Carson City, Nevada − Ametherm, a U.S. manufacturer of thermistors and other electronic components for circuit protection, has doubled the size of its manufacturing plant with the purchase of a 36,000-square-foot facility in Carson City to meet increased demand. The privately-held company manufactures all of its circuit protection devices at the new facility, which now serves as its new headquarters, and a smaller plant in Carson City. Ametherm expects to hire about 10 to 15 new employees as a result of the expansion.
Part of the expansion also is due to Ametherm's acquisition of the SURGE-GARD inrush current limiter product line, formerly manufactured by RTI Electronics, from Measurement Specialties Inc. last month. The company also purchased all of the assets for the NTC disc thermistor, NTC chip thermistor, and NTC surface-mount thermistor lines.
After Ametherm acquired the RTI product lines, it had a lot of equipment that needed to be installed that could not be accommodated in the smaller facility. "We needed more capacity, and some equipment required more power," said Eric Rauch, president and CEO of Ametherm. "We manufacture ceramic devices that require ovens that take a lot of voltage and current. We run these kilns 24/7 so when we have to add capacity we need to put another kiln online. If you don't have the power, you can't bring it online, so we moved into a building that has a lot of power and we'll be able to be here for a long time."
As a niche player in the circuit protection business, Ametherm specializes in inrush current limiting power thermistors in the power market industry, which continues to grow.
Rauch said the company's sales were up 18 percent before the acquisition. He expects sales to rise another 18 percent next year. He attributes some of the growth to a new sales and marketing program launched last year, and UL approval for some of its higher end products in 2013.
"Our distributor sales are up; direct OEM sales are up, and sales to all different geographies have increased," said Rauch. "I think the economy has come back, and it will be a good couple of years for a lot of people in our business."
"Over the last two to three years, Digi-Key and other distributors have been shipping these parts to different users so we're experiencing the benefit of what's been going on over the past couple of years," he added.
Rauch said the investment in the new plant "stands as a statement of our faith and success in manufacturing in the U.S.A., which we have done successfully for nearly 20 years and began doing at a time when many in this industry were offshoring their operations."
"Most of our competitors have either gone out of business or moved to Asia or are in the process of moving to Asia," said Rauch. "We thought about it but it's better for us in the U.S. so we can watch the quality of our product and have better control over our intellectual property."
Rauch said the company competes very well with Asian competitors in the high-quality thermistor market. "Even if our prices are a little higher, typically the quality is important to our customers," he said.
He attributes some of it competitiveness to its lean manufacturing processes. "We use lean manufacturing techniques so we don't keep a lot of inventory. We make very small lots and try to simplify our process as much as possible to take out the labor cost. We tend to have a higher material cost but the material is the same price here as in Asia, for the most part, so we're able to compete."
In addition, Carson City is a low-cost area to be a manufacturer, said Rauch. "Nevada spends a lot of time encouraging us to be here. They are helpful to businesses. We just haven't seen a need to move to Asia yet. If we ever did, it would probably be in a very small way and only to support customers in Asia."
Rauch said there is no cost savings for Ametherm to move to China. "We went through the whole process and by the time you add shipping costs, freight cost, and cost to lease space, it's actually the same cost or more expensive. The cost of dual facilities adds a lot of overhead. A lot of companies are stuck on this labor cost so we try to do the best we can by being efficient, and using good manufacturing methods to help us deal with the higher labor costs in the U.S.," he said.
The way Ametherm supports its customers in Asia is "by having good distributors like Digi-Key and Mouser, and some distributors in Asia. It's a very fast-growing geographic market for us but we're still able to support it here. These distributors really make it easy to do business in Asia," said Rauch.
"Digi-Key is so efficient. Mouser is the same way. They've built a lot of efficiency into their processes. They can get our samples all over the world by the next day. We added Digi-Key in 2006 and it's been a boon for us. They get our product into so many people's hands all over the world."
"Any new product that we roll out we want Digi-Key to be involved. In fact, we discuss it with them before we even decide to release a new product. They have a good idea of what the customer wants," said Rauch.
It works the same way with Mouser, Rauch added. "We just added Mouser this year and their sales are double what we expected."
"Technology really gives companies in the U.S. a chance to ship all over the world with not a lot of effort," said Rauch.
"When I started out years ago, UPS and FedEx weren't nearly as good at exports as they are now," said Rauch. "Shipping something to Shanghai is like shipping something to Orange County. It's not that difficult."
Ametherm expects sales to continue to increase, particularly from Asia and Europe, with a significant amount of business from power supply and motor drive customers.