By Matthew Bunk
FAIRFIELD - When Tronex Technologies Inc. almost collapsed a few years ago, owner Arne Salvesen realized its future hinged on branching out - both internationally and to new industries.
So he started traveling to places such as Shanghai, China, and various cities in Japan to convince business leaders that Tronex makes the best precision cutting tools in the world. Next year he plans to stump for Tronex in Germany.
The international push has allowed Tronex, which had to close several times during the dot-bomb years of 2001 and 2002, to emerge stronger than before the tech bubble burst. Exports now account for about 25 percent of the company's overall sales.
Not only that, but Salvesen discovered Tronex tools appealed to manufacturers in several different industries. Instead of selling mostly to computer engineers who need precision tools to work on circuit boards, Salvesen convinced jewelry makers, defense electronics specialists and medical professionals they also needed his tools.
Now, only two years after the whole operation almost shut down permanently, Tronex seems to have fully rebounded.
The company now makes about 50,000 tools annually, many of which sell for upwards of $60 each, and generates annual revenue of about $1.5 million, he said.
"Now business is very strong," Salvesen said in an interview at the Tronex headquarters in Fairfield Corporate Park. "There's high demand for our products all over the world."
Even though Tronex is a leader in precision tool manufacturing, many people who use the tools don't know they're made by Tronex. Rather than direct sales, most Tronex products are sold in bulk to distributors who put their names on the tools.
"You might be using our tools and not even know it," Salvesen said.
But success hasn't erased vivid memories of more trying times.
"It wasn't long ago that I was concerned about our survival," Salvesen said. "Those were some tough times."
But Salvesen, who holds a masters in business administration from Harvard Business School, and Tronex have moved on.
To complete the turnaround, Salvesen uprooted Tronex from Napa, where it was founded in 1982, and planted it in Fairfield in August. The move gave Tronex more room to grow, nearly doubling the square footage of the Napa facility.
Now positioned for growth, Salvesen knows he can't sit back on his heels. He's actively trying to expand Tronex influence in Asia, Europe, Africa, Australia and South America - places he sees as untapped markets for high-quality precision tools.
Right now, though, most of the tools - which basically look like fancy pliers that keep their edge much longer than the hardware store variety - go to North American companies. But for a small manufacturing company with 10 full-time workers, in addition to sales representatives in more than a dozen countries, export sales are stronger than many would expect.
"There's a lot of international potential," Salvesen said. "If we can compete worldwide, we'll be all right."
The challenge for Tronex will be to convince buyers they would be better off using tools that keep their edge through half a million cuts rather than use a throw-away tool, like those made in China.
Made from durable carbon steel, each Tronex tool goes through 30 steps in the manufacturing process. The blades are hardened to two times the strength of the rest of the tool to make sure it keeps an edge.
"It's a simple product, but complicated to make," Salvesen said as he gave a tour of the machine shop behind the Tronex offices and lobby. "Because the company is small, we have more control over every tool."
Employee expertise is perhaps the most important aspect of making a Tronex tool, and many of the employees have been with the company since Salvesen took it over in 1996. In fact, four machinists on staff come from the same family.
Salvesen encourages his workers to go through the machining program at Napa College, where Salvesen serves on the advisory board. He said employee education is a company goal.
"Many of our workers are Mexican Americans who at one time held seasonal positions, mostly in the fields," he said. "Over the years they've become some of the top operators, and we try to keep them as long as we can."
As long as the operation runs smoothly at home, Salvesen and his wife and business partner, Karin Salvesen, can ply their wares overseas.
A native of Germany, Karin Salvesen might be a big help next year when Tronex tries to open up trade routes in that country.
"We do well in Japan, and we just started in China," Arne Salvesen said. "Next up is Germany, which could be a challenge because they all think American products are inferior. But we have a lot of customers who say there's no better tool in all of Germany."
Reach Matthew Bunk at 425-4646 Ext. 267 or firstname.lastname@example.org.
Visit Tronex Technologies Inc. on the web at www.tronextools.com.
Monday, December 13, 2004
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