Plastics firm’s COVID panels fuel turnaround at new headquarters.
A&C Plastics broke ground in early 2020 on an expansion of its longtime headquarters in southeast Houston to accommodate steady growth in its plastics distribution business.
Shortly after the Houston Livestock Show & Rodeo shut down, work on the new office building and warehouse did too.
“When COVID hit, business went to crickets,” said President Katie Clapp. “It was like, ‘Oh my God, what are we going to do?’”
She called her general contractor: “Stop everything you’re doing, because we don’t know what’s happening.”
Within days, however, the picture became clear: Demand for plastic sheets would skyrocket with the market for pandemicrelated safety products such as shields at the grocery checkout, partitions at desks and face shields.
“I remember seeing Scott (McClelland) with H-E-B talking about how they were putting up plastic barriers at the cash register. I thought, this could be a good thing for us,” Clapp said.
The expansion project resumed, and A&C began calling its suppliers all over the world to build inventory. The company stocks more than 100 colors of plastic sheets in various sizes and thicknesses. The panels, which range from 4-foot by 8foot to 9-foot by 18-foot, are used to fabricate signage at sports stadiums and stores, for museum displays, picture frames,
light fixtures and much more.
Prices vary widely, with a 4-by-8 panel selling anywhere from $40 to $500, Clapp said. A panel that size might yield around 40 face shields or four to six shields between desks.
Last year, sales zoomed to $58 million from $31 million in 2019. The company first hit the $1 million sales mark in 1977 and has grown 5 percent to 10 percent annually over the last decade.
The product is harder to get as demand has surged globally. Orders from suppliers that used to take one to four weeks to
receive, now take eight to 20 weeks, Clapp said. Prices are up as much as 35 percent.
“Now that we’ve got this new warehouse completed, we’ve got enough inventory on the floor that we can ship an order out the same day,” she said.
Customers who bought whatever was available in clear for safety projects last year are now ordering thicker panels to fabricate permanent replacements, Clapp said.
A&C also diversified, fabricating and selling close to 35,000 face shields, and donating another 4,000 to hospitals
and other facilities.
The expansion at 6135 Northdale St. consisted of adding a 77,000-square-foot warehouse for high-pile plastics storage and 35,000 square feet of office space. Plans were modified to include automated touchless fixtures in the bathrooms and an air purification system.
Seeberger Architecture and SPD Construction worked on the project, which brings multiple conference rooms, a training room, wellness rooms, personal phone rooms, a full gym, a laundry, catering kitchen and lunch room.
The office incorporates products made from plastic panels in more than 50 places, including gym lockers, dry erase boards, a chandelier, bathroom stalls, counter tops, shelving and a sign display showing the history of the company, which was founded by Clapp’s mother, CEO Carolyn Faulk, in 1973.
Multi-wall poly carbonate sheets, the kind used in patio covers and more recently at gyms to separate equipment stations, are used as partitions between desks. Gym lockers in a gray wood tone are fabricated of HDPE sheets, the same material used in cutting boards. Bulletresistant windows are the same kind used at convenience stores and banks.
Faulk’s extensive collection of signed memorabilia, including sports jerseys, boxing gloves, photographs and basketballs, are encased behind plastic boxes or frames throughout the office. A plastic table that can seat more than 30 extends the length of a conference room for sales meetings next to the catering kitchen, which has plastic counters. The facility houses a function space for the Faulk Foundation, which supports families facing challenges.
A&C Plastics, which has shipping locations in Chicago and Colorado Springs, Colo., employs 80 people. The new headquarters is built out for 80 employees but can be expanded for 150.
If Texas were a country … At least once a week, I read that phrase in some report or another to express the size and importance of the state’s economy. But it’s a lousy premise, because if we broke out every country’s states and provinces, especially China’s, Texas’ ranking would drop pretty quick in comparison.
The Lone Star State is globally important without skewing the statistics and could become more so if we make the right investments.
Texas brought in more revenue from exports than any other state in 2020 for the 19th consecutive year, according to the Census Bureau. Our exports were worth $279 billion compared to $156 billion from California and $61.9 billion from New York.
“Even with all the challenges we faced in 2020, we are still outpacing the competition in exports — handily, I might add — that’s a really good sign,” said Robert Allen, president and CEO of the Texas Economic Development Corporation.
Houston is one of only two American metros to make the Top 20 in FDI Intelligence’s Global Cities of the Future 2021-22, demonstrating our role in international trade. The financial data firm, owned by the Financial Times, examines the foreign direct investment in hundreds of cities to see where investors vote with their money.
Singapore, London and Dubai took the top three spots, with New York ranked seventh. Houston squeaked-in at number 19. Innovation was a common denominator.
“With low tax rates and generous research grants, Singapore has long positioned itself as one of the world’s most innovative cities,” the magazine concluded. “Singapore recorded the most FDI in research and development between 2015 and 2020 at $210 million, surpassing other cities by a significant margin.”
Texas is known more for its lack of an income tax. But what the state doesn’t take from your paycheck, it extracts through exorbitant property taxes. Texas is not a low-tax state, just a differently-taxed state. Where we break down is in rates of higher education and research and development spending.
Investment in innovation sets the other Global Cities of the Future apart. Amsterdam, Dublin,
Corpus Christi is a top energy exporter in the U.S., but expansion has been delayed.
Shanghai and Bangalore in India have invested in skilled workforces and technology development to earn the foreign investments that make their business thrive.
Texas has made significant strides and has become the United States’ top exporter of technology products for the eighth consecutive year. Hopefully, the new Hewlett Packard Enterprise headquarters in Houston, the cybersecurity companies in San Antonio and Google’s and Apple’s expansion in Austin will add to our tech ecosystems.
Keeping its title as a global energy capital will prove more difficult as the world moves away from fossil fuels.
Foreign direct investments in renewable energy between January and November 2020 totaled $91.5 billion, more than twice the $45.4 billion directed to coal, oil and natural gas, according to FDI Intelligence.
“That makes renewable energy the most coveted sector in 2020 … a crown that the oil and gas sector has relinquished only twice since 2003,” the firm’s analysts concluded.
As the state with the most exports and Houston a center for foreign investment, Texas’ economy is deeply dependent on international trade and the global economy. As the world comes out of the COVID-19 pandemic, opportunities and risks abound.
Saudi Arabia’s decision to keep oil off the market has raised crude prices by creating an artificial shortage. Cold snaps in Asia and North America have boosted natural gas prices, including liquefied natural gas exports from Texas.
The Biden administration plans to spend trillions to stimulate the economy and build new infrastructure, which will spur oil and gas demand and drive up prices as construction revives. This will create a false dawn of a new oil and gas boom that threatens to lull Texans into complacency.
OPEC nations, though, will soon release millions of barrels of crude to protect market share as they have in the past. Once the wind, solar, battery and recharging facilities are built, the demand for Texas oil field services and refining will drop.
Then the world will ask, “What else ya got?”
Will we be manufacturing electric vehicles at factories other than the Tesla factory in Austin? Will Texas Gulf Coast plants export green hydrogen and store carbon dioxide underground to fight climate change? Will San Antonio become an artificial intelligence hub with specialties in cybersecurity and robotics?
The Biden administration plans to spend big on research and development of climate-related technologies, will Texas grab a piece of that?
Texas has a strong position in global markets and a respected brand, but we can lose them. Anticipating future market trends requires constant questioning and evolution, not resting on our laurels.