Sapa Extrusions is exceeding expectations

Company at Port of Vancouver grows faster locally than it had planned, with more growth possible

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Three years after setting up its first Vancouver manufacturing operation, a Norwegian-owned business is exceeding its own expectations at the site. Sapa Extrusions employs more people in Clark County than it originally planned, said regional plant manager Mats Johansson. It is pursuing a certification that could lead to more hiring. And Johansson said he sees a long future for the aluminum-products maker in the community.

Sapa’s 110 Vancouver employees work on three specialties within the giant multinational’s product line, Johansson said:

• The local plant is the only place, companywide, where manufacturing dies and tools are made for use in shaping, or extruding, Sapa’s aluminum components.

• It houses Technical Dynamics Aluminum, or TDA, a specialized crew that makes small, delicate parts used in aircraft and medical devices.

• And an extrusion press line makes larger and less delicate aluminum products, similar to production at two other Sapa locations in the Portland metro area.

The company does not name its clients, but, according to the Port of Vancouver, electric car company Tesla Motors recently visited the local plant, and Johansson said that aerospace companies buy its parts through third-party vendors. According to the port, other clients include Volvo, Wing Ladders and Milgard Windows and Doors.

Sapa Extrusions is part of Sapa AS, the world’s largest aluminum profile company. Based in Oslo, Norway, Sapa’s parent companies employ 23,000 across 40 countries.

When Sapa came to Vancouver, it expected to ultimately grow to 100 workers here. With demand higher than anticipated the company has already overshot that goal by 10 percent, which Johansson attributes to high production demand from the dye and tool manufacturing line.

“But I also expect the TDA part of the business to grow,” he said. “We are just in the process of getting certified this year — it’s called AS 9000, or the Aerospace Basic System — and when that is complete we think that we are going to get more business from the aircraft industry.”

The regular extrusion press line, which is operating on two shifts, could ultimately expand to three shifts, “so there is the potential to employ even more people,” Johansson said — though he added that there are not immediate plans to expand that operation just yet.

Yet before Sapa embraced Vancouver, the company first rejected a proposal to move north of the Columbia River.

“We actually first started talking to Sapa back in 2006,” said Curtis Shuck, senior sales director and head of economic development at the Port of Vancouver. By 2008, company had submitted preliminary plans to Vancouver officials as it explored the possibility of building a new plant on undeveloped port property.

“Then the economic downturn hit,” Shuck said. “It was not the right time.”

Johansson said 2009 was a particularly challenging year for Sapa, across the entire multinational corporation. The company pulled back from expansion plans. “Since then, we have been able to pick up business year by year.”

And when the time came to again consider growing within the greater Portland metro area, Sapa remembered its early conversations in Vancouver.

“We wanted to be as close as possible to our head office off Columbia Boulevard in the north part of Portland,” Johansson said. “We found a couple of different warehouses that we could have converted into manufacturing plants in Portland, but we also looked across the river, and we felt a lot more interest and support from the Washington side than from Oregon. We had a good relationship with the port to start with.”

Shuck, at the port, said that economic development officials have some disadvantages when trying to woo businesses to the north of the river: Oregon offers more tax incentives and financial boons than are available in Washington state. But the port — while compelled by law to seek market-rate rent — also has the flexibility to design lease agreements that are favorable to tenants, and to seek public funds to upgrade its facilities.

According to public records that summarize the lease agreement, the port borrowed $800,000 from the Washington Department of Commerce and set an additional $500,000 budget to fund upgrades and improvements at a 142,000-square-foot Kotobuki Way building that once housed Panasonic operations. Sapa agreed to invest $9.5 million in equipment and building improvements, and to pay another $9.5 million in rent and related fees over the course of its 15-year lease.

According to Shuck, rent will initially be lower than Sapa might have found elsewhere, but over the course of the lease agreement the port estimates that it is meeting its market-rate obligations. “Market rate” has been a hot topic in recent years as another tenant, Northwest packing, has sought rent concessions.)

The ease of working with Clark County and Vancouver officials was as important to Sapa as the financial side of the arrangement, Johansson said. “We had a lot more interest from the Washington side than from the Oregon side to get things started and get things going.”

“We are more than your average landlord,” said Shuck. “We are there with the city of Vancouver, the Columbia River Economic Development Commission. We had already put Sapa through an internal vetting program when they came to us in 2006, so when they came back in 2011 it was a lot easier. They were pre-vetted, and we were ready.”

Three years in, port officials and Johansson continue to have high praise for one another. In July, the port awarded Sapa its annual “Facilities Improvement Award,” praising the company for local investments that have been about more than just the bottom line. When Fruit Valley neighborhood residents complained about noise at the plant, Sapa was quick to add insulation to address the problem, port officials said.

Johansson said he’s thankful that neighbors have worked with his company to address their noise concerns — and that he’s also thankful for the port’s efforts and the support his business has found since locating to Vancouver.

“The Sapa story shows the power of relationship building,” Shuck said. “Sometimes there are long-term endeavors that are about more than just an initial contact. It’s about creating that connection. As we’ve seen, the results can be fortuitous.”