By Tom Ballard, Chief Alliance Officer, PYA
In a fairly non-descript building in the Hardin Valley area of West Knoxville sits a high-tech manufacturing company that represents an initiative by the business’ owner to bring more manufacturing back to the U.S., specifically this region.
“John (Lin) and I have ambitions to have a Chinese business park here,” Scott Huff, Principal in Innovate Manufacturing, says, referring to his Chinese born Vice President for Engineering. “The math works to do this kind of work here. It’s much like the 1980s and 90s when Japanese companies invested in new plants here.”
For Huff, Principal in four companies under the Innovate brand, the effort is a reversal after more than two decades when his business was mostly or entirely based in China. Today, his strategy is to build capacity here while leveraging assets Innovate has developed in China. Those Asian-based capabilities include Innovate International Ltd. in Shenzhen, China, and Innovate Tooling in Dongguan, China.
“If they (Chinese manufacturers) have customers here, they are a candidate to open a plant here,” Huff says. He sees particular opportunities for consumer products industries.
Huff is a Kentucky native and West Point graduate who opened his inaugural domestic manufacturing facility about two years ago and recently opened a second plant – Innovate Pets Inc. – in nearby Loudon County.
“I made my first trip to China in 1994,” Huff told us in a recent interview. At the time, he had just started Innovate as an engineering design firm, but soon morphed it into actual contract manufacturing. By 2004, Huff and his family were living full-time in China.
“I was spending more time in Asia than the U.S.,” Huff explained. “My wife suggested we move to China, so we did and reincorporated the company in Hong Kong. We got there, and we shot everything that moved.”
A decade later, the engaging Huff saw some trends that caused him to revisit his overall business strategy. That thinking was captured in this two-year old column from Plastics Technology that noted factors such as rising energy prices, transportation costs, and wages as deterrents to further expansion in China.
Innovate Manufacturing started production in 2015 at its Hardin Valley location that Huff laughingly says frequently confuses navigation devices. The plant specializes in injection molding, blow molding and injection stretch blow molding, particularly for products that Huff characterized as hydration items.
“China has outright owned that market,” he says of the 32-ounce bottles made of TritanTM, a product of Kingsport’s Eastman Chemical Company. Ironically, the material has been compounded there, shipped to China, blow molded in China into a finished bottle, and shipped back to the U.S.
“It’s costly to ship air,” Huff says. “We’re going to cut-out that trip” as a result on the capabilities imbedded in the Hardin Valley plant. Initially, for one national customer, Innovate Manufacturing expected to produce 15,000 plastic salad jars a month, but had to produce 50,000, and continues to ship less-than-truckload quantities on a daily basis.
The new plant in Loudon County is making pet consumables which are starch-based and injection-molded much like plastic parts. It is a capital-intensive process that benefits from being able to source desirable American raw materials like organic non-GMO potato starch, Huff explained.
There are more plans on the horizon, leveraging Innovate Tooling’s expertise in tool and die.
“Twenty years ago, we gave-up teaching people to be tool and die makers,” Huff said, explaining that the future success of manufacturing resurgence in the U.S. is significantly dependent of developing people with those skills. He’s working with others to explore the best way to achieve that goal.