Nor did a weak North American market for electronic manufacturing services during the past year. Rather, the Burnaby-based company has emerged as the biggest in Canada and is now looking to new markets in the U.S. to beef up even further.
“We’re just crunching numbers now, but in general terms, we expect double-digit growth over the next two years,” said chief operating officer Arthur Tymos.
Creation bought a manufacturing plant in Mississauga, Ont. from AimGlobal at the end of 2001 for $4.5 million after walking away from a deal to merge with its competitor.
The plant doubles Creation’s manufacturing capacity in the east. More recently, it opened new sales offices in Chicago and New York to pitch new customers in the central and north-east US.
And, it is starting to target a broader market for its contract manufacturing services, expanding on its core wireless and industrial capabilities into more instrumentation and medical diagnostic equipment, said Tymos.
Jeff Rath, and analyst with Canaccord Capital Corp. in Toronto, said most companies in this sector fell on hard times during the past year, burdened with high debt and by falling ales. Many are in receivership. Others such as B.C.-based AimGlobal and Alberta’s Electronic Manufacturing Group are in financial distress, he said.
“In this business, you’re tied so close to customers that if they run into trouble, you get into trouble,” Rath said.
Creation escaped falling into that trap by keeping its debt reasonably low and limiting its exposure to its customers, he said.
“What doesn’t kill you, makes you stronger,” he said.
Now, demand for electronic manufacturing is starting to pick up, he said.
As part of the proposed merger with AimGlobal, Creation was supposed to make a “significant investment” in AimGlobal, said Tymos. Part of that money will be used for its’ southward expansion; the rest will be used for another possible acquisition or merger, he said.
Creation has about 525 employees and reported revenues of $113 million last year. It has posted profits every year in the past 11 years, said Tymos.
It has about 25 customers in Canada and six in the U.S., including one new American customer, he said.
About Creation Technologies
Creation (www.creationtech.com) provides total product lifecycle solutions including turnkey design, rapid prototyping, manufacturing and fulfillment to its customers around the world. Since 1991, Creation has been focused on making it easy for OEMs to ‘say yes’ to their customers. The company of approximately 3,000 people operates nine manufacturing locations, two design centers and a rapid prototyping center in the USA, Canada, Mexico and China. Its OEM customers are in the Industrial & Instrumentation, Medical, Communications, Transportation, Aerospace, Defense & Security, and Energy & Environmental markets.