Davisco Ventures Into the Stone Age

Le Sueur - Sure the recipes, ingredients and equipment are different, but Marty Davis believes his family’s expertise in making cheese will help it produce synthetic stone. 

“The manufacturing techniques and systems actually are quite similar to one another,” said Davis, general manager of Davisco’s food ingredient companies. “The only big difference is the shelf stability”

The Davis family announced this week that it will begin producing a granite-like material in Le Sueur by late spring or early next summer. 

Although the family is best known for its role in leading Davisco, a company that processes milk into cheese and a variety of whey products, it has recently launched a new business: Cambria Co. 

Cambria is constructing a 140,000-square-foot plant that will employ 30-40 people at start-up and 80-100 workers when it begins operations at full capacity. 

The plant is expected to crank out 14 million square feet of tiles or 10 million square feet of countertop material annually. But Davis doubts that will be enough. The company expects to double production within five years. 

The Davises are so confident in the demand for their stone-like product that they’re oversizing the manufacturing plant. The facility now under construction on Le Sueur’s northern edge alongside Highway 169 is big enough to accommodate a second manufacturing line. 

Cambria has reached an agreement with BretonSpA, an Italian company, to become the nation’s sole manufacturer of a synthetic stone product. BretonSpA makes the equipment that Cambria will use on its production online. 

Originally, northern Minnesota was to be the site of the first Breton plant. A company called Technimar Industries promised its plant would bring 214 jobs to Cohasset, a community of 2,180 people west of Grand Rapids. 

Technimar attracted support from many quarters, including Davisco President Mark Davis. 

One of Marty Davis’ former college roommates brought the company to Davis family’s attention, and Mark Davis, Marty’s father, invested $250,000.  

However, Technimar’s $35 million plant never produced a single sheet of the material it planned to market as Stonite. 

In December 1997—six months after Technimar had planned to begin manufacturing Stonite—it announced it was out of money and would need $6 million to complete work on its plant in Cohasset plus another $6 million to cover operating expenses. 

Although it drew some additional investment, the company never got back on track. 

Mark Davis was one of the many unsecured investors in the venture who stood to lose all the money they had sunk into Technimar if the company went belly up. But even when Technimar’s fate was sealed and other investors were cutting their losses, Davis never gave up on the idea of putting together a plan to manufacture the stone-like material. 

“When other people find roadblocks, he finds a glimmer of light. He’s a typical entrepreneur. He finds the opportunity, and he follows it.”

The Davises bid $6.75 million to acquire Technimar’s manufacturing equipment in March of this year. That price was a fraction of the $15 million Technimar had invested in the machinery, but Marty Davis says his family isn’t getting in the stone business at a fire-sale price.  

Taxes, an auctioneer’s commission and other fees bumped the purchase price up to about $8 million, Davis said. 

It was just the start of a growing goal that would include:

• $2 million to relocate the machinery to Le Sueur.
• $4 million for additional mixing equipment that would be needed to make a plant run at full capacity.
• $8.5 million to build a new plan in Le Sueur. 

All told, Marty Davis anticipates the cost of the facility will approach $23 million. He estimates that’s about what it should have cost to start such a plant from scratch. Davis says he still can’t figure out why Technimar was unable to push the project to completion with the more than $40 million in capital they had. 

“They raised more than enough money to start up this company,” Davis said. 

Technimar’s failure left a number of its backers in the lurch. Unsecured investors such as Mark Davis lost everything they had put into the company. Marty Davis declined to discuss exactly how much his father had riding on Technimar’s success. 

Even those entities whose investments in Technimar were secured with assets suffered large losses after the company’s bankruptcy. The Duluth News-Tribune reported in April that Technimar’s biggest investors—the city of Cohasset, the Minneapolis Police and Firefighters Relief Association and the Iron Range Resources and Rehabilitation Board—stood to lose more than $22 million together. 

Despite Technimar’s demise, the Davises never soured on the idea behind the venture.  

Marty Davis said the material BretonSpA’s equipment produces is harder than granite and offers color consistency that sets it apart from any product mined from a quarry. Dupont, the maker of Corian countertops, will be one of Cambria’s customers. 

Phenix Manufacturing, a business that recently built a plant in Mankato, has developed a couple of synthetic materials with the appearance of granite, as well. It, too, has its eye on the flooring and countertop markets. 

Lanny Jass, Phenix’s president, said these products—called Environ and NewStone—are not being produced in Mankato yet but will be eventually. For now, the plant’s production is devoted to manufacturing fiber boards made from soybean and wheat straw.

Phenix’s stone-like products are made from a mix of soy-bean flour, recycled paper and resins. Jass still predicts a promising future for Environ and NewStone. 

BretonSpA’s product is made from a combination of quartz and resins. 

Although Davis fully expects the launch of Cambria’s plant to be a learning experience, he believes the group of people assembled to lead the company will be up to the challenge. “We don’t pretend to know everything about the stone side of the business, but we have a pretty decent idea on how to operate manufacturing systems.”

In the food business, vigilant monitoring of the manufacturing process is an absolute necessity. Davis believes some of the quality-control systems Davisco has developed can also be put to good use in the production of tiles and countertops. 

“We hope to bring the quality of the product to new heights.” Davis also believes some of Davisco’s experience with automation production lines in the food industry could be used to improve the efficiency of the stone line. He said Paul Rolland and Marv Bartlett, who helped design the Davisco’s facility in Jerome, Idaho, could be a big asset. 

To get up to speed, Davis plans to visit Marcello Toncelli, the founder of BretonSpA in Italy, a couple of weeks from now. Davis also will tour plants that are already operating in Italy and Spain.

Davis said Cambria has arranged to hire Ted Guth, a man with more than 20 years of experience in the industry, to manage its plan in Le Sueur. 

The next challenge will be to find workers for the facility, and Davis predicts recruiting them won’t be easy, even though Cambria’s pay scale for workers is expected to begin in the $9 an-hour range. 

A shortage of workers has shortened the cooperation hours at Davisco’s food ingredient plant in Le Sueur. Davis said the facility has been running just five days a week. If the company could bump that up to seven days a week, he said it would boost monthly gross sales by about $150,000. 

But Davis is optimistic Cambria will be able to draw the workers it needs, even if most of them are commuters. The new plant is right off the highway.