In the midst of the worst economic downturn in electronics industry history, BreconRidge Manufacturing Solutions has survived its first year as an EMS provider.
The Ottawa, Ontario, company was established last September by Terence Matthews, the founder of Newbridge Networks Corp., and four former Newbridge executives. Matthews sold Newbridge, a Canadian networking enterprise, to French telecom equipment maker Alcatel S.A. in May 2000, in order to raise more than $10 million to fund the EMS venture.
"Matthews wasn't ready to retire," said Don Hnatyshin, BreconRidge's executive vice president of business development and procurement. Formerly Alcatel's global vice president of procurement in Ottawa, Hnatyshin once worked for Newbridge. "Matthews asked a number of former Newbridge executives to become involved in EMS," he said.
In February 2001, Matthews purchased the global manufacturing, distribution, and repair operations of Mitel Networks Corp., Ottawa, to launch BreconRidge. Today, Matthews is BreconRidge's majority shareholder and Hnatyshin is among the managers and employees who own the remaining shares of the company.
The EMS provider is focusing on automotive, computing, industrial, medical, and telecom OEMs in eastern Canada, the United Kingdom, and the United States. So far, BreconRidge has served 50 customers from its plants in Caldicot, England, Ogdenburg, N.Y., and Ottawa.
The contractor also has relationships with several Asian suppliers to round out its low-cost manufacturing footprint. BreconRidge has 700 employees and operates at a $175 million revenue run rate, according to Hnatyshin.
"We're looking for OEMs in the $25 million to $1 billion revenue range," he said.
BreconRidge hopes to avoid the demand forecast and inventory miscues that have weighed down the electronics supply chain over the past 20 months. Better communication between EMS companies and their clients is the answer, Hnatyshin believes.
And through better communication, "We want to bring value to our customers' balance sheets. That's the true measurement of success," he said.
"It's good that BreconRidge is interested in higher-margin markets like automotive and medical," said Kevin Kane, an analyst at IDC, Framingham, Mass. "These former Newbridge executives will probably leverage their former business contacts [to try to make a go of their EMS venture]."