From Canada to Kentucky: The Story Behind a New Manufacturing Expansion

Episode 37: In this episode of the This Global Trade Adventure podcast, we interview Vikram and Samir Kalia of E. Hofmann Plastics about their company's decision to invest in a new manufacturing facility in Madisonville, Kentucky. The brothers share the history of their family-owned business, which has grown from an Ontario-based custom plastics operation into a leading producer of rigid plastic packaging serving multiple industries, in various countries. The conversation explores how relationship-building, industry connections, and strategic market expansion ultimately led them to Kentucky, including the state's business climate, available infrastructure, workforce opportunities, and proximity to key customers throughout the United States. Gain insight into the company's expansion strategy, including its operations in Canada, Europe, and now the United States. The discussion showcases how international investment and strong business relationships can create economic opportunities for both companies and communities.

Key Themes:

• The E. Hofmann Plastics Story: From Austria to North America
• Why Madisonville, Kentucky Won the Expansion Project
• Building a Family Business Across Generations
• Manufacturing Growth, Infrastructure, and Economic Opportunity
• The Future of E. Hofmann Plastics and US Expansion

Episode Transcript:

Jim Ray:

And friends, welcome back. We are still here at the Gatton College of Business and Economics at UK's campus, and I'm very proud to introduce two gentlemen to you, Vikram and Samir Kalia. And these guys are actually from Ontario, Canada, but they're representatives of E. Hofmann Plastics with a very interesting connection to Kentucky. So gentlemen, welcome to the podcast.

Samir Kalia:

Thanks for having us.

Vikram Kalia:

Thank you.

The E. Hofmann Plastics Story: From Austria to North America

Jim Ray:

Absolutely. Glad to be here. So how do you guys wake up one day and go, you know what? I think we want to get in the plastics industry. What was the background that kind of got you there because you're brothers, right?

Samir Kalia:

Yes.

Jim Ray:

Interesting. Okay, great. So let's talk about that.

Samir Kalia:

So, my dad actually started this company about 40 years ago. So, he actually used to be a supplier. E. Hofmann Plastics was a company, they came over from Austria and they came over for a customer and that customer didn't do well. So effectively when my dad joined the company, they had no sales. So he used to sell stretch wrap, stretch wrap automation. Had this opportunity with a couple other guys and they got in. They were kind of custom molders until probably the mid-nineties doing briefcases, coat hangers, just odds and ends and then kind of stumbled upon buckets. And as time went on, we went more and more focusing into packaging.

And then in 2007, 2008, my dad took over the company solely. And then from there we've just primarily gone straight through packaging. So, we do injection molding, we do our own in-house extrusion, we do thermoforming. Kind of the elevator pitches, everything from a five-gallon pail down to plastic K-cup and everything in between. Meat trays, portion cups, dipping sauce containers, deli cups, a lot of gypsum buckets and food service, chemical construction, kind of everything in that wheelhouse that uses plastic, rigid packaging.

Jim Ray:

And then so Samir, you look over to Vikram and say you're Director of Sales, go make it happen. So that's kind of how that happened. So how are you identifying your client base? Where do you begin that process? I guess? Because like you said, you sell basically anything, you can do almost anything under the sun. How do you begin to select this could be someone we could work with?

Vikram Kalia:

That's a really good question.

Jim Ray:

That's my one for the podcast.

Vikram Kalia:

We really don't discriminate whether you're packing pickles, whether you're packing mayonnaise, gypsum, driveway sealer, our open head containers, for example, are very versatile product that a number of industries use. And I think going back to the products that we do have, our data is the most insecure salesperson you've ever met. And the way he looks at it is that certain industries require that you have a whole family of products. And so what we'll decide is, okay, you can't just make the one size because lots of customers can't source one specific pail from one supplier and then the other four, five from another supplier. So, in order to really make a compelling value proposition, you've got to have that whole portfolio and come to the door there. So I think when we're identifying customers, usually they either have that basket, they already utilize that basket of products that we utilize, or we're interested in making an investment in one or two products because they might already buy a two-liter pail and now they use a lot of other containers. So why not get into that vertical as well?

Jim Ray:

Perfect. Just grow with them and show them something.

