🔒Waterbury manufacturer Seidel pushes back against offshoring with major local expansion

For Waterbury-based Seidel Group, the answer to a long-running trend of manufacturing migrating to Asia and south of the border has been to expand, acquire other companies and build a new facility.

“We merged basically five companies” over the course of eight years, said 69-year-old Michael Ritzenhoff, owner and chairman of the Seidel Group, which specializes in metal forming, anodizing and decorative finishing for aluminum alloy parts across various industries.

“The vision you could say was insane,” Ritzenhoff joked. “Either this guy is too old and is insane, or it was a really bold vision. I prefer the second.”

So far, it would seem the latter is correct.

Ritzenhoff said his sales base is expanding with customers who appreciate the efficiency and vertical integration of the expanded company.

Without the move, the manufacturers that once depended on Seidel to finish their metal goods could have disappeared, followed by Seidel itself, he said.

Far and away, Seidel receives most of its demand from the cosmetics industry. Annually, it churns out hundreds of millions of caps and collars that go on spray bottles and other containers.

Through direct sales and intermediaries, Seidel parts are found in most of the major brands, including Revlon, Estée Lauder, L’Oréal and others.

Seidel also makes threaded connectors that go at the end of garden hoses. Once made of brass, these are mostly anodized aluminum today.

The company has, in the past, made parts for pharmaceutical and automotive applications.

Supply chain resilience

Ritzenhoff came to Waterbury from Germany in 1986, bringing an offshoot of his father’s electropolishing and anodizing coating company to the Naugatuck Valley.

He founded Seidel Inc. — now the Seidel Group — in a building that had once been part of the mammoth Chase Brass & Copper Co. metalworks complex off Thomaston Avenue, along the eastern bank of the Naugatuck River.

The idea was to be close to customers.

In those early years, the Naugatuck Valley was one of the country’s top centers for metal stamping and eyelet production, and a key source of material for the cosmetics industry.

At least 15 companies fed Seidel parts for buffing and coating.

As competition picked up from lower-cost manufacturers in Asia and Latin America, Seidel saw its main customer base fade to three area manufacturers. To secure its future, Seidel planned to buy these companies, as well as a Torrington business that produces plastic components.

“When we started, the customers who made the metal parts basically sent their parts to us and said: ‘Please finish them and make them gold, shiny, silver, satin — and then they sold them to the customers,” Ritzenhoff said. “We came to the conclusion that we needed a new vision, and basically the vision was to create a vertically integrated one-stop shop.”

That integration promises to trim production costs and provide a more resilient supply chain, a premium offering considering ongoing global disruptions that started with the COVID-19 pandemic.

The strategy launched about eight years ago with the purchase of Romatic Manufacturing, a metal-stamping company based in Southbury. Next, Seidel bought metal-fabrication manufacturer Eyelet Crafters, which operated out of a roughly 30,000-square-foot building in Waterbury’s South End.

That was followed by the acquisition of metal-fabrication company Eyelet Design Inc., which operates in a 120,000-square-foot building next to Waterbury’s Brass Mill Center mall.

The latest acquisition came in 2021, with the purchase of Torrington-based Quest Plastics.

Over eight years, the company has grown from about 65 employees to 170. Seidel officials declined to disclose annual revenues.

Seidel President Brian Stach said the company’s vertical integration prompted Bath & Body Works to increase its order from about 1 million to 1.5 million units of spray pumps and caps in 2023. Now, Bath & Body Works’ orders are on track to top 2.5 million units in 2024, he said.

Other companies are also increasing their orders, Stach said.

With greater control over production, Seidel is hoping to tap new opportunities in new industries. That could include making unique caps for specialty beverage companies, components for the nutritional industry, or more work with the medical sector.

New construction

Seidel’s new strategy has manifested in a newly built, 60,000-square-foot addition to its Thomaston Avenue headquarters.

Torrington-based Borghesi Building & Engineering led the construction project over the past year. The city granted a temporary occupancy permit in January, and Ritzenhoff said he expects to consolidate most of Seidel’s three leased off-site locations into the building by March.

That will result in energy savings and additional efficiencies as components that used to be shipped over miles will be shaped, smoothed and coated in the same building.

A Seidel-affiliated limited liability company borrowed $4.24 million from the U.S. Small Business Administration for the building project through the federal agency’s 504 loan program, which was matched with a combination of funds from participating lender M&T Bank and equity tallying $5.19 million.

Ritzenhoff said the 10% down payment and 25-year term offered through the SBA’s 504 loan program was crucial. The program divides a loan up, with a traditional lender funding 50%, the SBA covering up to 40% and borrowers generally inputting 10% equity.

The down payment can rise as high as 20% in certain conditions.

Seidel’s 504 loan is paying for the building, its fit-out, some new machinery, rooftop solar panels and more.

Seidel was introduced to the program and Hamden-based Community Investment Corp. — an SBA-affiliated nonprofit lender — through M&T Bank.

“This was such a bold vision, buying four companies and putting them into one building,” Ritzenhoff said. “It was bigger than a company our size normally can handle. The only way to do that was the 504 program through M&T Bank and through CIC/SBA.”

Seidel’s loan closing was delayed for about a year, as the company first needed to perform environmental studies to ensure there was no mystery industrial pollution that would spike building costs.

Once that was satisfied, however, the SBA approval process was smooth, Ritzenhoff and others said.

“The SBA has really been easy to deal with,” said M&T Senior Vice President Edgar S. Auchincloss. “In the past 10 years, they’ve transformed the way they do business.”

CIC President and CEO Louis G. Silva said Seidel is a perfect fit for the 504 program, which aims to create and preserve jobs.

“This is a perfect example of where we see the government’s money being put to good use,” Silva said. “It has a ripple effect.”

Waterbury Mayor Paul K. Pernerewski Jr. said the city is happy to see Seidel, a long-term fixture, taking these companies under its wing.

“The fact they have such confidence in the future means a lot to us,” Pernerwski said.