Emhart Fastening Teknologies has had a spate of good news lately.
Ford Motor Co. put the company's automotive group in Chesterfield Township, Mich., in charge of all fasteners on the 2003 Ford Ranger. The automaker also is talking with Emhart, a unit of Black & Decker Corp., about possible programs in Europe. With annual revenue of $600 million, about half from automotive, the company has plans to surpass the 7 percent sales growth it posted in 1999.
Martin Schnurr, vice president of marketing and e-business, spoke to Staff Reporter Amy Wilson about Emhart's objectives.
Are there particular geographic or product requirements for which you would consider acquisitions?
We're always looking to fortify our product portfolio with acquisitions. A lot of what we've done in recent years has been internal growth. We just completed an acquisition in Brazil, but if you look at what's happened over the last two years: We built a new plant in the Czech Republic. We built a new plant in Japan. We built a new plant in Germany. We extended facilities in North America. We set up a new operation in China. That's an extensive amount of activity, just internally and with only one acquisition.
Geographically, where are you forecasting expansion?
We're focusing on areas where the greatest growth in automotive production will be. It's projected to be in the Far East and South America. So that's the reason why we've fortified our position in those areas, so we can participate in that growth.
What are product areas Emhart is planning to develop?
Look at the industry, look at the movement and where things are going. There's a strong movement toward aluminum usage in cars, and there's a strong movement in dissimilar materials and plastic composites. You'll see us move in those areas, and develop a stronger product presence based on where the industry takes us.
Would that expertise be developed internally?
It will come from a lot of places. If you look at our stable of products, over 35 percent of our sales are generated from new products, and in the mechanical fastening area I would guess that's three times the industry average. That tells you we will either develop internally or through partnerships with other companies.
What are the company's growth targets?
The intention is to achieve double-digit growth, and obviously that pulls on a lot of different areas. Innovation and new product development is going to be key. Acquisition is going to be key. Making sure we come up with innovative ways to satisfy customer demand is going to be key.
How will you gain those customers?
It starts with this concept of owning the customer's total experience. When somebody comes in and places a call to one of our engineers, one of our sales reps or one of our distributors, typically they come to us when they have to put something together. What we do today is take that customer and say, `OK, let's sit down and, from cradle to grave and after sales service, let's come up with the best alternative for you.'
We use four pillars to support that strategy. First find the right technology and second find the right fastening method within that technology. The third one is system integration. What we're talking about is being able to find the right technology; get the right fastener within that technology; have all the installation tools available; and have partnerships with line integrators that allow us to take a problem and assemble a complete solution and apply it in a customer's assembly environment. Now the last pillar is innovation.
How does the Ford Ranger program fit into this strategy?
Number one, the Ford Ranger program and other platform management concepts are being driven by the automotive companies. As they outsource more and more to the first tier, they have less and less fastening expertise, and they're going to rely more and more on companies like Emhart to come up with the best alternative. They don't want to deal with a vast number of fastener suppliers. They want to deal with one company that delivers what they need when they want it.
How do you overcome the attitude that fasteners are commodities in your efforts to gain that kind of value-added business?
We're in the specialty fastener industry. We're not in this commodity section of the marketplace. That's a very large market that is driven strictly on price, and that's not what we do. We supply assembly technologies, value-based engineering and a complete system approach. That is going into the assembly plants and looking at what might be a number of commodity fasteners. And this is what drives our business in a lot of respects.
People will use a certain kind of product that may be a lower piece price in the beginning, but if you look at the elements of installation, of quality, longevity, warranty issues, you'll find that some of what appears to be low piece-price fasteners end up costing the customer more than what appears upfront to be a high piece-price sophisticated assembly technology solution. It might frighten the customer that it's so complex, but at the end of the day if they don't have to worry about it and they can rely on a turnkey supplier, it takes all the pain out of it.