Vikram Kalia:

I would say there's been an evolution from construction, more seasonal customers to food customers that are way less seasonal. And now today, because we crossed so many industries, we really have maybe two slow months a year. That's about it. Different products might peak and hit valleys, but there's no real seasonality.

Jim Ray:

Okay, interesting. So now you guys are up in Ontario and you've just recently made a pretty big announcement. We're all excited about that. Do you want to let us in on the new secret?

Samir Kalia:

Yeah. So we made a big investment into Madisonville, Kentucky. We're super excited. So phase one is going to be about a hundred thousand square foot facility, and it's going with the theory of build it and they'll come. So we're coming with no existing customers. We're kind of building a blank slate, putting in all the infrastructure that we can kind of drop machines in and run whatever people need.

Why Madisonville, Kentucky Won the Expansion Project

Jim Ray:

Now, you guys sitting in Ontario, you just look at the world and throw a dart at the wall. Go, huh, guess it's Madisonville. How did you come to identify? I think in the presentation that you guys gave to the group today, I think I heard you say it was through a series of conversations and it was just kind of not really strategic discussions at first. It just said, oh, really? Really? And that led to another discussion, another introduction. And then things kind of came.

Samir Kalia:

Ironically, the idea of Madisonville came over a few classes of bourbon at a local restaurant from a local Kentucky guy that's a technician for one of our suppliers who said, Hey, why don't you look at Kentucky?

Jim Ray:

Interesting.

Vikram Kalia:

So that's actually, we should unpeel that a little bit more. So, one of the things as we've, my brother and I have been in the business for eight years now, and the way that one of the things that our dad has taught us to always go above and beyond is when there's a visiting technician coming in from a supplier, take them out for nice dinner at least once a night, they're away from their family. Usually they're visiting from a foreign country. Take them out for one night. And that's something that we've stuck to. And thankfully for that you get a lot of input from people from around the world. And thankfully this one gentleman who's from Kentucky, it was maybe four years ago, four or five years ago, and goes into the repository and we didn't act on it immediately. It wasn't until we made this decision we're going to go to the US. Chicago didn't work out, Indiana didn't work out. And then obviously Kentucky works out. We're like, wait a minute, our buddy Jeff told us about this great area and opportunity and find that old email, and there we are.

Jim Ray:

There you are. It's amazing the old school relationship building. And a lot of times that's done one-on-one sitting across the table from somebody and just getting to know them. And it's amazing where those conversations will lead. And so again, it led you guys from Ontario to Madisonville. So just a fantastic move, guys. What was it specifically about Madisonville that said, you know what, this might actually be doable for us?

Vikram Kalia:

Well, we had some friends there and first and foremost we found the site, fantastic site, build-ready, permits were done, rail car siding there.

Jim Ray:

So this is totally a greenfield project. You're not buying an existing structure.

Vikram Kalia:

Yeah, this is greenfield. So we're starting construction soon and so couldn't be a better blank slate. As we're investigating this, some of our key contacts in the industry are from that exact town.

Jim Ray:

You're kidding.

Vikram Kalia:

And then we just start to peel back the onion and our contacts there are introducing us to this person, that person, he knows the builder, and it's a true small town Kentucky story. Everyone we meet knows each other and they're all very forthcoming and very helpful and just a great feeling from the start.

Jim Ray:

It sounds like this was meant to happen. I mean with that little conversation you had four or five years ago, like you said, it just kind of goes into repository and all of a sudden, Hey, wait a minute, let's dig up that email, and then suddenly the dominoes start falling. That's fantastic. As it relates to the tariff discussion, that's been a big theme in this large conference that we've had today. How are you guys seeing this? Is this a play that allows you to hedge as a domestic now or soon to be domestic manufacturer, or how does that work in your market?

Samir Kalia:

So our products fall under the USMCA, whatever the last trade deal is. So right now there's no tariffs on any of our products. Like Vikram said, there's like 60, 70% of our business is already in the United States. So the tariffs for us wasn't the driver for this. This is something like three years ago or something. I think every other week one of us is on a plane flying somewhere in Illinois, somewhere in Indiana, somewhere in Tennessee, somewhere in Georgia looking at facilities. And it was just kind of a timing thing with the tariffs. The tariffs for us from a selling perspective haven't really happened. Obviously from a buying perspective of machinery, tariffs, I think are now any machine coming into the US that's not us made. And in our world, there's not many US made machines for what we do.

