Richey veterans form venture

Arrow is cable-assembly company’s first big customer

By Richard Richtmyer
Electronic Buyers' News
(09/08/99, 11:10:54 AM EDT)

Two former Richey Electronics Inc. executives are striking out on their own, forming a new cable-assembly company with a unique strategy

. Steve Burk, former director of Richey's contract-assembly operations, and Loc Ha, who was director of engineering for that unit, established ISC Engineering LLC in June, and it became fully operational late last month.

With only seven employees and a 5,000-sq.-ft. facility just east of Pasadena in Duarte, Calif., ISC has set its sights, not on becoming a competitive manufacturer of cable-assemblies, but on forming partnerships with companies that can benefit from their expertise in custom cable-assembly production.

”There are about 900 cable-assembly companies in the United States, and only about 50 of them do molded cable assemblies,” said Burk, who is now ISC's president.

”So we've set up a capability where we are contacting these companies and beginning to work with some in assisting them in utilizing custom-molded cables in their product offering,” Burk added.

Being on their own won't be a new experience for the pair, each of which has more than 25 years' experience in the industry. They became part of Richey's former senior management team when Richey in 1995 acquired a company that they had established four years earlier. The company, Inland Empire Interconnects, had its headquarters in Ontario, Calif.

”We sold that company to Richey, and that's what put them into the molded cable-assembly business, because that's what we did,”

Burk said. Burk and Ha stayed on to work with Richey to develop its cable-assembly business.

Richey was acquired in January by Arrow Electronics Inc. And although Burk and Ha left Arrow in May, the distributor is their first major customer.

”When we left Arrow, the company contracted with us to continue providing [cable-assembly engineering support],” Burk explained. “So we had a very positive separation between ourselves and what used to be Richey.

” Now, with the Arrow contract as a foundation and their own dollars backing the venture, they hope to use their experience and expertise to foster the use of molded cable-assembly technology in the industry.

ISC also is close to sealing deals with two other cable-assembly outfits.However, Burk could not say which ones because of non-disclosure agreements the company has entered into with them.

”Quite frankly, our passion in this business is to move forward and expand the use of over-molded technology in the cable-assembly industry for the companies that currently don't have that capability available to them,” Burk said.

”We've run production and had a pretty significant production company ourselves,” Burk added. “And our desire here is not to become a large production company, but more of an engineering, development, design, and strategic partner to assist other companies that want to expand in this product area.”

In addition to custom-molded cable-assemblies, ISC will focus on developing specialty products such as molded cable assemblies with electronic elements embedded in them, according to Burk.

In the next four years, Burk said he expects ISC's annual revenue to grow to about $3 million or $4 million. However, because of the company's approach to the business, he does not anticipate much change to its cost structure.

”I would expect that our existing building will carry us pretty close to the $4 million range,” he said. “The number of employees will be dependent on the complexity of products that we build, but we'll probably end up with less than 30 employees.”

SOURCE:ELECTRONIC BUYERS NEWS, SEPTEMBER 1999