Economic Development and Manufacturing

Firstronic gets marketing grant to aid in exporting

CEO expects GR firm to export almost $15 million worth of products this year.

March 8, 2013
| By Pete Daly |
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Firstronic gets marketing grant to aid in exporting
CEO John Sammut expects Firstronic’s export business to reach $12 million this year and $30 million in the longer term.

Firstronic LLC in Grand Rapids has received another State Export Trade Now grant via the Michigan Economic Development Corp.’s Pure Michigan Export Program to help offset marketing expenses aimed at increasing its sales to customers in other countries.

Firstronic, 1655 Michigan St. NE, is a contract manufacturer of electronic components used in a variety of industries, including automotive, medical devices and other industrial uses. It employs about 60 people, according to CEO John Sammut. The company has a 35,000-square-foot facility, state-of-the-art automated manufacturing equipment, and an experienced management team with an average tenure of 20 years.

“At Firstronic, we’ve been proving that ‘Made in USA’ — and more importantly, ‘Made in Michigan’ — is still a cost-competitive option. The STEP grant helps offset some of the costs of getting that message out,” said Sammut. “Over the past year, we’ve won both onshore and offshore business. Of the six new programs we are ramping up in 2013, five will involve us shipping product produced in Michigan to Mexico, China or India. The sixth brought manufacturing back from China.”

According to Sammut, the incremental export business that is currently ramping up will represent approximately $12 million in sales in 2013 and $30 million annually in sales longer term.

He told the Business Journal that Firstronic is on track to do nearly $20 million in revenue this year, adding that three-fourths of that is expected to be export revenue primarily to Mexico, Korea and China.

The manufacturing site Firstronic occupies was originally opened in 1980 under another name, according to Sammut, and changed hands several times. Today, Firstronic is owned by an investment group based in Troy, which bought the business about three years ago from a German auto supplier called Paragon. Paragon was in financial straits, as were many auto industry suppliers when the recession hit, and after the acquisition the business was restructured and renamed Firstronic.

This is the second year Firstronic has participated in MEDC’s grant program. MEDC grants in 2012 worth about $25,000 helped offset the cost of sending Firstronic representatives to visit potential customers in Germany and Romania, which resulted in new projects representing about half of this year’s planned export revenue. An additional grant-funded trade mission to Mexico also resulted in a new customer representing another $5 million of this year’s export revenue.

For 2013, Firstronic has received another STEP grant, which is administered by the MEDC but the money comes from the federal government’s Small Business Administration. The newest grant is for about $15,000, to further extend its offshore marketing efforts, according to Sammut.

Sammut credits the company’s proximity to U.S. product development teams and its material management expertise as key reasons customers are choosing Firstronic.

Its electronic components are mainly controllers, a prime example being a control module that goes into cars to control the heating and cooling systems within the seats.

“We’re shipping a lot of that to Korea where it’s being put in Hyundai cars,” said Sammut.

“When done strategically, outsourcing can be a highly cost-competitive option that preserves U.S. jobs. Companies that evaluate the true cost benefits associated with speed of project launch, schedule flexibility, ease of communication and superior quality quickly recognize that nearshoring critical components closer to their core team saves money. The new business we’ve won will create approximately 50 Michigan-based jobs once it’s fully ramped up.”

He said the company expects to hire more employees this year, possibly 25 to 50, and probably a similar number next year.

One of Firstronic’s customers is a company in Grand Rapids called Stanley Innerspace, a division of the Stanley tools corporation. Stanley Innerspace markets supply/procedure carts, storage cabinets and inventory management systems to medical facilities around the world. Firstronic produces the electronic equipment that incorporates a scanned fingerprint identification process to dispense medications to authorized staff.

Firstronic also produces a radio frequency identification system for Stanley Innerspace, which is used to track individual use of expensive hand-held medical devices used by hospital staff.

An interesting example of work Firstronic brought back from China is a component that goes into DTE electric meters.

“We were able to basically reverse-engineer the product, to reduce the cost and assemble it here, for shipment to the warehouse in Detroit. That’s one of the most recent new contracts, and it’s basically taking business back from offshore,” said Sammut.

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