New Contract Manufacturer to Expand into Spearfish

Alex Portal | Black Hills Pioneer | October 11, 2021

Through the efforts of the Spearfish Economic Development Corporation (SEDC), Pacific Stainless Product, a contract manufacturer from St. Helens, Ore., will be expanding its business into Spearfish, and bringing more skilled labor jobs with it.

“Pacific Stainless Products is exactly the type of mid-sized, light industrial company we have been working to attract to the Spearfish Business Park,” said SEDC Executive Director Kory Menken. “In addition to creating quality jobs and expanding our local tax base, their manufacturing process is environmentally mindful as they produce very little waste, consume very little water, and use no VOCs (volatile organic compounds). The company has also established a stellar reputation for their corporate citizenship.”

Since 1988, the fabrication company has served the food service, military, architectural, aerospace, and energy industries building components, which are then assembled by the manufacturing companies they work directly with.

“We don’t have our own product line, although we’ve explored that I the past. Typically we make parts and pieces for other people to their specification,” Tom Kemp, vice president and operations manager at the company told the Pioneer. “’Contract manufacturing’ is the best way to explain it, most people understand that.”

Kemp said recently the company has contracted with several manufacturers in the semiconductor industry to build computer chips.

“Anything that needs a computer processor or computer memory requires silicon wafers, which are a semiconductor,” Kemp said. “So we’re helping make the tools that make the computer chips.”

Kemp said around 80% of the world’s computer chips come from Asia, so as of right now, that’s where a lot of their semiconductor products wind up.

“So you have that Chinese money flowing back into the community through our wages and our payroll,” he said. “So it’s nice to see some of that money flowing back across the water.”

But as the pandemic showed the world the global supply chain shortage, expecting to get most of what you need from one place can be bad for business. With several computer chip manufacturers announcing facility expansions here in the U.S. helping to support a more diverse industry here in the States is an important step in reclaiming America’s role in that supply chain.

“Samsung and a couple others have announced big factories going into Texas, Chandler, Ariz., is another big hot spot for the United States and then Hillsboro, Ore.’s a big hot zone for the United States for manufacturing computer chips.”

As part of the company’s efforts to mitigate supply chain bottle necking, Kemp said they were asked to build a facility at least 500 miles away from their plant in Oregon. That’s where Spearfish comes in.

“It just seemed like that western side of South Dakota was really beautiful and we could convince some people to move there and then, in tern we’ll be able to hire and train people from the local area and build up a manufacturing base there,” he said.

Kemp said three current employees will be making the move to Spearfish once the plant is built, but they’ll need to recruit at least 15 more employees to meet the orders once it’s up and running.

“Fifteen is, like, the bare minimum to get the plant to work, and I’m sure they’ll got to that fairly fast, and if we have the work for it, it could grow pretty rapidly,” he said. “It seems that every time I add capacity, our sales team goes out and sells that capacity and then I don’t have that extra capacity anymore.”

Kemp said they hope to break ground on the new 30,000 to 40,000 square foot facility in the spring and is looking forward to expanding the business to the Black Hills were he says he thinks they’ll fit right in.

“We’re from rural Oregon, you know, all of our employees hunt and fish, and ride motorcycles on the weekends,” he said. “We’re not big city California people moving in to change your way of life, … we want to be part of the community.”

For more information about Pacific Stainless Products, visit www.pacificstainless.com.

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