Cape Fear Precast’s owners placed a big bet starting their own company, but the gamble paid off.
By Kirk Stelsel
NPCA members have all kinds of interesting stories to share about how their businesses started, but Cape Fear Precast in Jacksonville, N.C., is probably the only company that can trace a part of its history to a poker game.
Jerome Coker and Tom Krakauskas, owners of Cape Fear Precast, worked together previously at a precast plant for many years – Coker in engineering and Krakauskas in sales. During that time, they saw there were only a small number of precast manufacturers on the eastern coast of North Carolina and talked about establishing their own company in that underserved area with a focus on efficiency, quality and customer service. While playing poker one night, a few contractors encouraged them to take the idea seriously. So the two began to plan in earnest. In less than two years, they secured financing, a building and some used equipment and started production in Southport, N.C.
Into the deep end
A little good fortune led Coker and Krakauskas to an empty, 20,000-square-foot building with overhead cranes that became Cape Fear Precast’s first home. Soon after, they hired their first two employees and were pouring with concrete from ready-mix trucks. The goal was to be a comprehensive underground utility structure provider right out of the gate.
“We knew that if we were going to have presence in the market we needed to be able to produce a complete product line,” Coker said. “That was our biggest challenge right off the bat.”
“You have to compete,” Krakauskas added. “People weren’t going to buy a manhole from us and a storm drain from the other guy. We were really hungry getting started – it was either sink or swim.”
Coker said competitive pressure pushed them not only into developing a diverse line of products but also into manufacturing large and complex projects early on. In the first year of production, Cape Fear Precast manufactured a 70,000-pound oil-water separator and major structures for Raleigh–Durham International Airport. The work included several storm structures set over 84-inch diameter pipe that was buried 40 feet under a runway extension.
“The contractor still contacts us because we did such a good job on that,” Krakauskas said. “If they had realized how young we were , I don’t know if they would have given us the job but it was a groundbreaker for us.”
Both Coker and Krakauskas laugh now, but taking on jobs like those – and doing them well – set a very serious tone from the beginning for the company and its capabilities.
Owning the product
It doesn’t take long to understand how much Coker and Krakauskas care about the business. The two don’t just lead the company, they take ownership of every job and every product. Calls go to one of them unless both are already helping customers, in which case Jerome’s wife Marie takes the call. “Hang on one second,” was a common statement throughout the day as they stepped away to take calls from customers that sounded more like conversations with old friends than business calls. Relationships with coworkers and customers is almost familial. And for Coker and Marie, as well as Krakauskas and his wife Betsy, it is. Betsy handles all accounting duties other than tax returns. Working with family works out perfectly for the company.
“Our business interests and goals are the same and we are able to share in both the challenges and rewards of running a business,” Coker said.
“Family is important to us, and I think having our boys here some days, seeing mom and dad working together and how we interact away from home is an important life lesson,” Marie added. “They better enjoy being young while they can because dad would have them pouring concrete today if they could.”
Because they care so much, Coker and Krakauskas expect the same from their employees. Both have worked in the plant and Coker is currently plant manager since, as Krakauskas explains, nobody has “taken ownership of it yet.”
“We’ve got great guys, we really do,” Coker said. “It’s always been important to me to tell them ‘I did this before you did it and it means a lot to me to give you this job so I expect you to take care of it.’ They know that we’re serious about it and they know that we appreciate them.
“I think our commitment to quality shows our employees that we’re driving to do things right, that we take it to heart, and when you show that they’re going to mimic it.”
Almost every employee is cross-trained and the owners look for people with a diverse range of skills. Above all, they look for employees who are trainable and willing to work hard and learn. Employees do everything from manufacturing custom forms and tooling to truck and equipment maintenance. For example, Coker and two employees quickly addressed a batch plant issue. “It was just build up on a sensor,” Coker explained after climbing down from the batch plant. A dirty sensor had kept the computer from recognizing the door to the mixer was closed. It’s just one example of how the company handles unexpected problems efficiently. Later in the day, employees also repaired a split coolant hose on a delivery truck and put it back into service less than an hour later.
“You’ve got to be your own island,” Coker said. “We realized early on that if we’re going to do this, we’re going to have to figure out ways to do everything ourselves.”
Making the right moves
As Cape Fear Precast grew, so did the economy, the housing industry and just about everything else … until 2008. The ideal situation in Southport deteriorated quickly, but Coker and Krakauskas already anticipated a move. Today, the business is in Jacksonville, N.C., and sits in the middle of a hotbed of military bases with highway access to Virginia, South Carolina and the Raleigh-Durham area.
The company provides products to Fort Bragg, Camp Lejeune, New River Air Station, Marine Corps Air Station Cherry Point and Seymour-Johnson Air Force Base. These bases have been important, especially as they ramped up spending during the recession as other bases were consolidated to the area. Cape Fear Precast has provided everything from standard water and sewer products to custom products for firing ranges and grenade pits.
