HOLLAND — After losing nearly a quarter of its annual sales because of the struggling oil and gas industry, Hemco Gage Corp. plans to expand its reach by targeting medical device and aerospace manufacturers across the country.
The Holland-based manufacturer of precision gages, a type of measuring instrument, plans to enter new markets in Missouri, Kansas, Florida, Georgia, Alabama and other states along the East Coast.
“Right now, we’re trying to replace the business we lost in the oil industry, knowing that when the oil industry comes back, that’s going to be our growth,” said Mike Hop, vice president of Hemco.
Manufacturers use gages as a quick yet accurate quality check for components coming off a production line. Operators can screw the thread gages onto the part or press-fit the cylindrical gages to check that the components meet customers’ standards.
“Gages check the functionality of the thread, so if you make the bolt in Seattle and you make the nut in Georgia and you bring them together in Kansas, they’re going to fit together and stay together,” said Chris Wysong, president of Hemco. “It doesn’t give you an actual dimension on your part. It’s really, ‘is this going to work’ and it’s a quick check right at the line.”
Some of the company’s gages are extremely small and have upwards of 80 threads per inch. Since Hemco works with such small dimensions on its products, it often must contend with tolerances roughly 100 times smaller than the diameter of a human hair.
The company also offers a proprietary chrome plating process that increases the lifecycle of gages to at least twice as long as competitors’ products, Wysong said.
Hemco employs about 60 people at its Holland facility and generates annual sales of nearly $7 million.
As the oil and gas industry remains stagnated by historically low oil prices and a glut of production, Hemco plans to switch its focus from large manufacturers of drilling and construction equipment to servicing small parts manufacturers. Not only do the medical device and aerospace industries offer more long-term stability than other customers, but also manufacturers in those sectors are easier to reach since they often are clustered in a handful of areas, Hop said.
The global medical device industry is expected to grow 4.4 percent a year after reaching a projected $384 billion in annual sales in 2015, according to a report from EvaluateMedTech.
Meanwhile, annual production levels of commercial aircraft are expected to increase 26 percent by 2025, driven by increased air traffic and orders for next-generation passenger aircraft, according to a global aerospace and defense sector report published by Deloitte.
In addition to producing the gages, Hemco also offers custom engineering services to help companies develop threads on their products, Wysong said.
“If a company is trying to design a new widget and they want to have some sort of special thread on their product so their competitor can’t duplicate it, they might call us for help designing that thread so that it fits the application,” Wysong said.
Offering engineering services is helpful for the medical device industry since many of those manufacturers produce products with unique thread pitches and diameters, he added.
A CHALLENGE FROM TECHNOLOGY?
While companies are increasingly moving toward laser imaging technology to perform quality checks on their components, Hemco executives think their firm will still maintain a piece of the market.
Current imaging technology lacks the ability to examine both sides of a thread’s pitch and cannot reliably measure a threaded hole, Hop said. Moreover, imaging technology is not able to meet the industry-required pressure engagement standards between two threaded parts.
“There is a place for it in the market, but it is going to be a difficult sell when it comes to using that for threads,” Hop said of the laser imaging technology. “A lot of times, customers will use technology to measure their first part to make sure it’s good and get the machine set up and make those last adjustments because it gives you an actual measurement. But once production starts, there’s nothing that can replace just a quick check by an operator (with a gage).”