Fenceworks finds room to grow in the Capital City
Published: August 16,2004
Jackson — It’s seems that the entire staff and management at Hal & Mal’s Restaurant in downtown Jackson knows Patrick Pigott and Steve Strickland, president and vice president-finance and sales, respectively, of Fenceworks Inc. After all, both men have been faithful patrons of the eatery for years. And it looks as if they will remain so as Fenceworks has begun its move into its new facility on Farish Street in the Capital City.
“I love this area,” Pigott said. “Jason Brookins (executive director of the Hinds County Economic Development District), the city — everyone — has been extremely helpful in getting us in the Farish Street facility. We’re thrilled to be here.”
Pigott was all smiles as he talked about Fenceworks over a Hal & Mal’s lunch plate. A native of Jackson, he is a draftsman by trade, but left that field to dabble in computer manufacturing before founding Ironwork Unlimited Inc. in Jackson in 1981. The company served the architectural metal industry in the greater metro Jackson area for the next decade.
High quality, attractive prices
Over the course of that time, Pigott saw that the price of fencing was driven mainly by two processes — manufacturing and installation. He saw that if the turnaround time in those two areas was cut, a higher quality fence could be offered at attractive prices to fence contractors.
In 1992, Pigott began creating an automated fence production process for a modular, ornamental steel fence system he dubbed Clinchfence. The Clinchfence name is derived from its unique fastening system. There are no exposed bolts or fasteners — the panels snap into place using sleeves that conceal the stainless steel fastener. The panels are then secured by “clinching” the sleeves.
According to Pigott, Clinchfence, which contains four separate patents, is more durable and stable, and is as attractive, as traditional fencing. The company’s three-step powder coating process is also superior to other fence manufacturers. Yet, the product is less labor-intensive to build and install, allowing for competitive pricing. Fence contractors can pass that savings on to the customer, or pad their historically thin profit margins.
Clinchfence found residential, commercial and industrial customers. From its original plant on South Street, Fenceworks has seen its product go up at Mississippi College, Mississippi Sports Medicine and Orthopaedic Clinic and the University of Alabama, to name a few. The company has found a wealth of buyers among fence contractors working on government-subsidized housing. And Clinchfence has also made it into Home Depot.
Pigott, however, had larger visions for Fenceworks, which was established to manufacture Clinchfence (Ironworks is now dormant). While contractors and others were excited by Clinchfence, there was one group that proved impossible to win over — bankers. The South Street facility had some logistical drawbacks. And the company needed new machines in order to build to expand it Clinchfence product. All this required funding Pigott did not have, and one bank after another turned him down.
“They viewed me as a start-up,” Pigott said. “I tried to convince them that Fenceworks was not a new business, just a new direction. Fenceworks was a new name, but I had been in the business for years. It was frustrating.”
The frustration would end one day at Hal & Mal’s. Pigott had become acquainted with Strickland over the years at the eatery. A native of Vicksburg, Strickland had been a financial consultant for over a decade. He had a vague idea what Fenceworks was doing, but became intrigued when Pigott opened up and told him what his vision for the company was and how a lack of capital was hindering his future plans. Strickland asked to see the product.
“I was immediately struck by it and its potential,” Strickland said. “I was looking for something else to do, something that was more tangible than what I was doing. And I had always been drawn to entrepreneurs. So, I decided to come on board.”
Strickland’s arrival soon paid off. He drew up a plan involving convertible bonds. Half of the bonds will be called in four years, when 50% of the bondholder’s investment is paid at twice par value. Thus, the bondholders have recouped their investment and still have half of their bonds’ value remaining. At call, the remaining bonds can be cashed in or converted to Fencework stock.
In addition to an infusion of capital, Fenceworks benefits from the convertible bonds by not taking on huge capital gains. And, if investors choose to convert their bonds to stock, Fenceworks can retire its debt painlessly.
With this capital, Fenceworks was able to purchase the former Cabell Electric Supply Building on Farish Street. A total capital investment of $1 million, the 18,000-square-foot is currently being readied for production that is expected to begin by the end of the year. Fenceworks has hired 10 additional employees, and the facility is better located for ease in shipping and receiving. And it allows room for more equipment, which will in turn allow an expanded product offering from Fenceworks.
Another plus is Pigott’s and Strickland’s third partner, Davis Warren. A vice president, his forte is operations, and both Pigott and Strickland sang praises about his analytical mind. They both called him “the problem solver.”
Warren and the new facility will soon come in handy as Fenceworks has struck its first international deal. The Australian firm Gryffin, Ltd., Fence Company, and Fenceworks have struck a distributorship deal. Gryffin’s high-security fencing will be manufactured partly in Australia and partly in Jackson, with Fenceworks also serving as its U.S. distributor.
The agreement, which is still being looked over by lawyers, calls for Fenceworks initially to receive the Gryffin product 50% assembled. Using components shipped from Australia, Fenceworks will complete the product. The company is going to see how the Gryffin product sells in the U.S. If all goes as expected, Fenceworks hopes to move from a distributor to license holder.
In the meantime, Fenceworks should have plenty to do meeting the orders for Clinchfence. A professor at the University of Southern Mississippi has given Fenceworks a going over, and, according to Strickland, projected Fenceworks’ potential market share at 10%. The industry was a $1.6-billion one then, but it is growing at nearly 10% per year.
Fenceworks also has a new product on the drawing board. Called a rackable system, it would allow for easier and more attractive installation of Clinchfence on uneven terrain. Other concepts await trial.
“My expectations have been more than exceeded,” Pigott said. “We’re well ahead of our prospectus.”
Contact MBJ staff writer Wally Northway at email@example.com.
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