„We are above the expectations of the industry“
My first year as Managing Director has been extremely exciting, unlike anything I’ve experienced in my professional career. While demanding and challenging, I’m privileged to work with a group of people committed to taking EMKA USA to another level. I’m fortunate to have a good support system both domestically along with our team in Germany. Navigating through COVID, employment shortages and inflation can be difficult. Even though we saw record results, I would characterize my first year as a springboard used to elevate us moving forward.
While EMKA USA is one of the largest subsidiaries in the Group, we operate with a lean structure employing 40 people. Like other companies, the pandemic forced us to look differently and grow in areas where we were productive and reevaluate and act accordingly in areas we needed to improve upon. Currently the quality and commitment from each of the employees we currently have is something to be admired.
Structurally we are a traditional company in the sense we have sales, finance, engineering, purchasing, and production departments. I would define us as a sales and customer service focused company leveraging local production capabilities to capture more business. We have an assembly group which has modification capability, a vulcanization area for added service in the rubber sector, and a round rod production area which gives us flexibility in this product sector. It is our plan to add to our salesforce in the Pacific Northwest and Great Lakes regions in 2022.
Obviously as a for profit business meeting our goals on the top and bottom line is the paramount milestone achieved. We achieved our primary milestone by accomplishing other important milestones. We’ve grown sales above the market expectation, captured a significant amount of market share and customers from competition, advanced our presence into new markets, expanded our UL capabilities, leveraged our breadth of line and the ability to sell a solution as opposed to an individual product.
EMKA USA possesses a diverse customer base, ranging from our traditional core of Enclosure and Sheet Metal fabrication customers, extending into the Rail, Telecomm, Machine Manufacturing, HVAC, and Energy sectors. Advancement of sales in Channel/Distribution additionally has been critical to our growth.
As for product range, having supply along with the ability to modify quarter turns in certain instances to helped us capture some additional project business. Another popular product this year is our swing handle. For the most part these products have been supplied to the telecommunications industry with upgrades to the 5G market. Assemblies up around 20 % is a show of service and solution selling to our customers which carries across all of the industries that we sell into.
While overall market conditions in the USA/Canada are positive, I would say currently we are performing above industry expectations. While inflation and supply issues have affected some of our customers we are seeing positives in current market conditions as well. Domestic manufacturers are forced to become more self-sufficient and look for additional options they have not considered in the past; which opens the door for us. Our ability to service to these customers during these trying times has allowed us to gain market share from our competition. We are hopeful with a passage of an infrastructure bill will help grow the market. This would see advancement in rail, transportation, construction equipment, alternative energy and, utilities markets. Expectations for the quarter and most likely half of the year are expected to remain strong.
While having a global presence provides a major advantage when selling to large customers, there are adaptations needed to accommodate domestic markets. Local regulation requirements such as UL Recognition is one such adaptation. In 2021 we committed to expand our UL offering which has been invaluable to obtaining new business. We feel this will also be helpful for markets that are supplying products to the USA as well. While we’ve done a good job of securing raw materials, and working to shorten lead times.
While there are several I can point to, projects where we were able to provide a system or innovative solution as opposed to receiving commodity order are most exciting to me. One such project is a custom Quarter Turn we are providing for ABB in Mebane North Carolina. Under pressure this quarter turn utilizes a spring with a custom cam to release energy built up in the cabinet to avoid a catastrophic failure. The design itself took more than a year, with ongoing communication between the local EMKA and ABB Engineering groups. The initial goal was to introduce this into a new product offering, which launched last year. Currently this product is quite successful. Our ability to help in the design, partner with customer for the necessary tooling, and supply a significant amount of product in a timely manner both in the testing and production phase was key to capturing this business.
A successful transition with our newly installed ERP software (ODOO) is very important. For us it was time for a change as it relates to software and technology and this new technology will help us to be more efficient and productive. Also the expansion of our Channel and distribution will be very important for us. In Case of long term goals we plan to expand our production capabilities: domestically automation of our round rod facility will increase productivity by 20 %. Purchase and install a flat rod machine which is a product that will open up another market for us and add to our ability to sell solutions to the customer.