Quality Switch Powers Growth With Exports
NEWTON FALLS, Ohio — Were you to drive by one of those large, gray utility substations off the road, odds are that some of the switches inside that transformer were manufactured at a small, family-owned company here that has big plans.
Quality Switch Inc. is powered, energized and ready to expand its business across the globe as it seeks new markets and opportunities here and abroad, say its principals.
“We saw 10% growth last year compared to 2013, and we’re on pace for 7% to 8% growth this year,” says Jeremy Sewell, vice president and a member of the third generation of the Sewell family involved with the business. The company has witnessed growth on two fronts, in both its domestic and foreign customers, he says.
The public rarely sees the products Quality Switch manufactures – some are buried deep underground or encased in the gray boxes attached to substations. Nevertheless, these components provide the mechanisms that control the supply of electricity.
A faulty component could cause widespread disruption to businesses, neighborhoods or entire cities, Sewell notes, so it’s important that the switches his company makes are the best quality.
“There’s a lot of pressure for a company to turn out good work,” says the president, Larry Dix. Companies that cut corners as they look for the best prices often run the risk of buying a lower-grade product. “You don’t want to save $100 on a switch and then find out your entire transformer isn’t working,” he says.
Quality Switch specializes in manufacturing custom switches for the power industry, that is, switches produced per the customer’s needs. “Ours is not a commodity product,” Dix says. “It’s not like you can go into a store and pick one of these up.”
Considerable detail and engineering goes into each component, Sewell continues.
Precision computer-controlled machining equipment is used to manufacture copper components while many of the backs and bases to these switches are made of laminated compressed paper mixed with an epoxy resin.
“We manufacture tap changers, volt switches and grounding switches – just about any type of switch that goes into a transformer,” he says. “We’re using the highest-quality materials.”
The compressed board is cut according to the customer’s specifications and varies in thickness, Sewell adds. “We buy raw bar stock copper and a lot of insulated materials and fabricate them into components used on the switches,” he explains. “Our niche is small to medium power stations, but we’re moving into large power.”
The move into serving the large-power market will require additional testing capacity at the plant, Sewell says. The company plans to break ground soon on a 50-foot-high testing lab that can accommodate high-voltage lighting impulse equipment.
Such a lab can generate 1.2 million volts of electricity to simulate a lighting strike on the components Quality Switch makes. “We’re trying to manufacture switches to accommodate higher voltage,” Sewell says.
The company was incorporated in 1974 after being a division of Quality Machine, a company Horace Sewell started in 1952, says his son, CEO Russell Sewell.
“In 1956, he started to make switches for Standard Transformer’s Warren plant,” Sewell relates. As the transformer industry changed and engineers who once worked for Standard moved to other companies, the switch business for Quality improved as more referrals and orders came in.
“They started to ask for more designs,” Sewell says. “So he built up a catalog of drawings. The switch business started to pick up.”
Business improved so much that the company decided to incorporate Quality Switch as a separate company in 1974. In 2006, the Brilex Group acquired Quality Machine, leaving the principals to concentrate on the growing switch business.
“Customers kept coming to us and we kept growing,” Sewell says.
Today, Quality Switch is marketing its services well beyond the borders of the United States and has plans to gradually increase its global footprint, especially in Latin America.
“We’ve pushed our export business really strong over the last 15 years,” notes Jeremy Sewell. Last month, the company was awarded the President’s “E” Award, a national distinction the U.S. Department of Commerce presented to 45 companies this year in recognition of the growth in their exports.
“We’ve been exporting for quite a while, but we’ve seen some growth over a period of time,” he says. The “E” award is given to those companies that demonstrate at least four consecutive years of growth in their international business.
About 40% of the company’s clients are outside the United States, and that business continues to grow.
“We now do business in Canada, Mexico, Australia, and South Korea,” Dix reports. Quality Switch is also making inroads in Colombia and exploring opportunities in Brazil.
“We make our livelihood around the fact that we can come in and do something special,” Dix says. “We’re a very technical product.”
As a small company – the business employs 35, including seven engineers – Quality Switch has to be selective as to which foreign markets it can tackle. Mexico was a logical starting point because of its location and companies there that had relationships with U.S. conglomerates such as General Electric or Westinghouse.
Moreover, fewer domestic companies produce transformer components, leaving suppliers such as Quality Switch to venture into new markets, Dix elaborates.
“Mexico has been a good customer for quite a while, and we know there’s more opportunity there,” he says.
Other markets soon opened, Dix adds. A Canadian connection led to new business in Australia while a South Korean company happened to contact Quality Switch after a meeting on international standards, he says.
Now, the focus is to build business in Central and South America, Jeremy Sewell notes. “We went to Brazil this March and we’re trying to open up that market,” he says. “We made some contacts and there’s definitely opportunities.”
Dix says that turning these opportunities into real business doesn’t happen overnight. “It’s an investment. It may take one to two years before we see anything,” he says. “It might be a year before you have an opportunity to quote. And sometimes you don’t get that first quote. But after about two to three years, you really start to see development.”
Pictured: Joe Fox prepares a finished switch for shipment to Canada at Quality Switch Inc.’s plant in Newton Falls.
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