Tales of how 3 manufacturers managed to thrive during the Great Recession

One manufacturer began operations during the low point of the Great Recession. Another reopened during it. And a third invested more money and hired more employees.

These may seem unusual during a period of tight credit and economic uncertainty. But all three businesses — milkmakers, Cosmo Specialty Fibers and Cashmere Molding — made it work. And all three now sell their products nationally or internationally.

These businesses have one thing in common — innovation. Here are their stories.

Milkmakers

The way the cookie crumbled

Seattle native Emily Kane was looking for ways to increase her breast-milk supply after giving birth in 2006. She started experimenting with different lactation remedies and found a cookie recipe that worked. "It's not something a lot of people are doing," says Kane. "But I went out and got the ingredients, and I really found that they were working for me."

Three years and hundreds of batches later, Kane has a business — milkmakers — offering two types of cookies. She quit her financial-recruitment job and decided to "risk it all" because the company was hit hard by the recession.

Kane's chocolate-chip oatmeal and raisin-oatmeal cookies gained popularity through word-of-mouth from other new mothers with the same problem. Even her husband was eating them. The three main ingredients — oats, flaxseed and Brewer's yeast — are super health foods for anyone, not just nursing mothers, Kane said.

In 2010, Kane created a website, where a pack of 30 cookies sells for $44, and moved the baking out of her home to Little Rae's Bakery in South Seattle. Little Rae's bakes its own products and products for small businesses like milkmakers. The bakery takes up seven units in a converted storage facility.

Little Rae's Bakery can bake 600 cookies at one time in its closet-sized ovens — something Kane couldn't do in her home kitchen.

"She gives me the recipe, instructions and specifications, and we make it happen," bakery owner James Morse says.

That allows her to produce more. From 2010 to 2011, milkmakers experienced a sales growth of 590 percent, Kane said. She now has 12 employees and has been testing the retail market.

In September, milkmakers cookies will be available in several baby and maternity boutiques and some specialty groceries across the country. Kane said she is working with a rep to find retailers because the scope of the work is quite large. Many stores have also approached her with interest, she said.

Betsy Trapani, of Issaquah, knows Kane from college. After Trapani's son was born 11 months ago, Kane sent her a batch of cookies. She started eating two cookies a day, which helped her produce 6 months' worth of frozen milk as an emergency supply. She's still breast-feeding and now working three days a week. When the grandmothers baby-sit, she said, there is always enough fresh milk around.

"It's actually a really easy solution," Trapani says.

Kane said that starting a business in a recession wasn't easy. She remembers how terrifying it was to write her first "big check" out of her personal savings to create the logo.

"If I would have had funding and money in the beginning, I probably would have done things differently," Kane says. "I can't grow as fast as I want given the lack of funding. It just has not been easy for small businesses to get loans over the last couple of years."

But she said that because of her unique idea and conservative business policies, she has been successful. The economic climate — what hurt most business owners — actually helped her, she said.

"When you don't have all the money at your disposal, you problem solve, and you get creative, and you network and work with other small businesses, which helps turn the cycle and help the economy," she says.

She's part of Brilliant Breastfeeding, a group of five mompreneur companies from across the nation that all serve the same audience — pregnant or nursing mothers. The companies heard about each other and banded together earlier this year to share costs on advertising and trade shows. "It's really just about being smart about marketing," Kane says.

Cosmo

Specialty Fibers

Refurbished and reopened

Cosmo Specialty Fibers is just getting started — or restarted — in Cosmopolis, Grays Harbor County.

The mill produces cellulose fiber, which is used in a wide variety of household and industrial goods, including cellophane, LED screens and in rayon fabric clothing production.

The former mill, owned by Weyerhaeuser, closed six years ago, causing the city to lose 40 percent of its revenue and 200 jobs.

"At the time it closed, the market wasn't what it is today so they had some difficulties," says Robert Buchan, vice president of governmental relations for Cosmo, who came to the mill when it reopened. Buchan was previously the vice president of external relations and CEO of the foundation for the University of Fraser Valley in Canada.

"Weyerhaeuser made a corporate decision that this was the only mill of its kind they owned so it was an outlier," he says. "It wasn't making a ton of money, and it was a chemical mill so there's risk with that."

Buchan said several companies looked at the mill after Weyerhaeuser announced its closing. The Gores Group, a private-equity firm in Los Angeles, saw the potential investment opportunity and led the acquisition of the mill from Weyerhaeuser.

Under new financing and a new name, Cosmo Specialty Fibers began the restoration process in September 2010.

Buchan said getting the mill up and running cost tens of millions of dollars in repairs and electrical and mechanical work.

"We've been able to come in and put together an aggressive, lean and motivated team," mill manager Jim Smith says. Smith was the general manager at three mills in Florida and California before starting at Cosmo. "We think the market was right to come in at this time."

