A year ago, that all changed. When the coronavirus pandemic spread across the country, shutting down businesses and grounding the airline industry, the plastics manufacturer had to make “astronomical” changes to its business model, said CEO Zack Ponce.
Relying on custom-build spec orders to roll in like clockwork? Those days were gone. Overnight, the Sparks-based manufacturer started making and selling its own products in response to the growing number of coronavirus cases and shrinking supply of personal protective equipment (PPE).
“Like everybody else, we had certain sectors that dropped off substantially,” Ponce said. “But we also had others that went through the roof — so much so, that we had to change our company A to Z.”
The healthcare industry was the game-changer for Tripp. A triggering event was when a local hospital contacted the company to see if it could make them safety partitions.
No specs. No drawings. Only a price point was given by the hospital.
“Our people at the onset were saying, of course, we could build that,” Ponce said. “Over time, it became, let’s make it like that for them, and anyone else in need. And before you know it, we were working on partitions and other safety-related products. And they’ve been very well received.”
From partitions to sneeze guards to face shields, Tripp suddenly had its own product line of PPE that it was not only selling to hospitals, but also casinos, restaurants, state agencies and more. The company even launched an online store to make it easier for customers to make transactions, Ponce added.
“Historically, we have always shied away from making our own products,” said Ponce, noting that he feels the cornerstone of Tripp’s work will still be build-to-spec products for clients. “And this past year, the pandemic was powerful enough to create a catalyst to change that mindset. Without 2020, it may have been years or decades or never before we had the catalyst to go there.”
As a result of accelerating its diversification, Tripp ended 2020 with its fourth quarter revenue up 10.5% compared to Q4 of 2019. In all, the company has seen a 5% increase in year-over-year revenue, according to Ponce.
“Again, I believe the core of our business will remain custom spec work for clients, but we’re starting to dabble in retail,” Ponce said. “And given our capabilities, it’s not unreasonable to foresee that our retail efforts can be considerable down the road.”
NOT MISSING A BEAT
It’s a microcosm of how manufacturers in Northern Nevada have been forced to rethink and retool their operations since COVID threw a wrench in the economy.
Sure, manufacturers that sell into struggling markets — airlines, restaurants, hotels, office buildings, and oil and gas — have been hit particularly hard.
But consumer-goods suppliers, like those who sell paper products, PPE, and cleaning supplies, among others, saw strong gains after the initial hit from the pandemic. All told, some manufacturers have been running on all cylinders since COVID hit.
One of those is Minden-based Public Restroom Company, which builds prefabricated restrooms and other buildings for parks and public spaces, from showers to storage, across the country.
Katie Sheridan, chief operating officer of PRC, said her initial reaction to the pandemic-related shutdowns was “panic” before realizing the company was an essential business.
“I think it was the unknown of how big this is, what the impact is, and what does this mean for our company?” Sheridan said. “I think we were all questioning at one point, what is essential? We considered closing down but decided to stay open because we knew our clients needed us. We started getting letters from cities saying, we consider you an essential business and want you to continue operations.”
The pandemic did bring changes to how PRC’s customers wanted their restrooms laid out. Instead of multiple occupancy buildings, clients were looking for single-occupant restrooms to allow for increased social distancing. Sinks installed on the exterior of buildings has also become a common request from clients, she said.
Since PRC produces custom-made buildings to their clients needs, the shifts in layouts have not disrupted the factory’s workflow, she added. To account for social distancing in their own 64,000-square-foot building, the Minden-based company staggered its shift and break times.
“We were able to modify our plant to meet COVID without impacting our construction schedule,” Sheridan said. “We were able to keep operations going just the same by changing things up a little bit.”
SUPPLY CHAIN STRAIN
To that end, Tom Simpkins, interim director of Nevada Industry Excellence (NVIE), an industrial consulting nonprofit, said the pandemic has shined a spotlight on the importance of resiliency in the manufacturing industry.
“One of the lessons learned is that it’s not just about financial solvency, it’s about being resilient,” Simpkins said. “It’s being able to withstand these shocks to your market, whether it’s a major supply chain shifts or market demands. It’s making sure that your supply chains are intact, so when your supply chain is cut from overseas or from the state next door, what is your contingency plan to continue to receive that material —who are your other suppliers?
“We’re putting a lot of effort right now into supplier scouting programs and a supplier database.”
Pre-COVID, there was already a rising concern around supply-chain risks. These concerns were elevated to near panic as supply chains shut down in the early days of the pandemic. One could argue that the high-profile shortages, such as the aforementioned PPE for hospitals, may have served as a broader wake-up call for the supply-chain issues that had been creeping up over time.
“There’s been this talk over the last several years of re-shoring manufacturing to the U.S.,” Simpkins said. “I think a lot of businesses saw it more as a patriotic thing to create jobs or have more made in the USA. But when the pandemic hit, the result was some real tangible damages when you don’t have your supply chain local or at least a local option.
“When one manufacturer is up and running, there’s this massive supply chain footprint around them that needs to be there to support them. And that’s why it’s such a great effort of ours moving forward.”
After all, Simpkins said manufacturers are continuing to move into Northern Nevada, pointing to the state’s favorable tax climate, open land and supportive business community.
It’s part of the reason why developers are continuing to heavily invest in the region as a growing hub for manufacturing, warehousing and distribution.
Take Mark IV Capital, which is developing Victory Logistics District, a 4,300-acre industrial complex in Fernley. The company, based in Newport Beach, California, purchased Crossroads Commerce Center in Fernley in the summer of 2019 for $45 million, according to previous reports.
Mark IV Capital’s first speculative building, which has not broken ground yet, will be an 815,000-square-foot distribution facility, with additional buildings of 170,000 square feet and 217,000 square feet planned after that. The tenants will be a mix of manufacturing and distribution, said Evan Slavik, Mark IV Capital’s president of real estate.
“When we talk to interested manufacturing tenants, we’re getting draw from both the east and the west for different reasons,” Slavik told the NNBW. “From the west, it’s a push out of California for lower costs of doing business, for taxes, for energy, for all the environmental hoops that California will put you through.”
Moreover, Slavik pointed to the fact that Reno is “dead center” between the Canadian border and Mexican border.
“You’re able to reach all of the population in the west within that one day trucking route,” he continued. “That’s really important for distribution, but also for manufacturing, both on the inbound side and outbound side of materials.”
Meanwhile, Slavik said manufacturers that are growing and thriving in the east are looking to expand their reach across the entire country.
“And they’re saying, we need to be able to tap into the population west, how do we do that?” Slavik said. “And they’re saying, we go to Reno.”