Cambria, known for its luxury countertops, expands again

Cambria's $130 million quartz-countertop factory expansion roared to life this month — and with it, the family-owned company now has 1 million square feet of operations an hour south of Minneapolis in Le Sueur.

The plant addition, the third in 15 years, offers a sixth production line and 50 new jobs. Already, Cambria has added 130 jobs this year and now employs 1,900 workers nationwide.

But the Minnesota project almost didn't happen.

In 2018, a trade battle with China hobbled the plans. Then as Cambria was ready to move forward in 2020, COVID-19 hit. Even now, expansion has its risks because the company has new competition in the U.S. that did not exist before the pandemic.

CEO Marty Davis in 2018 put a halt to any expansion by Cambria and filed a complaint with the U.S. Department of Commerce and International Trade Commission (ITC) that China was illegally dumping $1.2 billion worth of underpriced quartz into the U.S. market.

"They were not only dumping but copying our patents, so our sales got flattened," Davis said.

The U.S. investigated, ruled in Cambria's favor, and in 2019 and 2020 implemented trade tariffs up to 500% on quartz imports from China.

Five ITC commissioners issued an "affirmative determination" that giant government subsidies by China and others priced quartz imports so far below cost, that it "materially injured" U.S. quartz manufacturers like Cambria.

"We wouldn't have been building this plant if they had not straightened this out," he said.

With tariffs in place and the rash of imports finally slowing, Davis returned his attention to a growth plan in early 2020 — and the pandemic hit.

Construction plans halted again.

As COVID-19 spread across the country, Cambria furloughed about 60% of its employees, including many of the 750 workers in Le Sueur and Belle Plaine. Cambria's 30 distribution centers and showrooms shut for three months as Americans hunkered in their homes to avoid infection.

By 2021, the pandemic homebound turned to home improvement projects in droves. By 2021, Cambria was fully reopened and sales surged.

"Our business dropped in 2020, but grew in 2021 and 2022. There is no doubt that people looked inward to invest in their homes and cabins," Davis said.

Cambria started 23 years ago when the Davis family bought equipment from a bankrupt company that cut quartz into slabs and started importing some products from Italy.

That new direction for the family was perceived as risky. The Davises were known for supplying cheese and whey products to Kraft under their Davisco firm. Quartz was a very different business.

Davis, a University of Minnesota graduate, ran the Cambria quartz company while his brothers, Matt, Mitch and Jon, tended other parts of the family business, which for a spell included Sun Country Airlines. (They sold the airline in 2017).

After ups and downs, Cambria's quartz-slab sales grew. Today, sales have increased 20% from four years ago and estimated to hit $650 million this year.

But fresh competition and trade issues are emerging.

Last year, U.S. Customs found Chinese firms again importing underpriced quartz materials into the United States, this time through Malaysia and mislabeled "crushed glass."

Separately, new competitors from Brazil, Israel, Spain, Korea and elsewhere are building $800 million worth of new quartz-slab factories in the United States, a turf long dominated by Cambria.

At the same time, U.S. inflation is soaring at rates not seen in 40 years, forcing up interest rates and making homeowners think twice about taking on debt to redo kitchens and bathrooms.

The expansion in Le Sueur means Cambria took on debt, which it must start to repay. It needs 50 more workers now to run the new plant plus 100 more long term. Those hiring needs collide with one of worst labor shortages in U.S. history.

"Do we have some trouble [with labor shortages]? Sure," Davis said. "The biggest challenge is getting the high-level expertise in the finance areas and the legal areas and the HR areas. That is where the problem is. It's at the senior level. ... It's hard but we just hustle."

Josh Howard, a Twin Cities macroeconomist who studies labor market dynamics for the financial sector, said midsized manufacturers like Cambria are facing "a unique and challenging time."

"Inflation is a big deal. Higher interest rates and wage growth are going to be around for a while," Howard said. "And Minnesota's unemployment rate is just 2 percent. That's the lowest level in the country. There just aren't that many bodies around" to fill the growth dreams of employers like Cambria, which hope to stay turbocharged for years to come.

All of this makes it "incredibly hard to plan for if you are a manufacturer," he said.

Along with the tight labor market, manufacturers relying on the housing sector for sales "are the most nervous right now," Howard said. "Recession is the big concern."

Some are preparing for any possible downturn by slashing expenses or slimming fixed costs by converting variable loans into fixed-rated loans to protect future cash flow, he said.

Davis said he is not put off by the current challenges.

A recent visit found Davis, operations manager Brian Scoggin and R&D head Jon Grzeskowiak darting past 1,000-pound bags of crushed quartz, gleaming hoppers and mixing vats, giant conveyers, rumbling presses, towering ovens and slab-toting robots.

Nearby, workers calibrated machines and tested "cookie dough" batches of quartz mixes headed into the new ovens.

As long as Cambria's troubles involve "free and fair trade," the company should prevail, even if the U.S. economy really slows, Davis said.

"Even during recessions, people still renovate their homes," he said.

Cambria should also benefit from the "shortage of housing" that is still driving construction. "In general there is growth in demand for new and expanded homes," Davis said.

Le Sueur Mayor Shawn Kirby isn't about to second-guess Cambria's strategy.

"It's a tough balancing act, but they are a very resourceful company," Kirby said. "I think they will work their way through these challenges. Over the last 20 years that business has just really taken off with more production and more employees, which is exciting" for Le Sueur, which only has 4,200 residents.

Davis, Scoggin and Grzeskowiak pointed toward the future.

Last year, Cambria bought a third quartz mine in Canada, assuring a steady flow of high-quality quartz.

In 2019, Cambria signed its first deal with Home Depot — and is now making 20 specially designed, private-label quartz countertops for the chain. Those designs are on top of the 250 Cambria makes for the high-end kitchen and bath market.

More countertop designs with different textures and veining are coming.

This month, the company test launched its first "super jumbo" quartz slab, which spans 76 square feet. Fabricators can cut one of them to make three countertops, Davis said.

Even with economic uncertainty, "I'm an optimist" that Cambria is on the right track, Davis said. "How could I not be an optimist? I started a quartz countertop company from scratch."