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Keystone Edge Recognizes Custom Processing Services

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et=Custom Processing Services,co-founded by Gregg
Shemanski and Jeffrey A. Klinger, specializes in making
particles so small theycan hardly be seen.
Starting in December 2000 literally as a two-man operation,with
Shemanski andKlingerrunning the hightech
equipment only at night because of high electricity
use, the business has grown to employ more than 100
people, with four buildings in two locations, Exeter
Township and East Greenville.
CPS uses thelatest technologyto micronize and ultrafine-grind
materials for a wide range of products, including
chemical powders,waxes, polymers,minerals,
metals, fillers and pigments. In 2011, CPS opened a
state-of-the-art facility to process food- and pharmaceutical-grade
products.
The company is now at the forefront of the industry,
with more than 150 clients from all over the world.
Shemanski, 54, says with considerable pride, “We
were too stubborn to give up.”
What was the inspiration behind Custom
Processing Services?
I worked in grinding and processing for quite some
time, and worked for a few other companies, and nobodywanted
to put in the bettermousetrap I knewwas
out there. So after a while I figured it was time to put
up or shut up.
We did have a betteridea. We also had a great business
plan that we vetted for almost a year before we presented
it. We had it down pattowherelocal bankswere
actually saying,“We don’t do start-ups, butwe’re gonna
do yours.” We had two banks fighting over our business,cutting
rates on each other.
We stayed realcloseto what the business plan was,
and threeyears later(fouryears out from the plan),
we were within half a percent on income, a quarter
percent on profit andwithin $111 of interestexpense.
. . so we knew what we were doing.
The idea was the technology for micronizing and
grinding powders that we installed here. The technology
was there, but we put it together and took it
to the next level. I don’t know why anyone else
didn’t do it, but we did.
What was the biggest challenge in getting it
started?
Getting funding. We didn’t gowith joint venturecapitalists
orwith angels;wewentwith a fewfolkswho
bought a little bit of stock in the building and therest
of itwas privatefinancingwith banks, statefunding
(from the Pennsylvania Industrial Development Authority
andMachine and Equipment Loan Fund) and
the federal SBA 504. Nobody wanted to do it alone.
We got everybody talking together, and then we all
held hands and jumped into the pool together. We
(Jeff and I) personally had to put up our house, our
kids, our wives and our dogs—everything we had.
How has the business grown?
We incorporated in 1998 and we moved here
(2 Birchmont Drive) in July 2000, renting it from
one of our shareholders who purchased it, with the
option to buy it later. My partner and I, with some
contractors, put in all theequipment ourselves, and
ran theequipment. Then Jeffwould domaintenance
on the equipment, and I would come in and do the
sales, the purchasing, the payables, qualityreports,
shipping and receiving.
In January 2001 we hired ourfirstemployeeto help
run the machines. We got more work, purchased a
secondmachine, and hiredmoreemployees. We purchased
this building in 2004. In 2005 we purchased
1 Birchmont Drive; in 2007 we purchased a grinding
facility in East Greenville and put in rail there;
in 2011 we purchased 0 Birchmont Drive for our
pharmaceutical business, andwe’re putting in clean
rooms there.
Now we have morethan 100 employees, and werun
24 hours a day, seven days aweek. We have over 150
clients from all over the world, in the pharmaceutical,
plastics, pigment and food industries.
What resources did you take advantage of to
launch CPS?
(Northeast Pennsylvania) Ben Franklin (Technology
Partners)was absolutelywith us. They helped us vet
our business plan. They put us in touch with the local
funding groups, like the Greater Berks Development
Fund,whichwas fantastic. Then GBDF put us in touch
with the other funding groups (PIDA, MELF).
Ben Franklin put in money ($235,000) that we paid
back for operating expenses . . . thenwe had Joe Dolan,
one of our shareholders, who worked with us to make
sure we had enough cash flow to get through that first
six months.
What could be done to stimulate small business
to be an engine for job creation?
When I look back at the very beginning, we were able
to do well with the help of thefunding agencies, but as
more and more regulations come out, I don’t know if
we could have started our operations 13 years ago
undertheregulations thatexist today. Itcan take up to
18 months to get a permit to put a new piece of equipment
in. We were able to do it in a very short time
frame. . . The regulations have changed in 13 years to
makethem pretty difficult.
What are some of the advantages of being in
Exeter Township, Berks County?
At thetime, itwas an area thatwas a littleeasierto do
businesswith. Nowit’s almost as difficult as Philadelphia
or New York. There’s reasonable access to a road
network. There’s good access to power. There’s good
access to labor markets, for both the skilled workers
and the degreedworkers (engineers, accountants,etc.)
that we use. The area around here has people with a
good work ethic.
What’s the big differentiator for your company?
Ourcompetition has told us,“You’rethe benchmark for
everyone in this industry.” We provide the best technology.
We are always introducing the latest methodologies.
Whatwe had 13 years ago looks like aModel T
compared with what we have today. Some of the technologyis
developed in Germany, andwe are bringing it
here. We havetop-end technology and we know how to
useit.
What’s next for CPS?
The addition of newequipment,especiallyfor our pharmaceutical
business. Also, in the East Greenville site
we’relooking to put some of thelatest technologyin for
ultra-fine grinding.
We have a couple ofcustomers who want us to partner
with themin processing at their sites outsidethecountry,
which we’re investigating right now. That’s five
years’ worth of work!
— by Susan PeñKeystone Edge
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