Maine Companies Optimistic about 2009 Business Climate

Pointing to growth in their businesses in 2008 and changes within company infrastructure to ensure continued gains, members of the Maine chapter of The Board Forum® CEO Roundtable www.theboardforum.com , created by in 1999 by Laurie Kirk to provide CEOs a sounding board on C-level issues, are optimistic about the 2009 business climate.

“We had an exciting year and increased revenue by 40%,” according to Carrie E. Baker, CEO of C. Baker & Associates, an employee benefits/insurance brokerage firm based in Yarmouth, Maine.  “We diversified by opening a retirement division in the late spring, for another value-added employee benefit service to existing and new clients.”

To accommodate its new business growth and maintain its high standard of service, the agency in fact hired two full-time professionals in 2008.

“One thing we have noticed – and it is paying off greatly for us – is that employers are expecting much more from their benefit broker in this down economy,” said Baker, who opened the doors to her firm not quite four years ago.  “There is no room for a benefits/insurance broker who will rest on his or her laurels, offering employers cookie-cutter benefits with increases that are unimaginable…especially in Maine.”

Voicing optimism over business prospects in 2009, Baker said she projects “strong growth.”

“If we continue to work the way we have, we will have another successful year,” said Baker.  “And I’ll be able to sleep at night knowing that we have done our part to help employers and employees not only survive, but thrive.”

David Gordon, President and CEO of Katahdin Forest Products in Oakfield, Maine pointed to a mixed 2008, with a 4% decrease in high-end cedar log home sales and an increase of 14% in the 35-year-old company’s cedar fence division.

“We also picked up 10 new  home dealers and five new fence dealers last year and expect to pick up more in both categories in 2009 as a result of the number of companies that are either financially stressed or going out of business,” said Gordon.

Early numbers for 2009 show Katahdin Forest Products up 20% in its log house division and an increase of 17% in fencing.

“While I don’t expect either of these numbers to hold the entire year, I believe a 10% increase in both categories is realistic and maybe even a little conservative,” he said.

Gordon purchased an existing sawmill February 11th to increase product output and meet higher production goals set for 2009.

“We have gained substantial market share throughout this economic downturn and expect a very substantial increase when the economy turns around,” he said.

James Buchanan, CEO of the health and wellness company ZoneLabs, Inc. said that a re-branding campaign of the company he has owned for three years “has been helpful.”

“We sell direct to consumers and physicians with some retail and saw our top line sales increase by 15% in 2008,” said Buchanan, noting that ZoneLabs products include food, supplements and Omega-3 concentrates.  “As the economy slides, it seems people are looking for aspects in their lives they can manage and control and health is one of those areas…that should be beneficial to our company in 2009.”

Buchanan, co-facilitator of the Maine chapter of The Board Forum® and trustee and board member of the University of Maine’s Osher Library said ZoneLabs did some belt tightening last year by visiting all suppliers to ensure “we had the right terms in costs and surcharges.”

“By keeping cost acquisition down, marketing to our existing base of customers and doing an efficient e-mail campaign to broaden our base, we were able to enjoy a good year,” said Buchanan, noting he is “holding my breath for 2009.”

“Given the current economic climate, everyone is concerned,” he said.  “But with people focusing on health and wellness, our expectations are positive.”

The year 2008 saw a hike in sales of about 4% at Kenway Corporation, an Augusta-based manufacturer of corrosion resistant fiberglass products primarily for the pulp and paper, power plant and Maritime Marine boat industries.

“In 2008 we devoted a lot of our management resources and money bidding on a Navy project for composite rudders,” said Ken Priest, President of the 62-year-old company.  “We were the successful composite bidder, but the Navy had now decided to go with standard steel rudder due to lower cost and the Navy’s desire to preserve the union ship yard (Bath Iron Works) that produces the iron rudders.”

Kenway Corporation is attempting to mitigate this project loss by working with the Navy and Bath Iron Works, as there remains interest in a composite rudder – at this time, however, the Navy has no development funds for the product.

Kenway Corporation is optimistic about 2009. In January 2009, Kenway won the American Composites Manufacturing Association’s 2009 Award for Technical Innovation for Corrosion Applications and is aggressively marketing its technology for corrosion applications.

“Our competitors do not have access to this technology at this time; we are the only ones using it and plan to go after market share with it,” said Priest.

Kenway Corporation recently doubled its manufacturing capacity, which allows the business to consolidate two satellite shops, thereby reducing operating costs.  The company also plans to enter the alternative energy market – specifically wind turbines for location off the coast of Maine.

Charles “Wick” Johnson, CEO of Kennebec Tool & Die in Augusta and Trustee of the University of Maine, said his company “saw consistent growth in all areas in 2008; up substantially over 2007.”

Johnson said that gain is due in large part to the company’s focus on its internal production methods, quality of customers and consistent prospecting for work within its customer base.

“Half of our work is long-term and predictable and the other half less predictable,” said Johnson, noting that while the fourth quarter of 2008 was solid, “work did not come in as quickly in January of this year as it did in October of last.” 

“But we’re optimistic about 2009 in a big picture sort of way,” he said, sharing that after 36 years doing business as Kennebec Tool & Die, the company will re-position itself and soon change its name to Kennebec Technologies.

“In 2009 we’ll be somewhat smaller in staff as a result of a reduction in staff, but we will remain strong and aggressively look for more work,” said Johnson.  “There remains a lot of opportunity in the economy we’re dealing with…it’s just a matter of finding those opportunities.”

THE BOARD FORUM® CEO ROUNDTABLE www.theboardforum.com