Precor’s senior vice president in its strength division, who visited the site from Washington earlier this week. “Everything that’s occurred since we picked the location — from GTCC helping us with screening employees and hiring, to the way the facility came together — has gone exactly as planned.”

 

While the Whitsett plant will showcase all Precor exercise products in a glass-walled showroom that can be seen from Interstate 40, the plant itself will only make strength equipment for commercial users. This so-called C-Line of products — leg, arm and chest press machines, abdominal machines, leg extensions — makes up about 13 percent of Precor’s revenue.

 

“Right now, we generate about $25 million from our strength machines,” Torggler says. “We are known mainly as a cardio (exercise) company. But we feel strength is a great opportunity for us. We want to triple our strength revenue to $75 million in the next few years.”

 

The ramp-up will start slowly. By this time next month, there will be about 25 employees at the plant, most of them on the production floor training in how to make the 18 different strength machines. More employees will be brought in and trained each month through the first half of next year. Bill Banczak, the plant mananger, says Precor will have about 100 employees by mid-year, and if projections hold true, about 160 by 2011.

 

The availability of skilled manufacturing labor played a big role in Precor’s decision to pick Guilford County. To that end, more than 1,500 people applied for the first 75 openings, Banczak says, and that was before Dell announced it was closing in Winston-Salem.

 

Average wages at the plant are estimated to be about $38,400 annually, but that includes several dozen higher-wage office employees. Torggler, however, stressed that most hires will be local. Precor is closing an older plant in southern California as the Whitsett plant reaches full capacity. Of the 112 employees in Valencia, Calif., just eight — in management, logistics, purchasing, sales, IT and human resources — are moving east.

 

Banczak says his newly trained crew will be able to start fulfilling customer orders in February. When working at full capacity, they will turn out 150 strength machines a week. In an ancillary economic boost, Torggler says nearly all plant suppliers are located within 200 miles of Whitsett and many are in the Triad, especially those bringing steel, plastics and upholstery.

 

“That’s a big deal for us,” he says. “We want our vendors and suppliers to be as close to our plant as possible.”

 

The equipment made locally, however, will be shipped not only across the country, but also around the world. Precor is a division of Amer Sports Corp., an international exercise equipment company based in Helsinki, Finland, with 2008 global sales of $2.2 billion. (Precor’s sales are about $400 million.)

 

Torggler also stresses that the Whitsett plant will be Precor’s primary showroom for all products.

 

The company’s plants in the Seattle area do not have suitable showroom space. Thus, he says, customers from gym and hotel chains foreign and domestic will be visiting Whitsett on a regular basis.

 

“There’s a new Comfort Inn and Suites going up right across the interstate,” Torggler says. “I told the manager that if he outfits the exercise room in Precor equipment, I can guarantee him room nights. I can see us having national meetings here, and a sales meeting is already set for here in August.”

 

Torggler says the down economy caused declining sales at Precor through the first three quarters, but adds “the fourth quarter looks very good.”

 

To that end, he’s already looking ahead. At the back of the facility, land is already graded so that floor space can be expanded by another 100,000 square feet.

 

“I keep telling our president, Paul Byrne, that he’s got to come out and see this place,” Torggler says. “We really look at this plant as the place that affords us the greatest growth opportunities in the future.”

 

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About Landmark Builders

About Landmark Builders

Landmark Builders is a regional general contractor in the Southeast. Since 1975, Landmark has earned a reputation as a value-driven, dependable and trustworthy builder. Landmark provides a wide range of construction services including general construction, design/build, construction management and upfit/renovation with emphasis on industrial/distribution, healthcare, senior living, office and hospitality construction. Landmark Builders is an EEO employer.