Here's an article from today's Boston Globe on AFCX:
MANUFACTURING: AFC CABLE
Plugged into market
Cheaper installation, specialty products let Mass. cable firm soar in
struggling industry
By Joann Muller, Globe Staff, 07/23/97
In the Hollywood movie ``Other
People's Money,'' Danny De Vito plays
a corporate raider who takes over a
down-and-out company called New
England Wire & Cable.
Although the Providence-based
company is fictional, its portrayal as a
stagnant company in a dying business
is typical of the way many people view
the wire and cable industry.
But AFC Cable Systems Inc. of New
Bedford has been reading from a
different script.
Instead of shriveling up and dying, the 71-year-old company has been racking up impressive sales and profits by bringing innovation to an old business.
Last week, the company announced another record quarter, as net income soared 51 percent to $4.4 million, and sales rose 28 percent to $54.2 million. The company's stock has been marching upward, too. In April, the company offered 1.55 million shares of stock at $19 a share. Yesterday, it closed at 28 9/16.
In a state known for its leading-edge technology companies, AFC Cable can hardly be called flashy. Its core product is armored cable, a product that's been around for seven decades.
It's essentially copper wire wrapped in a flexible steel or aluminum jacket that snakes its way through the walls, floors, and ceilings of offices, hotels, and other commercial buildings.
But AFC is growing rapidly, thanks not only to a boom in commercial construction, but also to the company's own aggressive marketing efforts.
By touting armored cable's cost savings over traditional pipe-and-wire
construction methods, AFC has persuaded cities and towns nationwide to
rewrite their building codes to allow the use of prewired cable.
While the cost of materials for the two systems is about the same, the cost of installing armored cable is about half that of pipe-and-wire technology.
The traditional method requires electricians first to cut metal pipes and install them throughout the construction site, then to feed wires through the pipes. The entire system then must be tested to ensure the electrical insulation wasn't damaged during installation.
In contrast, prewired armored cable comes pretested, in long reels, so
electricians simply unroll it and bend it into place.
Not surprisingly, steel manufacturers and labor unions prefer the traditional method, which still accounts for about 75 percent of the $1 billion market for protected electrical wiring systems.
But as architects, contractors, and engineers seek ways to reduce their costs, analysts expect armored cable to grow beyond its 25 percent market share.
Within that $230 million market segment, AFC is the leader, with a 45 percent share. Its biggest competitor, with 35 percent of the market, is Allflex, a subsidiary of Louisville, Ky.-based Commonwealth Industries.
Aside from the natural growth that comes from cyclical construction booms, and AFC's aggressive effort to push contractors toward using armored cable, the company has found other ways to grow.
It has developed a number of specialty cable products - fire alarm cables, for example, that are painted red for easier detection - that carry bigger profit margins than armored cable.
Capitalizing on the boom in data transmission, AFC even created an entire division - America Cable Systems - that develops modular wiring systems that allow electrical, telephone, and computer wires to plug into a single box under the floor.
But AFC's success might best be traced to its unique attention to customers' needs.
The company holds regular seminars for contractors, electrical engineers, developers, and electricians to seek their input on future products.
These sessions led to many of the niche products AFC has developed recently.
``It's the reason they're really cutting-edge,'' said Tony Ciampa, head of the electrical department at Abbood Holloran Associates Inc., an engineering consulting firm in Waltham.
``We find we learn a lot more if we disengage our mouths and open our ears,'' explained Jim Dollins, AFC's vice president for product development.
``We're not any smarter than our competitors. We just listen to our customers better,'' he said.
``It's amazing how much more stuff they buy when you give them what they want.''
This story ran on page E01 of the Boston Globe on 07/23/97.
Copyright 19docroot Globe Newspaper Company. |
