Ventec International Group Expands North American Focus

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Matties: That's nice to understand where the weakness is and be able to have resources to apply there, because it's one thing to have a weakness, but without the resources to fix it…

Alessio: Yeah, this company is committed to the North American marketplace. It's a huge opportunity. We capture only single-digit percentages in available market in the U.S. The opportunity is large.

Pattie: I always say we can create our own economy really, because we have so much market share to go after. It's in various segments. When you look at our standard lead-free products, we have more market share than we do in our polyimide. The huge areas of growth for the next few years will be our polyimide and our IMS metal-backed materials.

Matties: That's a big market.

Pattie: It's huge. We've recently had some significant OEM approvals that have just come through on the polyimide and IMS. Ventec's IMS manufacturing capacity is absolutely huge in China, and we've quadrupled that capacity in the last 18 months to meet the current and expected demand. 

Alessio: When we talk to you next year that will be a nice success story to share.

Matties: With your capacity and your logistics centers, what's the typical delivery time for people?

Pattie: When you look at our North American footprint, currently we have five service centers. Part of Chris's new responsibility is to build out our new facility in Fremont. We have quite a bit of inventory. Even though we are a manufacturer, we act as a distributor and value added service provider in the North American marketplace. With good material planning, we should be able to meet all of those demands. That hasn't really been an issue for us.

Alessio: Having availability is key, and we're continuing to strengthen the planning side of our business, because most of our customers will tell you they cannot forecast what they're going to need in 30 days. We look at past history of consumption, and we're translating that into our own forecasting models through our planning group, and to Jack's point, bringing over inventory, putting it in our hub locations in the U.S., and supporting these customers. Do we get it right all the time? Of course not. If we can get it right 80–90% of the time, we'll do pretty well, and then we can shuffle around through various locations to fulfill that extra 10–20%. We also have press capability in Southern California, so we have the ability to react quickly to a unique need that a customer might have, or just something we don't have in stock, we can press it ourselves and get it to that customer within a few days.

Matties: It sounds like you've got laser focus at this moment.

Pattie: It's interesting you mention that, because when Chris came on board I said, "We have so many opportunities. It's almost too many. You work on so many of them and you don't really close them." We call it our sniper approach. Instead of what we were doing before, we have picked key targets that we have identified as a good partnership for both companies. Just in the last month we've really moved those relationships further, even to the point where we've had two significant customers come to China and look at our facilities. When that happens you know that's a pretty big commitment from them and their facility.

Matties: Coming back to OEM approval, what does that cycle look and feel like?

Pattie: It's long, depending on what material segment you're looking at. If you look at signal integrity OEM approval, it could be years. There's a lot of testing. There's a lot going on in that space. It could be very rewarding to someone who is absolutely able to get those approvals. Then you look at the mil/aero side. Quite frankly, there's a lot of market dynamics including issues with our competitors that are expediting new OEM approvals.

That's given us some opportunities that have made the OEM process a bit shorter, because there's a real incentive. In the mil/aero segment, you need dual source which has helped us out quite a bit. Then with our IMS products, which is mostly LED lighting and automotive lighting, some of our major North American based competitors, quite frankly, are very expensive and difficult to deal with. We're not only working with the OEM side, but the PCB factories are really pushing. There's a push and pull effect where they're actually assisting us to get these OEM approvals. They realize that we're far easier to work with, our quality is as good as anything out on the market, and our price point is really competitive. Everybody wins in that market space.

Matties: It's a good position to be in when you're looking for approvals.

Pattie: Definitely, and we have experienced global account managers with 20-25 years experience on our OEM team that specifically address those market segments. Still, it's not an easy thing. There is a time frame and a cost to doing it.

Matties: How has the downturn in Asia, and China in particular, impacted your business?

Pattie: For Ventec overall, it hasn’t really.

Matties: But have you seen any impacts here from that? We keep hearing some talk of reshoring. Are you seeing any of those types of increases?

Pattie: We do see some of that, in particular in the metal core PCB, where it's not a type of board that lends itself to air shipping because it's very expensive. So that’s given the North American PCB manufacturer a more even playing field.

Alessio: Frankly, I think we're seeing some advantages, and our competitors are as well, with the price of copper and oil being down. So freight costs are a little bit lower. Our unique approach to the market is not having this distribution network in the middle. You look at raw material costs savings coupled with sales channel savings, and that allows us to be very competitive. We're not here to sell on price, but let's face it, people want a good price. We have the quality, service, and price.

Matties: All things equal, price is the deciding factor. Is there anything else that we should talk about that we haven't covered?

Pattie: I think the main thing is the opportunities that we have. We're growing with our infrastructure to support those opportunities. In the last two months we've had three key hires for the U.S. market. I don't think everybody out there can say that they're investing in their business, and we're really encouraged about what we see.

Alessio: I would just add to keep your eye on us in terms of new product development. We'll be coming out with some new materials later this year and into next year that we believe will allow us to leapfrog some of our competitors and get our OEM customers really excited to use our products and put Ventec on the print. So it's exciting.

Matties: It's exciting for you, Chris, I would think. It's the same industry, but something entirely different.

Alessio: Yeah, a little further vertical in the supply chain here, and I am excited. It's a great opportunity. I like small organizations, which is what we have in the U.S., and to help them grow and prosper.

Matties: And we've known these guys for years, and they're really great guys. You've landed in a great spot. Chris and Jack, thank you. It’s been great catching up with you.

Pattie: Thank you, Barry.


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