The Shapiros, who own Rockville-based Shapiro & Duncan (there is no Duncan, but more on that later), bought a former Giant food warehouse in suburban Washington that year and turned it into a state-of-the-art prefabricating pipe plant.
The prefabrication plant may sound boring, but it is a vivid example of how companies such as Shapiro & Duncan make big financial bets on technology.
When it works, such capital investment propels companies to greater profitability.
It has worked for Shapiro & Duncan, which installs pipes that cool and heat buildings, carry electricity and provide running water and sewage removal.
The plant, which the brothers borrowed money to pay for, enabled Shapiro & Duncan to install pipes in office buildings far more efficiently.
That single calculation changed their whole business, allowing them to work with big players such as Clark Construction, which builds, well, just about everything in Washington.
The company, known technically as a mechanical contractor, employs 350 full-timers and expects to gross nearly $100 million this year, which is 25 times the amount a decade ago. It’s working for Clark on its biggest job ever: a $57 million project at Inova Fairfax Hospital.
Jerry Shapiro, 53, said his company earns single-digit profit margins.
I am a sucker for factory tours, so I jumped on the Metro and headed to Landover for a look at the sprawling prefabrication plant.
Shapiro & Duncan’s pipe plant runs 16 hours a day, employing 30 workers and welders during the day and eight at night. The goal is to eventually have enough work to keep the plant running round the clock.
The plant allows the firm to use fewer workers on its jobs, lowering the cost for installing pipes and making Shapiro & Duncan’s bids more competitive. It also allows welders the comfort and safety of doing more of their work in the factory instead of climbing a ladder at a construction site to weld a pipe while looking upside down. The plant doubles the efficiency on weld inches.
“It’s easier to do the welding here than have a welder crammed in a space, looking upward, trying to hang and weld pipes,” said Mark Drury, vice president for business development.
Thirty or so feet above the concrete floor, three cranes attached to the ceiling grab giant pieces of steel pipe and transport them to another part of the building. A $300,000 machine, shipped from Oceanside, Calif., uses plasma to cut steel pipes in a quarter of the time it takes to cut on the job site. The machines are programmed by computer to cut the pipes to exact specifications, reducing waste.
Twenty-foot sections of copper pipes are bundled together in cellophane, waiting to be put on a flatbed truck. The pipes being fabricated now will eventually carry water in a Howard University dormitory.