HAMMONTON — Integrity Medical Devices has spent 22 years making gauze bandages, a niche business that has grown from four people at the start to 110 employees now.
And although Integrity’s factory is just a few blocks from downtown, the business has such a low profile that even many people in its hometown don’t know it exists, says plant manager Hector Rodriguez.
But that didn’t stop Wal-Mart from finding one of Integrity’s flagship products, a nonstick bandage the retail giant plans to start selling next year in 300 stores, as part of a 2013 Wal-Mart pledge to buy $250 billion worth of U.S.-made products over 10 years.
Still, critics have questioned that commitment. The nonprofit Truth in Advertising called Wal-Mart’s website “a Made in the USA labeling mess,” saying it found more than 100 misuses of that claim on the site early this year.
But back in Hammonton, Rodriguez says Integrity’s low-key approach didn’t stop the little company from pursuing Wal-Mart and gradually convincing the international player it wants to sell these bandages from a little-but-growing company.
He’s the stepson of co-founder George Hughes, who started Integrity with partner Carlton Kimber Sr., or Buck. Both worked almost 10 years for another company that made similar products in their headquarters, an ex-clothing factory whose owners sold it and moved to Texas.
“We knew all the buyers and sellers of this product, and I said, ‘If we get a good break, we could make our own products, because we know how to do it,’” Hughes recalled Wednesday.
They started out in a small building a few miles away and took risks look-ing for that big break.
“They decided to cash in their 401ks, and they maxed out their credit cards,” Rodriguez said. (At one point, Hughes had piled up $64,000 in borrowing on his own cards, he confirmed.)
The business worked, though, and after a few years, Integrity outgrew its starter factory and moved back to the building where both founders had worked. Now, Integrity is looking to grow further, and one major route runs through Wal-Mart.
“I sent them an email to see if they were interested in us,” said Rodgriguez. “The first time out, they denied me. But then we got an open call to come down to Arkansas.”
“We went down and pitched our stuff to the sales manager, and he liked what we had and gave us a shot,” Rodriguez continued.
He’d done some specialized market research on his own, personally taking his Integrity-made bandages to the pharmacies at a handful of South Jersey Wal-Marts.
“I asked if they’d be interested in having them in their stores, and they said, ‘Absolutely.’ They had to send customers to their competitors, because they don’t carry it,” Rodriguez said. “That was one of our selling points” when he visited Wal-Mart’s headquarters with Carlton “Chip” Kimber, the son of the other co-founder.
Cindi Marsiglio, Wal-Mart’s vice president for U.S. manufacturing, knows skeptics have questioned Wal-Mart’s commitment to American manufacturing. But Marsiglio said the move to spend $250 billion on U.S.-made goods makes financial sense in several ways.
“We know there are business advantages to a shorter supply chain,” she said by phone Wed-nesday, before citing estimates that Wal-Mart’s commitment could lead to a million new U.S. jobs.
“It’s a job-creator in communities where Wal-Mart has stores and clubs,” Marsiglio continued, and then added a detail from the company’s own extensive market research.
“Second to price, where products are made is (the biggest factor) influencing purchasing decisions,” she said.
Wal-Mart is also willing and able to deal with small suppliers, as Marsiglio said the deal with Integrity demonstrates.
“Most companies are smaller in nature and not necessarily ready to provide products for our entire chain of 4,600 Wal-Marts” just in the U.S., she said.
At Integrity’s Hammon-ton plant, Rodriguez knows the initial deal is for 300 stores. But he says the company has bigger plans for Wal-Mart, and for itself.
“We’re hoping to increase our employees by another 25 or 30 people,” he added, due only in part to this Wal-Mart deal.
“We see a long term with them,” Rodriguez said, “but we have other customers and other bus-inesses coming up, too.”