Smith said the mill is focusing on producing feedstock for rayon fabric because the product is popular at the moment. Everything the mill produces is exported to various companies in China and Indonesia.

"The price of cotton, a competitor, has skyrocketed," Smith says. "And oil skyrocketed, a component of polyester, which is the other competitor, so that's helped."

The reopening of the mill replaced those 200 lost jobs — 35 percent of the new employees worked at Weyerhaeuser; 96 percent are from Washington.

Steve Avery, 61, started working full time at the Weyerhaeuser mill in 1970. When the mill shut down, Weyerhaeuser gave him a "good buyout package and retirement," but he wasn't ready to stop working. He got a job in construction but that company shut down, too. The reopening came at the perfect time, he said.

"I heard the mill was starting up, and I wanted to help get the old girl back up," Avery says. "She's a great place to work and really produces a good product."

Avery was able to come back as a contractor, working as an environmental technician, as he had before the mill closed. He applied when the company began hiring full time, and he now works as a senior lab technician.

"The community had been beaten up pretty hard, and now it's a glimmer of hope that [the mill] is back," Avery says.

Buchan said the mill's grand opening May 21 brought out 800 community members and Gov. Chris Gregoire. He said the attendance is a testimony to how much the mill and its employment opportunities mean to the community.

"The nuclear plant went down, the sawmill went down, four or five mills on harbor closed over decade," Buchan says. "This was the first uptake in the other direction."

In the month that Cosmo Specialty Fibers has been reopened, the company has seen production steadily increase as the mill works out all of its kinks. Buchan said he estimates the mill will be back to its previous production by the end of the year, producing around 140,000 tons a year.

Cashmere Molding

Investing more while having less

Cashmere Molding in Woodinville started with just two employees in 1991 — Greg Herlin and Mike Gadwell.

The two were roommates at Western Washington University. Gadwell was in the plastics program, and Herlin was studying business. Skip ahead a few years: Gadwell is the last employee left at a failing plastics molder, and he called Herlin with the idea that the two should take over the company. Herlin was in sales at the time, just one year out of college.

They started in 1991. It was a year and a half before the two could afford to hire their first employee.

The company had its hardest year in 2005 and barely survived, Herlin said. He knew something had to change.

In 2006, in an effort to save the business, Herlin bought the majority of the company, leaving Gadwell as a minority owner. Herlin received loans from molding equipment companies and banks. Then he invested in new technology, hired more people and expanded operations.

Since 2006, the company has invested more than $1 million in new manufacturing equipment and tens of thousands in securing ISO certifications. Cashmere now has more than 65 engineers and staff, designing and molding plastic parts 24 hours a day. In 2010 alone, Herlin hired 16 new employees.

The company's revenue has increased an average of 66.2 percent per year from 2008 to 2010.

Cashmere Molding makes the plastic for the Clarisonic skin-care brush. Herlin said that they can make almost anything — a keyboard, a power strip, anything you can see in your car.

In May, the company received a medical manufacturing ISO certification to add to its quality management certification received in 2009.

"It's a rigorous process that takes many months and costs tens of thousands of dollars each, as well as maintenance fees and ongoing third party audit fees annually," Herlin says.

The investment in new technology — particularly multishot equipment that completes multiple molding steps in one — cut labor and machine time by 60 percent, Herlin said.

"And what that means to my customers is a 40 percent reduction in price," Herlin says. "Overseas molders in Southeast China beat us by about 30 percent on price so when I can save 40 percent, it allows me to be price competitive globally while still being a local operation in Washington."

Before 2006, Cashmere Molding had six injection molding machines running a shift a day on average. Now, the company has 16 presses running three shifts a day on average. He's hoping to expand to 30 machines in the next five years, and he has a reason to — in May, the company produced 2.9 million plastic parts. An average month in 2009 produced 500,000 plastic parts. Over the last three years, the company grew from a $3.5 million annual revenue to nearly $8 million.

The two brightly lit buildings that Cashmere Molding occupy are packed tightly. The injection machines are spaced 3 to 4 feet apart. Another building that will add 30,000 square feet to his operation should break ground in November, Herlin said. It will be located next to the current site and will add to the existing 37,000 square feet.

Making those types of investments throughout the recession came with a lot of challenges, Herlin said.

He made it by buying older models of equipment at auctions and putting all the company's profits back into the business. Machines range in cost, but the average machine cost at Cashmere is about $250,000, Herlin said.

"We've purchased six new machines in the past three years, but in 2006, 2007 and 2008, it was mostly used equipment," Herlin says. "It's all about finding good value, picking up inventory that's been sitting for a few years and working to keep costs very low."

Herlin said the assembly and decorating technology that he purchased is what sets Cashmere Molding apart from other plastic molder companies with standard injection equipment. He sells accuracy, speed and repeatability, he said. As he explained the process of plastic injection, the machines moved faster than he could talk.

Melissa Powell: 206-464-8220 or mpowell@seattletimes.com