Karen G. Mills gets a feel for the health of small businesses and the economy when she visits companies helped by the U.S. Small Business Administration, the agency she oversees.
She likes what she has heard from them lately.
"Small businesses two years ago were saying to us, 'Oh, I need a loan because I need to save my business,' " Mills said. "Now they're saying, 'I need a loan, I need capital, I need help because I'm growing. I have an opportunity to hire more people.' So we need to create these jobs."
The SBA administrator joined Rep. Brian Higgins, D-Buffalo, in touring EcoStar LLC in Holland on Thursday. The company, located in a former Fisher-Price plant about 30 miles southeast of Buffalo, is part of a group of businesses owned by the Staroba family that recycles rubber to make durable, imitation slate roofing tiles.
The visit was designed to draw attention to a small business involved in "clean energy" manufacturing supported by the SBA. In 2009, the agency provided a $2 million loan that helped Staroba Plastics reacquire EcoStar LLC, the sales and marketing arm for its roofing products. Staroba and its affiliated companies have about 85 employees.
Mills began serving as SBA administrator in 2009, bringing an extensive background in business to the job. It runs in her family: Her parents are top executives at Tootsie Roll Industries.
The SBA administrator took a lengthy tour of the plant with Higgins and Ed Staroba, the company's general manager. She mentioned to Staroba how the SBA could help the company step up its exporting, something in which he had expressed interest.
"When [President Obama] talks about how we are going to move forward, how we are going to win the future, it's really on the back of companies like this, which are innovating in a place like Buffalo," Mills said.
Franklin J. Sciortino, the SBA's district director in Buffalo, said the White House had requested ideas for green-themed small businesses assisted by the SBA that Mills could visit. The Starobas' business fit the criteria.
"This is one of the things that the president is trying to push -- to help businesses that are green or trying to go green," Sciortino said.
The EcoStar roof tiles are made from 80 percent postindustrial recycled rubber and plastics, including scrap from the production of diapers. The tiles themselves are recyclable at the end of their life span.
Before the housing slump hit a few years ago, about 70 percent of sales of the EcoStar tiles were for steep-slope residential homes. The remaining 30 percent were related to historic properties, colleges and government buildings. "That has flipped," said Charlie Taft, vice president of sales.
It was back in 2001 when the EcoStar sales and marketing duties had begun to feel beyond the Starobas' scope, so they sold that portion of the operations to Pennsylvania-based Carlisle SynTec.
"That's [Carlisle's] core business; they're very good at it," Staroba said. "They are the largest commercial roofing supplier in the country, and they had established networks and channels and advertising expertise, and deeper pockets."
The arrangement worked well, and the sale gave Staroba Plastics the financial resources to move from Lackawanna to its larger location in Holland. Rubber & Plastics News reported that the EcoStar unit generated $17 million in sales in 2009.
Recently, Carlisle had shifted its focus to making photovoltaic products, not just supplying "green" products. The Starobas worried their roof tiles would receive less attention. "To us, it's our life, but they're a $3 billion company, so this project [EcoStar] is a rounding number on their financial statement," Staroba said.
The Starobas worked with the SBA as well as the Erie County Industrial Development Agency, New York Business Development Corp. and Northwest Savings Bank on completing a deal.
"What we needed was help with the purchase price, as well as some short-term working capital," Staroba said.
Mills said she was pleased the SBA could play a role.
"This is where we step in with the SBA," Mills said. "If you are an innovative small company, you've got the ability to create jobs here, particularly in a place like Buffalo. You've got this operation. And all you need is the help to get the asset back and get it going."