July 26, 2016 Helping Hands, Winning Business

Volume 7 | Issue 2

Southeastern Kentucky Rehabilitation Industries is projecting $55 million in sales of military apparel next year.

Southeastern Kentucky Rehabilitation Industries (SEKRI) is a nonprofit organization. Its mission is to provide qualified personnel, facilities and related services for people with disabilities, enabling them to obtain and maintain competitive employment. That mission statement describes a socially aware organization that exists to train and employ a specific segment of the population. But SEKRI is more than that to the people who work in its facilities, the government departments that purchase its products and the troops who ultimately rely on the quality of those products.

Starting with the bottom line, SEKRI is forecasting $55 million in sales next year of its products: hats, cold-weather caps, suits that protect against biochemical agents and all-weather apparel systems tested to protect against temperatures below 40° F. Then, there are SEKRI’s five facilities, all equipped with the technology to manufacture apparel that meets the specifications of the U.S. Department of Defense. Finally, it’s the projected prosperity of the 32-year-old organization, which began as a workplace for disabled persons and school dropouts and found its success in the increased skill levels and ongoing loyalty of those workers.

Thomas Fields, executive director, describes SEKRI’s success in winning new contracts. “Between mid August and September of this year, SEKRI was awarded over $50 million in government contracts, which is unusual at the end of the year,” he says. “We are unique because we have proven ourselves over the past few years. We have created multiple plants and cross-trained our labor force, and the government recognizes that.”

• An overview of SEKRI’s four locations shows its diverse operations:
  Corbin, Ken. – The headquarters site has approximately180 employees, most of whom are involved in making cold-weather battle dress uniforms and hats for all branches of the armed forces. SEKRI is the military’s sole supplier for the hats (called covers) and makes about one million of them annually.
• Jellico, Tenn. – Situated on the Kentucky-Tennessee border, the 50,000-square-foot plant employs approximately 120 people. All the Boonie and Garrison caps worn by U.S. Marines are made here.
• Cumberland, Ken. – The two SEKRI plants established about three years ago make chemical suits that protect troops against weapons of biological destruction. Occupying a total of 70,000 square feet, operations employ about 250 people who make the apparel, which features Joint Service Light Integrated Suit Technology (JSLIST). Fields says, “This is the most sophisticated plant in the world for this manufacturing. We are the second largest producer in the world of the new JSLIST suit, which is really a life-support system, so there is no room for error.” The Cumberland location was recently upgraded with a computerized shop-floor control system for real-time management and analysis of plant operations.
• Barbourville, Ken. – The 40,000-square-foot facility was opened this year, employs 50 people and is projected to employ 150 by next year. Its first Department of Defense contract is for making 720,000 pairs of polypropylene cold-weather drawers annually. The long-term contract is worth $6 million.

Unique Product Focus
All SEKRI facilities are involved in making elements of a cold-weather apparel system developed with the U.S. Army Command Center in Nalick, Mass. The multilayered Special Operations Forces-Protective Combat Uniform (SOF-PCU) is made with wicking layers that feature Polartec(r) PowerDry(r) fabric, which rapidly pulls water away from the skin; R1-style gridded fleece in long-sleeve T-neck and pants for extra warmth; loft vest, jacket and pants constructed with EPIC by Nextec(r) fabric and loft insulation, which makes them water-resistant, windproof, breathable and washable. Army Rangers and Navy SEALs tested the SOF-PCU system at temperatures below 40° F.

Fields elaborates on SEKRI’s role in producing the high-tech apparel. “SEKRI makes nine of the 12 layers in this system. This is a wicking system, and that’s important because in a cold environment any moisture close to the body can lead to frostbite. This is the result of a combination of efforts to develop a very unique system- not heavy or bulky, so it keeps the user very mobile but protects. The design also takes into consideration that troops can be in a threatened situation, so there can be no noise from the fabric, nothing dangling to get snagged, and no rattling attachments to draw attention.”

The primary market for the cold-weather system is Department of Defense contracts, but SEKRI is pursuing secondary markets via the Internet. First are sales to individual military units that are not budgeted to receive the system but have access to unit credit accounts to make their own purchases. Second are sales to consumers who want the system for hunting, skiing, hiking and other cold-weather activities.

Discussing the strategy for reaching those markets, Fields says, “There is a worldwide market, including police forces, for these products. The challenge is to educate the consumer that this is a multilayered system, so you don’t just buy the jacket and expect it to work. The consumer market is one in which we’re content with moderate growth through the Web.”

A History of Service
The history of SEKRI illuminates its evolution from an organization founded in 1971 by Oscar Haulk in Corbin, Ken., to train people with disabilities. Kentucky’s Department of Vocational Rehabilitation (DVR) referred people to SEKRI to learn basic work skills. Initial projects were a downtown lunch service and a soup kitchen. Eventually SEKRI ran a furniture refinishing and reupholstering business at the 5,000-square-foot site.

SEKRI moved to a larger facility in 1984 and started creating jobs through the Javits-Wagner-O’Day (JWOD) program, which provides employment opportunities for people who are blind or have other severe disabilities. JWOD coordinates government purchases of products and services provided by nonprofit agencies that employ people with handicaps. National Industries for the Severely Handicapped (NISH), a nonprofit agency that provides technical assistance to Community Rehabilitation Programs (CRPs) for securing government contracts, helped SEKRI get started in the JWOD Program.

Fields says that NISH has remained SEKRI’s greatest ally in securing government contracts and that SEKRI is now 100 percent a Department of Defense supplier through JWOD. The disabled workers employed by SEKRI are referred by several programs, including Welfare to Work, Work Release, Workforce Investment Act and several state vocational programs. Terms of the government contracts stipulate that 75 percent of the new hires be disabled persons.

In the late 1980s, however, there was question as to whether SEKRI would remain viable. The solution to SEKRI’s financial problems came from block grants arranged by the Kentucky Highland Investment Corporation, a nonprofit capital venture organization that also recommended moving to a larger facility and expanding manufacturing capabilities.

In 1993, SEKRI relocated to a 30,000-square-foot facility in Corbin’s Tri-County Industrial Park. By 1996 SEKRI’s manufacturing operations for military apparel were bringing in about $1.8 million annually. Fields joined the organization that year, bringing his three decades of experience in the apparel industry to the operation. He gradually implemented a series of business and operational improvements.

Improved working conditions led to a higher rate of worker retention, which changed SEKRI’s focus from training individuals to employing them long term. SEKRI then initiated a program to employ more workers by aggressively seeking more government contracts and opening its new facilities in remote areas where handicapped people did not have access to transportation.

Fields views SEKRI’s future in terms of specific challenges. “We’re unique because our customer is the Department of Defense,” he notes. “Our challenge is to satisfy the needs of our customer at a time when it’s hard to predict the future. So, we have to continue to act cautiously and develop the commercial market.”

As to employment opportunities, he says, “We will continue to grow but not quite at the pace of the past few years. Right now we have tremendous demand for our service but we have to control growth. We have to protect the organization so it can be here to provide.”

Referring to SEKRI’s roots, Fields says, “Thousands have come through here. But now there’s no employee turnover. We have the best managers and staff. This has been the most difficult job of my career – but I wouldn’t change anything.”

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