Jim Ray:

Right, right. Amazing. But at this point, you guys have the wherewithal, I think it's amazing that you're doing this, Hey, we're going to build it. And the theory is they'll come. So a fantastic production facility that will come online about, did you say about a year from now? So we should see it up and going.

Building a Family Business Across Generations

Jim Ray:

As far as it relates to being involved in a family-owned business, that's a whole different structure for a lot of people. There are a lot of listeners out there who have actually grown up in that infrastructure and that presents its own opportunities and its own challenges, at times. Is there any word of advice? I know I didn't really prep you for this discussion point, but as not only brothers, but also working in the family business, how do you think it's different for you guys versus for somebody working for just a corporate company? Any insights there?

Samir Kalia:

I think we're really fortunate that we grew up very close to each other. We grew up in a small town and there weren't too many kids on our streets and we're far from town where all our friends were. So we just played together. So our whole lives, whether it was golfing together, playing backyard hockey, basketball, baseball, whatever, it was always together. So I think that was really important. And then we yelled at each other and swear at each other at work, but then two minutes later it's to what we're eating for lunch kind of thing. We live around the corner from each other, a good 30-second walk. And so we're quite fortunate that we're able to kind separate the two and we work, you get mad at each other, but then we still have dinner together and still going to go golfing together, at the end of the day.

Jim Ray:

It comes back to the relationship, that core foundational thing. I've seen a lot of families struggle with that. It starts out like, Hey, this is going to be a great idea, and suddenly maybe not so much. All that stuff from third grade comes back up.

Vikram Kalia:

It's hard. And I think you definitely have to compartmentalize, okay, this is business.

Jim Ray:

Well said.

Vikram Kalia:

This isn't personal. And I think the other piece to it is when everyone's in the boat driving towards growing the business, we have a lot of fun. And so I think there's a lot of pieces to that. We understand what context it is that we're talking about as a family or is it business? And we have a good relationship. And then most importantly, we have fun growing a business.

Jim Ray:

It's quite the adventure, isn't it?

Vikram Kalia:

Yeah. And I don't think we would, if the business wasn't growing, I don't know, it would probably change the dynamic completely. And so I think it's important to emphasize that if you continue to grow and invest, it makes everything more fun.

Jim Ray:

I think you've got that common focus that allows everybody to go, okay, we're going in this direction, let's go.

Samir Kalia:

And we're also very fortunate. Our dad, when we came in, it wasn't like, Hey, you're doing this and you're doing this. When I came in, we needed to build a warehouse. He was like, go build a warehouse. And I'm like, I don’t know how the hell to build a warehouse. So we figured it out. So he really let us kind of gravitate towards our strengths and what we want to do. And there was never any restriction was if you want do it, try it. Worst thing is you just fail and we wake up tomorrow and figure it out. We're not saving lives.

Jim Ray:

What an opportunity. Wow.

Vikram Kalia:

Yeah. A very unconventional approach. Yeah, there's never really been roles to this day. We kind laugh for me to introduce myself as Director of Sales because there's days I'm more interested in what kind of automation we're buying or a certain employee or we're focused on the business as a whole. We see it as one piece.

Jim Ray:

It's just a title at that point. That makes sense. Now, how involved is your father still in the business?

Samir Kalia:

I mean, he does what he wants. He helps us grow. We recently purchased a company in Czech Republic.

Jim Ray:

Wow, okay.

Samir Kalia:

It does straight thermoforming, small yogurt cups, water cups. So he's more worried about helping us grow and that stuff. And he let us run the day-to-day what's going on in Orangeville. We've put together a really, really solid team there. We're extremely fortunate with all the people that we have there where we're able to come try and figure out how to grow the business. And we know that there's five, six guys back there that'll do whatever needs to get done.

Manufacturing Growth, Infrastructure, and Economic Opportunity

Jim Ray:

They can make it happen. Fantastic. Now how geographically diverse are you guys? You're based out of Canada, but now you've got the Madisonville plant, you've got the Czech plant over in Eastern Europe, where else?

Samir Kalia:

That's it.

