Electronics manufacturer Urtech Manufacturing is based in Burlington, Ontario, and provides a wide array of services from product prototyping and engineering, to production-scale manufacturing and post production services.
Urtech is dedicated to providing exceptional manufacturing services, utilizing cutting edge technology, processes, and equipment. It’s focused engineering team offers many years of experience in the electronics manufacturing sector, and the production team is fully trained and skilled in assembly, test and fulfilment operations. Company President and founder Greg Gehl talks The Canadian Business Quarterly through the formation and continued growth of the company.
“I started Urtech Manufacturing in 2010,” Mr Gehl says, “so during the recession. Just before that, I was at a company where we were outsourcing everything overseas, and so I started looking at the pricing that we were getting overseas.” The company was at that time plagued by problems in quality and communication, as well as difficulties working across time-zones. Mr Gehl felt he could offer a competitive service within the bounds of Canada, whilst also eradicating some of these long-standing issues. “I boot-strapped it myself. I had some cash, so I decided to invest it in my own company and started that way. Then after about a year and a bit, I had a couple investors join me as well, so it took off from there.”
Mr Gehls’s early career included a stint with electronics manufacturer Celestica, which was originally an IBM facility. Making the transition from Original Equipment Manufacturer (OEM) to Contract Manufacturer (CM) represented a big learning point in his career. “It was a big step, and that was the boom days back then,” he says, “when the Contract Manufacturing world was really starting to grow and just becoming its own thing. So that was definitely an eye-opener.” By filling several different roles for Celestica, Mr Gehl was able to round out a number of his professional skills. After this position he moved on to another firm, a broadcast equipment and solutions company in Burlington called Evertz.
“It was a small company,” he explains. “We were doing about $5-10 million in business a year. So in the 5 years I was there we grew up to $300m and we did some acquisitions there as well, we expanded into the UK. So that was interesting.” All of these new endeavors helped Mr Gehl gain plenty of additional knowledge and understanding of the industry, providing valuable experience in acquiring other companies and managing multiple sites and facilities.
When it came time for Mr Gehl to start his own company, these years of experience were paramount in helping him recognize the significant issues in the industry and to work towards finding new solutions. The main idea was to manufacture on Canadian soil. “Anybody who’s had to deal with overseas knows some of the problems,” he says. “Communication is the one thing, there are definitely language barrier issues, and [there’s] also cultural differences as well.” In Mr Gehl’s experience, dealing with companies in different cultures and countries can easily produce crossed wires, with the understanding of intricate business dealings often getting lost in translation or misinterpreted because of custom.
“I’ve been in the industry quite a few years, so I need some people for equipment and that as well. So, I just looked for a facility, a small building, and I went and did it all up so it looked good inside and found some used equipment, and that gave me my start.” Mr Gehl admits that the equipment he acquired was not of the best quality, as he was limited to using resources from his own pocket. Things started to change when he called upon his relationship with Panasonic to pay for an upgrade on the equipment.
Having started off working in broadcasting and communications, the company now operates across a few different sectors, offering manufacturing solutions to a number of companies requiring different services. “The company Evertz, which I was at before this one, they were a broadcast company, so they build products for guys like Fox, CNN, all the big network guys. So I definitely had a background in that, and appealed to people in that marketplace.”
With connections formed at Evertz, which grew to become one of the top broadcasting companies on the market, Mr Gehl was able to retain a number of clients when he started Urtech, once more by utilizing the expertise he had amassed. “That product set as well is very complicated,” he says. “Those are high-technology boards, they use a lot of the latest and greatest technologies, so the fact that we could do that meant that we could do other things as well.”
From this solid platform it was easy for the company to expand into simpler products. Where many in the broadcast industry look for low volume products, there was plenty of space for the company to grow into providing higher volume within other industries. “Some stuff might just be ten boards a month, or ten boards every other month. A high runner for the broadcast industry might be 100-200 boards a month, so it’s not high volume stuff. But we grew, and we’re doing one customer’s stuff that’s almost a million units a year.”
World Class Operation
Through Mr Gehl’s positive relationship with electronics giant Panasonic, Urtech has found itself in the position of having access to the newest technologies, a position that has greatly helped its rise in the manufacturing industry. “I buy all my machines brand new. I make sure we can do the latest and greatest technologies. We’re doing 0201s, 0105s, so that’s the smallest components you can get. We’re doing 0.2mm pitch BGAs and LGAs, again that’s the most complex stuff you can place.” By utilizing this world class equipment, Urtech is now able to place chips such as big BGAs and FPGAs, like the Virtex 7, a chip that was costing around $20,000 a piece when it first came onto the market.
“When you’re placing chips that cost that much money,” Mr Gehl explains, “you better make sure your equipment is good. You don’t want to have any bad product. That’s where quality is paramount.” Likewise, the company’s approach to hiring Tier One staff has helped it grow significantly. With the company nearly doubling in size every year, Mr Gehl admits that it represents a positive story that people are keen to get involved with. “I’m focused on keeping jobs in North America, so I have a plant in Canada, I have a plant in the US. I plan to expand in the US as well, so I think that’s a good news story. Everybody thinks you’ve got to go overseas or to Mexico to be cheaper, but you don’t.”
With the right equipment, the right people and the right processes in place, Mr Gehl and Urtech are proving that a company can be competitive within the bounds of North America without having to look overseas for assistance. “You give people what they want,” he says. “Their good quality product, in the time that they need it and want it, and help them with their engineering live and in real time, in the same time-zones.” Urtech Manufacturing employs a diverse team of staff with many years of global experience, bringing a significant level of knowledge to the table in order to satisfy the needs of its client list, which is made up of both SMEs and larger organizations.
