By Eric Peterson | Jun 20, 2022
Cedar City, Utah
Powder coating services
Staheli, founder and CEO of haybaling equipment manufacturer Staheli West, put together a deal to acquire Western Powder Coating in October 2020.
Founded by the late Russel Dalton in 2007, Western Powder Coating had been a key partner of Staheli West. "They were doing all our coatings, all our steel, and he [Dalton] had a terminal illness that was starting to bear down on him quite a bit," says Staheli.
"We have two main customers," he continues. "One of them is us, and we have another company here in town we do work for, and the balance is made up by custom work."
Staheli West represents about half of the company's business. "The other bigger client that's here in the local area is an electrical panel shop, but they do more than just small panels," says Staheli. "They do powerhouses, they do a lot of government work for these big switch houses and different things like that. They do give us a lot of business, which is greatly appreciated."
The remainder -- about 20 percent of Western Powder Coating's business -- goes to contract jobs largely for construction projects, he adds. "Of course, we have small jobs that come in from individuals that are fabricating small off-road vehicles, and there's a lot of ornamental iron, stairways, railings, and a variety of things that are used in the construction trade. That is still booming here. I don't know where that might go over the next little while with interest rates going where they are now."
Western Powder Coating works out of a roughly 18,000-square-foot facility in Cedar City, but Staheli is looking to build a new facility as the first structure on a Staheli West-anchored campus on 75 acres the company owns near Cedar City.
While space is a constraint, hiring is not. "Employment is not a problem for us," says Staheli. "We don't have a bit of trouble. We have a list of people who would like to work for us, and I think we're very fortunate that way. We treat people well, and I think we have a great reputation for that."
Challenges: "Just trying to predict what's coming," says Staheli. "Just trying to understand why the markets are doing what they're doing right now and trying to be careful not to just assume that everything is going to stay the same or keep growing."
"We do a lot of praying for guidance, to be honest, because He knows way more than we do about what's coming, so we try to stay in touch that way and hopefully make some wise decisions based on some inspiration. We rely a lot on that, honestly, and it's been good so far."
Opportunities: A broader market could be catalyzed by the aforementioned manufacturing campus. "I think especially as we bring more people that are in the manufacturing systems and world that we work within closer together on one campus, we believe they will feed each other a lot," says Staheli. "Having the ability to actually finish other goods for other people all the way through the powder-coating process from raw steel, we think that's really going to grow the powder-coating business as well -- and it'll grow the other businesses that come in with them as well."
"To be more vertically integrated as a campus, not necessarily as individual businesses, but as a campus being more vertically integrated to be able to push things through to a finished state, we think is going to be a really good model."
Needs: More space. Staheli says the campus will eventually have purpose-built facilities for Staheli West, Western Powder Coating, and other local manufacturers. "We are really pressed in that facility for room right now, and our plans are to build a new facility . . . that's more efficient and has a better linear flow of product through it," he explains. "The building that they're in right now is not specifically designed for powder coating."
"We're actually already in the planning stages on the initial facility work for Western Powder Coating and we may bring some other suppliers into that facility, too. We think, within a year, we may turn soil on that," he adds."We're going to build a lot more warehouse space into that facility as well, because one of our problems is having raw powder-coated material sitting outside, and getting in weather before they're processed. Right now, my initial plan is for about a 66,000-square-foot building."