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Coated with Success
Pair coax paint firm out of the doldrums

By Yvette Armendariz
The Arizona Republic
May 17th, 2001 12:00:00

After more than 10 ten years at a business, Angel Castellano and Richard Quiroz still were learning to adapt to hard realities.

In 1996, a large client of their Phoenix-based firm, Perma-Finish, which does a form of painting called powder coating, moved operations to Mexico and began doing its own powder coating. Sales fell by $1 million, or 37 percent.

The next year, they lost a founder and guiding force of the company.

"It was one of those rude awakenings," said Castellano, president of Perma-Finish, which began in 1985.

Business had grown to $2.7 million, but the obstacles thrown at them opened their eyes. At first they just worked harder, aggressively seeking new clients. It was working, Quiroz said, but they knew they needed help if they were ever to break the $4 million sales mark.

Last year, Castellano and Quiroz, who is vice president, sought counseling from the Small Business Development Center at Maricopa Community College and the Arizona Public Service Academy for the Advancement of Small, Minority and Women-owned Enterprises. Their sales rose to $4.4 million.

"Sometimes if you let a business go stagnant, you begin to die," Quiroz said. Their success will be honored by the Arizona Small Business Development Center Network at noon today at Phoenix College. Other businesses getting Success Awards are Arizona Contract Services in Tempe Russ' True Value Hardware in Queen Creek, Santa Barbara Catering in Tempe, trainAbility in Scottsdale and Kindelay Communications in San Carlos.

John Henry Smith, a business analyst for the development center, has been helping Perma-Finish with a market-opportunity analysis that will help the company better deliver its service.

"Businesses have life cycles," Smith said. "Small business is like a child. As they get older, they have different needs." One of the Perma-Finish's needs is how to become more competitive, he said.

Castellano and Quiroz also remain part of the academy's business training and mentoring program, which lasts two years.

To expand sales, they are working on an embeddable graphics project, in which metal is painted and a graphic is applied and absorbed into the paint.

Teamwork Crucial

Castellano and Quiroz say besides the help they've gotten, their success was based on the approach that they are part of a customer's team.

"We don't feel that we are powder coaters. We feel we are part of our customers' manufacturing (process)," Castellano said.

Maureen Hughes, procurement specialist for Tempe-based Rockford Fosgate, has been contracting out work to Perma-Finish for a little more than two years.

"They are my favorite vendor. They'll do anything for you to get it done. And they are good people," she said. The company worked with Rockford engineers to develop a grinding machine that helped Rockford present the look it wanted for its painted parts.

Castellano and Quiroz, both 47, have a long history as friends and business colleagues. Both grew up in west Phoenix, near 35th Avenue and Encanto Boulevard. "We've known each other since fifth grade. We used to beat each other up as kids," Castellano said.

The two also ended up in the same industry, architectural anodizing, when they got out of high school. In that field, where they coated aluminum used in high rises and stadium seats for 15 years, they met Jerry Greitzer, who had a vision for entering the powder-coat industry.

"Then the energy crunch came… A lot of customers (of architectural anodizing) went to paint, and that was when we started researching paint and powder," Castellano said.

They chose powder coating for its durability and environmental benefits. Powder is sprayed on to a product and then baked for 15 to 20 minutes so that it clings. Liquid paints must use solvents for the same effect, they said.

Powder coating is commonly used on items such as lighting fixtures, lawn mowers, iron doors and patio furniture.

Steady growth

Greitzer and Castellano became partners in 1985. Quiroz initially was lead foreman.

And the business, for the most part, grew steadily. In its first year, with six employees, the company did $189,000 in sales. Employment hit a high of 107 people with the $4.4 million in sales.

Sales this year have fallen, reflecting the economic slowdown.

"We serve different markets, and some were hit very hard," Castellano said. Among the toughest hit were lighting companies and construction firms. But business is finally picking up again, Quiroz said.

On Wednesday, they had all four paint lines going to fill orders for painted shelves, aluminum intrusions used for window frames, light fixtures and audio equipment.

"We're on course for the second best year," Castellano said.

With such growth, they don't see themselves being a small business much longer. To accommodate expected growth, Quiroz said that in about two years the company will move out of its two buildings it leases, with 52,000 square feet of space. The plan is to buy a building.

Perma-Finish, which employs 73, also is looking at adding another paint line.


 
 
 

 Perma-Finish, Inc. 74 North 45th Avenue Phoenix Arizona 85043 (602) 278-1733 Fax: (602) 278-4671

"Your product isn't finished until it's perma-finished."