About 10 years ago, Samco Machinery Ltd. discovered a way to improve its business and grow its business through globalization, all while helping customers. CEO Bob Repovs recently presented the Samco story to students at the Sprott School of Business at Carleton University as well as the Telfer School of Management at the University of Ottawa, both in Ottawa, Ontario.
It’s a story that may serve as a blueprint for a manufacturing or service business in any number of industries. Somewhere, someone needs and wants your products or services. At the risk of oversimplifying, the key is knowing what you do well and, of course, finding someone willing to pay you for that product or service.
Samco Machinery is a manufacturer of rollforming equipment for a variety of industries, including building and construction, storage, automotive and HVAC. Founded in 1972 in Toronto by Joe Repovs (Bob’s father), for years Samco did much of its business in the United States. After reading Thomas Friedman’s bestselling book on globalization, The World is Flat, the Repovs family investigated doing business in India, one of the countries Friedman sited as a country open to North American businesses in his new book.
“We picked India for three reasons,” explains Bob Repovs. “They have a British system of law, so we would have an understanding of how to protect ourselves and our business. They speak English in India and, obviously, communication is very important to making any partnership work. Finally, we had some employees who were born in India and they became a big part of the development process.”
Meetings with potential customers led Samco to an eventual partnership with Tata, a large conglomerate with interests in multiple industries, including an expanding venture in the automotive market. Tata was searching for a way to produce the world’s least expensive car, the Nano. Part of the solution would end up being rollforming equipment from Samco Machinery to produce various parts of the car’s undercarriage.
The equipment was constructed by Samco at its Canadian headquarters at the insistence of Tata because of the quality of Samco’s engineering and manufacturing capabilities. Samco eventually opened a facility in New Delhi to serve the growing market in India. The country’s infrastructure is growing rapidly and Samco has already supplied roll formers for many products being manufactured in India. Shelving and racking, steel stud and framing, purlins, and automotive are among the growing industries. Samco currently operates the 20,000 square foot plant in India with 60 employees. This corporate growth has not led to any reduction in employees at the Canadian plant. Samco now competes for business in Asia and the Middle East and brings a strong manufacturing reputation.
It may sound simple, but Repovs said the company experienced several growing pains along the way. “Operating in a foreign country has its challenges no doubt, but our experience and knowledge gained in India has helped us export to 32 other countries,” he says.
With a new plant in India, Samco also has been able to hold the price on a number of products in large volumes over time by supplying product to Canada at reduced cost by saving money on labor. Standard mechanical items are manufactured in India and then shipped to Canada where hydraulic and electrical work, integration, and final testing is done.
“The Vision of the Company’s founder to target India over 10 years ago has been an ingredient to our success through tough times and markets,” Repovs says. “The venture has opened doors and created opportunities globally, which otherwise would not have been possible. However, execution of the plan remains everything.”