North American OEMs producing medium-volume, high-mix products are searching for EMS providers close to home, said David Pettigrew, vice president of sales at Creation, Vancouver, British Columbia.
“Some OEMs want to be within 300 to 400 miles of their EMS partner,” Pettigrew said. “Regional contractors can provide the hand-holding that major contractors are unable to do.”
The regional approach is a winning formula for the 11-year-old company, which has 35 customers, nine of them in the United States. Creation provides turnkey manufacturing services for OEMs in the communications, industrial and transportation sectors.
Last year the EMS provider reported sales totaling $64 million. This year, Creation, which has two plants each in Mississauga and Vancouver, hopes to reach $72 million in sales, mostly from industrial controls.
“We never wanted to manufacture offshore,” Pettigrew said. “Our customers want high-quality service for engineering and box-build-level assemblies close to home.”
“We’d like to further develop our presence near the Great Lakes, New England, or in the Northwest,” he added. “We’re in talks with OEMs and EMS companies about acquisitions or mergers in the U.S.”
With the economic downturn taking its toll on OEMs and EMS companies, Creation will most likely have a number of interested parties, according to Shawn Severson, an analyst at Raymond James & Associates Inc., St. Petersburg, Fla.
Several North American OEMs are interested in selling plants as part of outsourcing agreements. And many struggling mid-size and third-tier EMS providers are also prime candidates for Creation’s stateside expansion, Severson 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.