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Pivoting from International Crisis to Domestic Manufacturing

6.24.16

Company Profile:

biolimeGraphicBioLime Inc. is an 8 year old company representing over five generations of knowledge in the production of high-performance structural coatings. BioLime Inc. seeks to be a manufacturer of colorized lime-based stuccos, plasters, and paints for exterior and interior applications, whose benefits include energy efficiency, low carbon footprint, and green-eco materials largely sourced locally. The bioLime coating products are geared for today’s new build and renovation applications that require high performance, energy-efficient, durable, long-lasting beauty.

Architectural Coatings widely used in today’s marketplace trap moisture in buildings – creating building crises known as “sick building syndrome”. In addition, these “modern” materials have a low lifespan and require unnecessary maintenance and replacement costs. BioLime’s unique system of coatings penetrate and bond deeply by chemical reaction, creating a calcium-rich, micro-porous bonding element that functions as a natural, breathable material and even a biocide. The bioLime coatings are made of a proprietary blend of calcined limestone and natural ingredients. The company’s main office and facilities are in Albuquerque, New Mexico USA with its warehouse distribution centers in Los Angeles, California and Orlando, Florida.

Situation:

This story is about a fast-paced pivot that created more opportunities for growth by addressing the strategic concerns underlying the market expansion of the firm: managing partners and supply chain, reducing the cost of operations and investments, pivoting from importing to domestic manufacturing, and ensuring the sustainability of a Green product. Since 2007, BioLime Inc. has pursued an importbased strategy utilizing its own distribution model. In 2013, the company’s goals were aligned to market entry in the Southwest United States and to establish regional colorization facilities for materials. However, as the economic crisis in Europe deepened in 2015 and US market traction increased, Biolime began looking for sources of materials and investment partners to manufacture in the United States. The company was able to source materials from either coast that would meet its needs, but these sources also put the company in the trade-off position of transporting the majority of its materials to the Southwest US from a coast. This had ramifications on the brand because these distances could not meet a Green Building goal of locating manufacturing within 250 miles of markets. BioLime found itself deep in discussions that would cause it to uproot its plans in the Southwest US and join in joint ventures with investors that were not well understood. Once the New Mexico MEP became aware of the types and quality of materials needed, the NM MEP began searching for experts, facilities, and resources to counter the disruption of the company’s business planning.

Solution:

NM MEP sought to help bioLime Inc. develop its Southwestern US market by aiding with Lean Product Development and some business coaching. The product itself would have to be amended and colorized for Southwestern markets, if imported materials were to be used. Because the local materials were differently colored than the materials from either coastal source, the locally sourced materials yield a product requiring less colorization, in fact a distinctly Southwestern product could be developed and a colorization processing step reduced.

Results:

NM MEP looked for materials and facilities locally and found superior materials located in an advantageous locale. Additionally, nearly all of the facilities and equipment needed to begin production were already on-site, saving the company large upfront investments and an additional $254,000 in overhead, labor, and distribution costs. This supply chain discovery, combined with business coaching on how to best utilize New Mexico’s manufacturing incentives, reversed bioLime’s marriage to expensive coastal manufacturing options and resulted in designating New Mexico as the key manufacturing site for bioLime Inc. with local production partners. The matchmaking between bioLime Inc and materials suppliers would radically reduce bioLime’s manufacturing and start-up costs, saving the company almost $25 million in avoided investment costs related to site, equipment, and professional fees. In the big picture, however, the NM MEP efforts guided a company to address importing pitfalls by:

a) pursuing manufacturing in the US,
b) replacing the company’s supply chain and partners, and
c) retaining the company’s vision by helping the owners retain control of the company and its intellectual property. Transportation distances of materials (AKA the Carbon footprint) have also been radically reduced and the company is able to maintain its Green Building criteria of manufacturing within 250 miles of customers.

The company is able to now offer a new product adapted for the local market, attract new customers looking for Green standard products, and enter new markets in the southwestern US. Had the company collapsed due to the supply chain issues of importation – a distinct risk of the importation model, all of the $250,000 in new sales would be lost and important benefits that bioLime products offer would be lost to the market. Instead, today, bioLime Inc. looks forward to domestic production, new market entry, new partnerships, and new sales of its superior products.

The NM MEP has never stopped pushing for my success from Day 1 that I relocated in New Mexico. The amazing efforts made on behalf of growing bioLime Inc as a manufacturer and innovator have made all the difference to our domestic manufacturing strategy and product innovation focus. NM MEP has been a key asset to me in this effort. I am most pleased to have made the decision to be in New Mexico. Thank you NM MEP. – Brian Coia, Founder/Owner

 

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