“If we don’t have that direct knowledge, then we probably know someone who has it. We still have good contacts in the industry. If we need lab work done, I don’t have my own Scanning Electron Microscope, but I know how to access one.” This ability to offer a greater service is down to Urtech’s team of Tier One experts, and represents extra value added which smaller Contract Manufacturers will have neither the knowledge or the ability to provide. “I think the exciting thing is, like I was mentioning, the fact that we can be competitive here in North America. I think people are starting to realize that sort of thing and the value added of actually manufacturing where the product needs to be.”
North America represents a huge market, meaning having factories on the continent to produce and fulfill those needs for that market is paramount. If Urtech were to expand overseas, it would make more sense to have a plant in the country where product would be supplied. “Everybody’s heard the story about Apple,” Mr Gehl says. “‘Oh, well Apple’s overseas, so we have to be overseas’. Especially with young startups, you hear that so much. The kind of volumes you’re doing, they’re doing it overseas, but they totally control the supply chain.” Manufacturers overseas will in many cases employ a whole engineering team to live and work onsite at one of its facilities, but this setup represents an overhead most companies are scarcely able to afford.
“If you need a product in that area, it’s good to build in that area. You should employ people in that area as well, and that’s something that we’ve definitely done. In Canada we expanded our operation many fold and [in the US] we’re looking to more than double the staff as well.” Mr Gehl believes that if the company is able to maintain this rate of growth, there is the potential for it to grow to be 5-10 times as large as it is at this current moment within the next twelve months.
“We have 300 employees now,” he says, “across three shifts. Turnover’s pretty low, but the nice thing is, [they’re] manufacturing jobs, so nice steady jobs. We have engineering jobs as well, of course we have buyers, purchasers. We definitely hire a diverse group of folks.” For Mr Gehl, manufacturing positions represent good core jobs for people. He laments the fact that the Canadian government has little desire to help out with manufacturing, assuming that people without university degrees should remain in lesser paid positions.
“A job like this, they can actually learn some skills and do some different things. I think it’s a good opportunity for folks and I think it’s a better lifestyle than everybody having to work in the service industry.”
Urtrech has both helped and been helped by other local companies that were a similar size when they started out. By forming professional relationships, all parties have succeeded in growing alongside each other. “We’re a Contract Manufacturer,” Mr Gehl explains, “so we build products for [our clients]. We’ve had some great news stories where we’ve worked with companies when they were small and they’ve grown as we’ve grown as well.” In addition, the company has started an initiative to reach out further into the social sphere, allowing a number of electronics startups to rent some of its tech space, machinery and goods as part of a hardware accelerator.
“It’s called UrStart, and I started that up because, if I can help somebody out, I will. I don’t make any money off that kind of thing, but if you give somebody a chance, a company might make it or it might not. Hopefully if we help them a little bit, they’ll actually be able to make it.” Mr Gehl admits that even those companies that don’t make it in a difficult industry will have had a great experience by being part of UrStart, and that many of these people will go on to prove valuable in the future. “They’ll remember us if they’re doing another product,” he says. “If you can help somebody out, why not? You don’t have to be in it for a buck. Shows like Shark Tank, you get these companies go in and they want to take ownership of these new startups. That sickens me.”
Mr Gehl admits he’s been lucky to have great investors in his company that have allowed it to thrive, and that he can’t see any reason to try and take control of other companies. He believes that people starting up businesses are doing the hard work and should maintain control. Often the hardest thing about starting up a business is not in having the knowledge or the product, but in knowing how to go about finding the funding to get it off the ground. Mr Gehl admits that this process can be a slippery slope.
“You want to make sure you find somebody good, somebody you can trust, somebody you know. That’s what I would suggest. If you can’t, make sure you get referrals, don’t take the first money that’s thrown at you. You have a good product, use that as leverage.” It is important to both get along with any potential investors and also to have somebody who shares the same goals. Many angel investors will enter an agreement with a five-year exit plan, and startups need to make sure they are prepared for what an investor wants.
“Startups will say, ‘our investors told us we have to be overseas.’ So they go overseas, and find out that they have to fly people back and forth to China all the time, and they’re having quality issues and communication problems, and it ends up costing a lot more money.” This is just another example of how the need for manufacturing in the place the products are sold is becoming larger. For Mr Gehl, this is one of the main considerations in terms of continuing to grow the company and play to its strengths.
“I think the focus on having manufacturing where the products are, you’re going to see that more and more. Trump definitely doesn’t hurt that for the US, but other places are realizing that. It reduces a lot of the headaches and you help boost the economy in the area as well.” The goal for Mr Gehl is to keep growing the company every year, and this is likely to see more acquisitions considered. Mr Gehl admits he would like to have another company acquired this year, and maybe two more the year after.
“The electronics industry definitely isn’t shrinking,” he says, “that’s the exciting thing about it. It’s a huge marketplace. There’s been a lot of consolidation in the marketplace, people looking to do acquisitions, people looking to be acquired.” If an acquisition comes up for the company that that looks viable and good, then Mr Gehl admits he will take a look at it, even those that might require moving out of the North American marketplace. “I looked at a place in Germany last year, I went there and visited it. It just wasn’t a good fit for me, so I turned it down. Again, if you can find something that’s the right fit, then I believe that you can make it competitive and you can do good things in that area.”
Find out more about Urtech Manufacturing by visiting www.urtechmfg.com.