Specialty Equipment Maker Transitions to Modern Machine Shop By Purchasing CNC Equipment Partially Funded by Government Grant; Production Costs Dropped and Competitive Position Improved
Problem/Challenge
A small manufacturer (20 full-time employees) of equipment for the food and beverage industry in the York region of Ontario, Canada wanted to increase export sales to the U.S. It has previously used only traditional metalworking machinery in its production process. However, the competitive marketplace in which it operates required that it bring in new equipment that manufactures parts faster and with greater precision. It decided to purchase its first CNC machine. However, the equipment was too expensive for its limited budget. In search of additional financing options, the company contacted the Fair Grant Writing team.
Solution
Fair Grant Writing (FGW) identified an available government funding opportunity that would enable it to purchase a Dahlih MCV-1200 CNC machining center. The FGW team spent just a couple of hours with client’s senior management, discussing the company’s needs and objectives. It did all the detailed work in completing the grant application in a very timely manner.
“At the time, we didn’t think we were eligible for grant funding. But FGW showed us the way,” said company’s founder and president. “They identified several available grants and loans that we could qualify for, and helped us to understand the programs’ details and requirements “
Outcome
“The government funding allowed us to purchase the CNC machining center that reduced our parts manufacturing costs by an average of 10%,” said company’s president. “When we prepared quotes for our potential customers, we took this saving into account. Because price is a very important factor in our customers’ decision-making, we firmly believe that the funding helped us to become more competitive and increase our closing ratio.”
He said that the installation of the new machining center resulted in business expansion that exceeded their expectations. He reported that sales to the US market increased to $2.5 million for the first 11 months of 2013, up 25% from the same period a year earlier. Sales to other regions, including Mexico and the Caribbean, amounted to nearly $850,000, compared to $600,000 from a year earlier.
The client also reported that while the company had planned for “aggressive growth“ of 20%, actual sales growth exceeded 45%, and most of this growth came from foreign markets. In addition to the more efficient production process made possible by the new equipment, “a combination of marketing campaigns, trade shows and strong follow-up allowed us to achieve these outstanding results.”
“All told, Fair Grant Writing helped us tremendously in transitioning to a more competitive modern operation. They were great to have working with us,” he concluded.
