Paragon Boosts Manufacturing Base

June 5, 2002
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GRAND RAPIDS — Call it one small step for the local economy, but also recognize that it is one giant leap for the citys advanced-manufacturing industry.

Paragon of North America is in the final stages of starting production on state-of-the-art electronic circuit boards at 1655 Michigan NE. Last week, the wholly-owned subsidiary of paragon AG of Delbreck, Germany, closed on the 20,000-square-foot building it bought from Printing Arts Co., which moved to Walker.

The importance of paragon coming to the city isnt lost on the jobs the firm will create here. Not at all. But more important is what the company will do for the city, and that is place it near the top of the advanced-manufacturing world  a glamorous, high-tech field that many urban markets want to claim for their own.

I think what they are bringing to West Michigan is some technology that complements and will support our other advanced manufacturers, which is one of the reasons why we worked very hard to get them here, said Birgit Klohs, president of The Right Place Program, a nonprofit economic development organization that worked with the Michigan Economic Development Corp. to bring the firm here.

Paragon looked elsewhere before deciding on Grand Rapids. The company first tried a joint venture with a Reed City firm, but the fit wasnt right. Then paragon executives looked at southeast Michigan, mostly Oakland County, because the company supplies circuit boards for the European auto market and thought metro Detroit would be a natural place to locate for the North American market. But that search didnt uncover the right partnership, either.

Then in March, the company revealed that it made an offer to purchase the controlling share of the Miquest Corp., a local electronics component manufacturer that had sales of $5.3 million and employed 40 on the citys northwest side.

The longer we talked about it, the more we saw the fit was right, said Brad Ftruebig, company CFO. So we looked at Grand Rapids because of Miquest, basically, and also because we got very good support from The Right Place Program, from Birgit Klohs.

Ftruebig (pronounced Strewbig) said that Miquest had the chemistry, the machinery, the quality-assurance program and the reputation for manufacturing excellence that paragon wanted. There were a lot of factors that attracted us to Miquest, he said.

The size and location of Grand Rapids also played roles in why paragon came here. Ftruebig said being the states second-largest city and being less than three hours from the Motor City helped convince company officials to set down their circuit-board roots here.

Paragon will use about 17,500 square feet of the Michigan Street building to make circuit boards and another 2,500 square feet to administer the business. City commissioners will hold a public hearing on rezoning the building on July 10. The citys Planning Commission gave paragon its blessing in May.

When production starts, paragon will be making boards for an array of current clients and then look for new business from automakers.

The start we have is basically with the Miquest customer base and the Miquest customer base doesnt have a lot of automotive customers right now. Its basically machine controls, a few medical devices and a couple of boards for the information technology industry, said Ftruebig.

Then paragon is going to go after automotive customers, he added. So we will add a new perspective to that, looking at it from the Miquest point of view.

Both paragon and Miquest use surface-mount technology in their production process. Paragon uses that method to produce the worlds smallest air-quality sensor, something the firm will make at the Michigan Street address.

In fact, that sensor, first produced in 1999 as the MK3, was why paragon decided to come to North America. It only took a year for the sensor to become the favorite of the European automotive industry. Now the company produces an improved version called the MK4.

We are selling that very well in Europe. Its coming into cars all over the place in Europe, right now. In the Asian and North American markets, the demand has not yet been there, yet, said Ftruebig.

But the North American market will adopt devices that are engineered in the European markets after a while. So we considered that if we didnt move into the North American market and start marketing the air-quality sensor there, somebody else would do that. And there is competition out there, even though we clearly have the number-one position.

Ftruebig said paragon expects that it will take about four years for the company to get North American OEMs to include its sensor in their products. He added that paragon also plans to eventually produce the sensor for Asian carmakers here.

The reason being these contracts are made in dollars and so it makes sense for us to have them produced in an area where we calculate in dollars, he said, instead of making the sensors in Germany and having to recalculate euros into dollars.

Paragon of North Americas 51-percent purchase of Miquest also has closed. Miquest will continue to serve its current customers under its current name. The new business brought in by paragon will be done under the paragon name, but Miquest will do paragons production.

The technology that they are bringing in here for sensors is very advanced, said Klohs. And I think they will have a very nice niche here. 

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