Jim Ray:

Is that it? Wow, okay. Now, do you have multiple facilities in Ontario or is that kind of the home plant?

Vikram Kalia:

Just the one plant. And that's another key. That was another catalyst I would say for us coming to the US is we have available land and grow and expanding Canada. And I think we will eventually. But the thing was the cost to building Canada relative to Kentucky. Time to build in Canada versus time relative to building Kentucky.

Jim Ray:

Is that weather related or regulatory?

Vikram Kalia:

Both. So you definitely have less buildable days to build in Canada and then regulatory with permits. We're in a fantastic town and I think we get things done quite efficiently, but nothing compared to this, the way that things are moving in Kentucky.  It’s like lightning.

Jim Ray:

I'm glad to hear that. We don't always hear that side of it. It's like, wow, this is taking, that's what we know, but having you all come across the border and go, no, actually this opportunity in Kentucky is a little bit more efficient. So that's fantastic to hear. I wasn’t aware of that.

Vikram Kalia:

For economic development to be selling a build-ready piece of land. There's a pad there ready to go? You don't hear about that.

Samir Kalia:

Unheard of.

Vikram Kalia:

Yeah, unheard in Canada.

The Future of E. Hofmann Plastics and U.S. Expansion

Jim Ray:

Outstanding. So what's next for you guys? We're still a year out on the Madisonville facility, but what's next?

Samir Kalia:

Fill Madisonville.

Vikram Kalia:

Fill this. And I think one thing that's exciting, we inherited a facility in Orangeville with my rate of history, my rate of, I don't want to call them problems, but challenges and just the layout alone. It was originally a building built to make telephone wires, then tractor trailers. And so we're the third tenant of this building. And so finally we're going to get to build something on our own terms with our own layout. We're going to own it start to finish.

Samir Kalia:

For better, for worse.

Vikram Kalia:

But it's very exciting at this point to see what kind of state-of-the-art plastics facility we could build and rinse and repeat. Beyond this, we’d probably look in the southwest. We might look in the southeast. Yeah.

Jim Ray:

We've got 120 counties. So if you get tired of Hopkins County, we can introduce you a few more. Love to have you guys here. Guys what a fantastic story, a fantastic story. And thank you for your trust and the people of Madisonville down in Hopkins County, good people down there, I'm very familiar with that area and just exciting news for us. And you think when it gets up and running, it's going to be, what? About a 100, 150, 160 employees? Is that full-time or what do you think?

Vikram Kalia:

Yeah, so I think what we anticipated will run 24/7 across 4 different shifts and between warehouse production, customer service, whatnot. Yeah, we'll have a fully staffed facility.

Jim Ray:

And you'll do injection molding and thermal?

Vikram Kalia:

Correct.

Jim Ray:

Okay. Okay, perfect. Do you guys have a website that I could reference here? So if somebody's looking at you guys going, Hey, we do need a supplier in that area, they might be able to connect with you. Is there a good website to use?

Samir Kalia:

Yeah, it's just HofmannPlastics.com (one F two Ns).

Jim Ray:

Okay. Is that .com or there's no .ca or anything like that?

Vikram Kalia:

Not for us. We're .com and the plastics is plural. That's it. It's a bit of a mouthful, but yeah, if you search up E. Hofmann Plastics, you'll find it.

Jim Ray:

Outstanding. Gentlemen, thanks for your time and once again, congratulations, best of luck and hope to see you down in western Kentucky sometime soon. So all the best.

Friends, I hope you got a kick out of that discussion. I love it when you see a family-owned business really hitting its stride and finding some opportunities. And for the people of Madisonville in that region, what a great opportunity for them as well. So very, very happy to do that. And just glad to have this conversation here on the podcast.

I'll put a link to their website in the show notes. So if you're listening to this and you see a whole bunch of writing down there below the podcast player, those are the show notes. And look for those links and if you are a vendor, maybe a potential client, reach out to them and say, Hey, we heard about them on the World Trade Center's podcast. And hopefully that'll connect and lead to some additional revenue opportunities for everybody.

So, from all of us here at the World Trade Center Kentucky's This Global Trade Adventure podcast. Thanks for listening. We'll be back in a couple of weeks.

To Learn More about E. Hofmann Plastics: 

Website:  www.hofmannplastics.com

 

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