Houston Chronicle

Plastics firm’s COVID panels fuel turnaround at new headquarte­rs.

- By Katherine Feser STAFF WRITER katherine.feser@chron.com twitter.com/kfeser

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.

 ?? Steve Gonzales / Staff photograph­er ?? A&C Plastics resumed an expansion project after demand for plastic sheets skyrockete­d with market demand for pandemic-related safety products such as face shields.
Steve Gonzales / Staff photograph­er A&C Plastics resumed an expansion project after demand for plastic sheets skyrockete­d with market demand for pandemic-related safety products such as face shields.
 ?? Tamir Kalifa / New York Times ??
Tamir Kalifa / New York Times
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 ?? Yi-Chin Lee / Staff photograph­er ?? As the state with the most exports and Houston a center for foreign investment with the Ship Channel, Texas’ economy deeply depends on internatio­nal trade.
Yi-Chin Lee / Staff photograph­er As the state with the most exports and Houston a center for foreign investment with the Ship Channel, Texas’ economy deeply depends on internatio­nal trade.

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