January 19, 2004
Bright ideas | The new owner of Elmet Technologies in Lewiston looks beyond the lighting industry
By Sean Donahue
For more than six years, Jack Jensen tried to convince his bosses at Philips Lighting Co. in New Jersey to sell him the Philips-Elmet lighting components plant in Lewiston, best known for making light bulb filaments. Just before the new year, his persistence paid off when he closed on the business, now called Elmet Technologies, that Jensen thinks has even brighter prospects outside the lighting industry.
Jensen ˆ who worked at the Lewiston plant for nine years before moving to Philips Lighting's corporate headquarters, where he eventually became a vice president of sales ˆ sees untapped potential in the plant's refractory metals business, which fashions the high-end metals tungsten and molybdenum into components for the semiconductor and medical industries. "Philips had no desire to grow [the refractory metals operation] or run it like a business. The company was more interested in taking cash from the plant and putting it back into its lighting business ˆ and that's not a criticism, because Philips is a lighting company," says Jensen. "But I always had my eye on that business, and as I worked my way up the ladder I knew that if the company ever decided to sell it, I'd be in the driver's seat."
It took six years of repeated requests before Philips finally agreed to turn over the keys, plus another year for Jensen to assemble a group of investors, including North Atlantic Capital of Portland, to help buy the plant. But the intervening years gave him time to plot a strategy for the company, one that calls for investment in new equipment for the refractory metals operation and a push for new customers in the semiconductor and medical industries.
With more contracts to produce tungsten and molybdenum parts for equipment such as MRI machines, as well as the emerging economic rebound in the semiconductor sector, Jensen hopes to nearly double the size of the business ˆ which currently generates $40 million-$50 million annually and employs 240 ˆ in five years. "We'll be able to put our profits back into this plant rather than shifting them into other Philips businesses, and continue to focus on high-growth and high-profitability areas," Jensen says. As part of the sale agreement, Philips Lighting also signed Elmet to a several-year supplier contract (Jensen declines to be more specific) that ensures Philips will continue to be Elmet's largest customer.
Running his own specialty metals business is something Jensen could hardly have imagined 32 years ago, as a recent Deering High School graduate just starting work on the shop floor of metal parts maker W. H. Nichols in Portland. He spent the next eight years attending Westbrook College's night school, working toward a business degree, while being promoted through Nichols' customer service department. In 1983, Jensen took a job as manager of sales administration at the Philips-Elmet plant, where he was eventually promoted to director of commercial operations. By 1994, when Philips-Elmet posted particularly strong profits, Jensen caught the attention of Philips' corporate brass, and was called to the New Jersey headquarters. "I didn't enjoy that role as much as I'd enjoyed relying on [my] entrepreneurial spirit to produce a profit," he says.
Jensen knows that sustaining a manufacturing business in Maine isn't easy. But an increased focus on non-commodity items in the refractory metals business, which command higher prices and can lock in customer loyalty, will help the company withstand competition, he says. While some business owners might long for the protection of a corporate parent like Philips, Jensen is ready for the chance to let Elmet Technologies succeed or fail on its own terms. "Before, as part of an international company, our future was not necessarily in our own hands," says Jensen. "Now, our future is what we choose to do with it, how we work together and strategize to keep that competitive edge."
Jensen ˆ who worked at the Lewiston plant for nine years before moving to Philips Lighting's corporate headquarters, where he eventually became a vice president of sales ˆ sees untapped potential in the plant's refractory metals business, which fashions the high-end metals tungsten and molybdenum into components for the semiconductor and medical industries. "Philips had no desire to grow [the refractory metals operation] or run it like a business. The company was more interested in taking cash from the plant and putting it back into its lighting business ˆ and that's not a criticism, because Philips is a lighting company," says Jensen. "But I always had my eye on that business, and as I worked my way up the ladder I knew that if the company ever decided to sell it, I'd be in the driver's seat."
It took six years of repeated requests before Philips finally agreed to turn over the keys, plus another year for Jensen to assemble a group of investors, including North Atlantic Capital of Portland, to help buy the plant. But the intervening years gave him time to plot a strategy for the company, one that calls for investment in new equipment for the refractory metals operation and a push for new customers in the semiconductor and medical industries.
With more contracts to produce tungsten and molybdenum parts for equipment such as MRI machines, as well as the emerging economic rebound in the semiconductor sector, Jensen hopes to nearly double the size of the business ˆ which currently generates $40 million-$50 million annually and employs 240 ˆ in five years. "We'll be able to put our profits back into this plant rather than shifting them into other Philips businesses, and continue to focus on high-growth and high-profitability areas," Jensen says. As part of the sale agreement, Philips Lighting also signed Elmet to a several-year supplier contract (Jensen declines to be more specific) that ensures Philips will continue to be Elmet's largest customer.
Running his own specialty metals business is something Jensen could hardly have imagined 32 years ago, as a recent Deering High School graduate just starting work on the shop floor of metal parts maker W. H. Nichols in Portland. He spent the next eight years attending Westbrook College's night school, working toward a business degree, while being promoted through Nichols' customer service department. In 1983, Jensen took a job as manager of sales administration at the Philips-Elmet plant, where he was eventually promoted to director of commercial operations. By 1994, when Philips-Elmet posted particularly strong profits, Jensen caught the attention of Philips' corporate brass, and was called to the New Jersey headquarters. "I didn't enjoy that role as much as I'd enjoyed relying on [my] entrepreneurial spirit to produce a profit," he says.
Jensen knows that sustaining a manufacturing business in Maine isn't easy. But an increased focus on non-commodity items in the refractory metals business, which command higher prices and can lock in customer loyalty, will help the company withstand competition, he says. While some business owners might long for the protection of a corporate parent like Philips, Jensen is ready for the chance to let Elmet Technologies succeed or fail on its own terms. "Before, as part of an international company, our future was not necessarily in our own hands," says Jensen. "Now, our future is what we choose to do with it, how we work together and strategize to keep that competitive edge."
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