Sterling

Texas Gov. Greg Abbott signs the first TerraLam mat produced by Sterling at its new Lufkin facility in October 2019.

After a generation of setbacks, knockdowns and butt-whoopin’s, leaders in the city of Lufkin recognized the necessity of diversifying the job market to maintain the local economy.

Little did those leaders know, their plans would be tested come 2020.

The number of jobless in Lufkin and Angelina County rose significantly in the month of September, the Friday report by the Texas Workforce Commission shows. Despite the devastating impacts of COVID-19 on the national economy, manufacturing plants brought into Lufkin with taxpayer-funded incentives have remained relatively unscathed, according to Lufkin Economic Development director Bob Samford.

In a little over two years, the Lufkin Economic Development Corporation brought in hundreds of jobs spread over several companies with a reputation for resiliency. And data by the TWC shows this tactic has proven its merit.

Lufkin’s unemployment rate rose to 8.8% in September from 7% in August. There were just over 250 new claims in that time frame.

Angelina County’s unemployment rose to 8.6% in September from 7% in August. There were more than 500 new claims made in that time frame.

The top five industries causing unemployment insurance claims in Angelina County were limited-service restaurants, poultry processing, full-service restaurants, warehouse clubs and supercenters, and home health care services.

“I feel like the time is right for Lufkin to grow,” Samford said.

He pointed to city properties available for development, the foreign-trade zone and the strong, relatively underutilized workforce that continues to show promise for companies looking at the city. He hopes to have a new company locked in on expanding to Lufkin in the fourth quarter, but issued no guarantees.

Samford believes a majority of the businesses who have dealt with the city will survive the pandemic and continue operating just fine, he said.

“The sawmill is doing great, setting production records and meeting all of their hiring requirements,” he said. “Echem is in the middle of a gigantic rebuild that’s going fabulous. Twin Disc has moved into their building and are purchasing equipment. My anticipation is that we’ll see further expansion out of that company in the future.”

Samford also said Lockheed Martin is doing well with more expansions and Samford would love to see them build a campus in Lufkin — although that has by no means been confirmed. A campus would include new headquarters, buildings, facilities for expansion, and the ability for Lufkin to compete against sister plants to produce more parts, he said.

“COVID-19 did not, overall, have a direct impact on our businesses that we have given grants to,” Samford said. “We have been very lucky about maybe being selective and trying to get the right companies in Lufkin.”

Two businesses, Angelina Manufacturing LLC and Sterling, which are tied to the oil and gas industry, are the only two which Samford said were impacted negatively. Their struggles mounted when oil and gas prices dropped as more and more people obeyed “stay at home” orders during the pandemic’s first wave. Leaders in both companies admitted to layoffs to preserve operations, but said they were minimal.

“That was unexpected and unanticipated by us, and it plays a big factor,” Carter Sterling, CEO of Sterling, said. “That business dropped significantly for us and our (Lufkin) plant is not running as a result.

“It’s not rocket science here,” Karen Flores, financial controller for Angelina Manufacturing LLC, said. “With a drop in demand for oil … there’s a drop in the need for tanks to put oil in.”

Even with Sterling’s layoffs, they met the city’s hiring requirements to receive grant funding, Samford said.

Angelina Manufacturing did request an extension on their contract for hiring, but is working hard to preserve the jobs they have, Flores said.

Despite the economic downturn, neither company is untested in the fluctuations of the oil and gas market and are confident in their abilities to recover.

“We started in 2011. … We did well for a while then we took a dive in 2015 when oil prices dropped,” Flores said. “Then we did well again after that as gas prices went back up. We got into a good financial position, then COVID-19 came.”

While this year isn’t their best, Flores believes the company will continue to operate because of their reliable and strong customers. Her plan is to tighten the ship, stand up as best they can and keep the staff they have until the market truly picks up again.

“I think it will be the latter part of 2021 from what I’m reading and hearing,” she said.

Sterling was founded in 1949 and as a family, the Sterlings have brought their company through seven pandemics — eight including the coronavirus — and six oil price slumps — seven including 2020, Sterling said.

“We’re resilient and this is where the real entrepreneurialism of a company gets to kick in,” he said. “It boils down to each and every person. Where we’re really impressed is with the people we hired in Lufkin. They displayed an amazing aptitude for entrepreneurship and innovation.”

Sterling had two examples of this. The first, team members throughout the company reached out to new clients and increased their overall client base. The second, because of the company’s strategic placement in Lufkin, there was no broken supply chain, which is what has caused serious heartache in other companies — Sterling pointed to the toilet paper industry in this case.

“Our manufacturing plant gives us a newfound competitive advantage thanks to the adversity of 2020,” he said. “And with our supply chain, customers can be confident that they will get from us what we’re promising.”

Because of this innovation, Sterling believes the fourth quarter will be the company’s best of 2020 and that will provide them the momentum they need heading into 2021 so they can pick up where they left off in 2019, he said.

He also emphasized that this year has proven to him that choosing Lufkin was the right choice. The city reached out multiple times to see if he needed assistance, which he was thrilled to hear but even more excited to turn down.

He doesn’t know when the market will rebound but has faith they will get the plant back in action in the next year.

“I’m very optimistic for a strong rebound,” he said. “I’m looking forward to putting this bizarre year behind us.”

Jess Huff's email address is jess.huff@lufkindailynews.com.