“It’s been fun – we’ve done a lot of different structures and designs,” Krakauskas said.
“It’s not steady work, but when they build new ranges it’s a large volume,” Coker added. “They’ll need hundreds of different items and they’ll need them all at one time.”
Among the biggest military contracts was a project for Camp Lejeune’s MV-22 Osprey. The job required, among other products, 1,000 lineal feet of 8-foot-by-8-foot, aircraft-rated box culvert in 30 days. The company also worked on an MV-22 hangar project that included storm sewer and rainwater harvesting products, pump stations, oil-water separators and underground vaults to store firefighting foam.
One key to landing military projects, as well as other jobs that make up about 30% of all business, has been arrangements made with water supply distributors. Coker and Krakauskas found that general contractors from out of state were not familiar with Cape Fear Precast. By aligning with national water supply distributors, they have a foot in the door.
The physical move to Jacksonville was accompanied by building a new plant, which they describe as the most important business move to date. Although the old building had been a lucky find, it was not hard for them to leave the cramped four acres of land or the aging cranes. They designed the new plant to meet existing needs and accommodate future ones. Walls are moveable, craneways are expandable in three different directions and there’s a pit for dry-cast should the market arise. Coker and Krakauskas also purchased a batch plant from ERMC with central aggregate dispensing and two independent mixers.
“The batch plant stores a lot of data for us and helps us with our NPCA Certification,” Coker said. “We can also shut one mixer down and still run the plant or we’ll run both mixers simultaneously if we’ve got a big pour day.”
Quality by association
Manufacturing the highest quality products has always been a priority at Cape Fear Precast. Over the years, advancements such as perfecting a self-consolidating concrete mix design and finding the right quality control manager have helped. NPCA Plant Certification was not a priority early on, but when the North Carolina Department of Transportation made it a requirement the company joined the association and got certified.
“We weren’t interested in joining the NPCA at all,” Krakauskas said. “In retrospect, we should have done it a long time before. It’s kind of like an OSHA inspection – you never want it to happen but when it does you finally say, ‘Well, you know what, we should have done that a long time ago.’”
In addition, the plant’s QC manager, Matt Hoyman, is taking courses in NPCA’s Precast University and working toward earning the Master Precaster designation.
“He’s taking every opportunity that NPCA provides him to continue his education and he applies that in the plant and does really well with it,” Coker said. “We talk a lot and after webinars he’ll have ideas that we’ll try. I’ve been surprised at the level of education NPCA offers.”
The company’s latest endeavor is a paperless QC system by International Coding Technologies that streamlines product tracking and eliminates paperwork. The company uses tablets and barcodes to track products from manufacturing to delivery. The next step is to tie each delivery to Google Earth and add photos of each stage of production.
In recent years, the company has focused on increasing volume for its go-to products. Customized underground utility structures continue to make up the majority of the work.
“Panel forms allow us to do so many different diverse products,” Coker said. “Having this tooling, in conjunction with all of our other molds, allows us to form and build just about anything you can imagine.”
“I think that’s going to be key to our growth, doing more of what we’re good at and trying to capture more of the market,” Krakauskas added. “I think we’re about halfway to where we need to be.”
The company also continues to push the envelope with large and complex products such as a zigzagging weir structure or a 40-foot-deep pump station next to a river. For the latter, each section weighed more than 40,000 pounds and required beams on the interior due to hydrostatic pressures. The final assembly weighed more than 400,000 pounds. The contractor asked for embedded pipe flanges to bolt the pipes to the structure due to the immense head pressure. The contractor sealed joints with a double-butyl sealant and a liberal application of an external butyl sealant wrap. On another project, an 84,000-pound junction box, the company’s challenges included keeping form panels from blowing out, wood from shifting, pouring 20 yards of concrete while avoiding cold joints and picking such a heavy product.
“We used an 8,000-psi mix design with 850 pounds of cementitious material per yard and a complement of specialized admixtures for that product,” Coker said. “There’s not much we’re scared to take on. We’ll precast just about anything.”
Pride of ownership
The business has been trying, challenging and “a lot of hard work” for Coker and Krakauskas, but what keeps it fun is seeing the growth and the opportunity to do new products and expand their market.
“I’ve really enjoyed this business and it’s something you can be proud of,” Krakauskas said. “I see our product up and down the roadway and that really makes a guy feel good. I got two phone calls one morning and both of them were just to say thank you – talk about making your heart swell.”
“We’ve really built personal relationships with all of our contractors,” Coker added.
Nearly 15 years into their business venture together, Coker and Krakauskas can reflect a little bit on the risks and rewards. They knew a good hand when they saw it and bet big but had to let the chips fall where they may. With hard work and dedication, they fell in the right direction.
Kirk Stelsel is NPCA’s director of Communication and Marketing.