Name: VR Industries Inc.
Owner: Fred Pestana, president and chief executive officer
Business: Electro-mechanical contract manufacturing specialists
Location: Warwick
Employees: 34
1999 Revenue: WND
CHECKING A FATHOMETER is Gary Burton of VR Industries.
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VR Industries Inc. makes circuit boards for products ranging from small, plastic feeding pumps used by hospitals to nourish unconscious patients to the $10,000 fathometers commercial ships use to measure the depth of the sea beneath their keels.
And, seemingly, everything in between.
“Our niche is flexibility,” Executive Vice President George Jenssen said. “We are geared toward the small runs.”
The Warwick company churns out 500 circuit boards for this and 1,000 for that–the kind of small production runs that it wouldn’t make sense for the client to do itself.
“If they only need 300 boards a year, they can’t go out and buy $300,000 worth of equipment to make them,” noted Fred Pestana, President and Chief Executive Officer of the 15-year-old company.
Sometimes VR Industries doesn’t even know what the circuit boards are for. The company gets some classified defense work from Raytheon Co. of Lexington, Mass. The purpose of the circuit boards is information that’s rationed out on a need-to-know basis, and VR Industries doesn’t need to know, Jenssen said.
But VR Industries is more than just a contract manufacturer of circuit boards. Some customers have been satisfied enough with the company’s work to hand off the entire production process to VR Industries, from ordering the parts to making the circuit boards to assembling the products to shipping them.
The first step to landing the entire job, and the additional revenue that goes with it, is making a high-quality circuit board, Jenssen said.
“Once we satisfy them on that,” he added, “they usually say, ‘why don’t you just do the whole thing?’ ”
That’s exactly how the company began turning out enteral feeding pumps in batches of 1,000 for Nutrition Medical Inc. of Minneapolis. The feeding pumps, which are the size and approximate shape of a small jug of laundry detergent, were originally manufactured by Elan Pharma of Smithfield using circuit boards made to order by VR Industries.
After Elan Phar-ma decided to sell the product line to Nutrition Medical, VR Industries convinced the acquiring company that it could build and assemble the entire product.
It’s proving to be a successful formula. VR Industries has about 50 active customers, Jenssen said, and roughly half of the company’s jobs involve additional production responsibilities beyond making the circuit boards.
Jenssen declined to disclose the company’s 1999 revenue, calling the figure misleading, but the national business directory ReferenceUSA estimates VR Industries’ annual sales is somewhere between $5 million and $10 million.
Jenssen will say, however, that the company’s direct labor sales have increased by 10 percent in the last two years.
The size of the company’s plant and its payroll have increased in that time as well. VR Industries expanded into adjacent industrial space in late 1998, which more than doubled the company’s floor space from 17,000 square feet to 35,000 square feet.
Meanwhile, the company’s employee count has doubled from 17 in 1996 to 34 at last count. VR Industries hasn’t had much trouble getting competent employees despite the tight labor market, and the company is working hard to keep workers and increase their productivity by providing training and offering bonuses for attendance and efficient work habits.
The company’s overall work ethic is vouched for by a pair of letters framed and hung neatly in the conference room. One is a 1997 letter from the U.S. Food and Drug Administration notifying VR Industries that it passed the agency’s audit of its medical devices manufacturing process. The other is the company’s ISO 9002 certification, a sought-after seal of approval that signifies VR Industries runs a taut ship.
“Those two certifications are everything in this industry,” Jenssen said.
The company traces its roots back to 1985, when Pestana and partner Joe Oakes bought Vanguard Relay Co. and moved it here from Long Island, N.Y. The partners formed Diversified Technologies in 1987 to do assembly work, and the two companies were joined to form VR Industries in 1990.
Although the VR Industries has been successful making circuit boards for other companies to use in their products and assembling some of those products, this year the electro-mechanical contract manufacturer also hopes to begin making and selling a product of its own. An employee invented an electronic security device, for which the company is seeking a patent.
Jenssen expects to hire a marketing firm to help sell the product beginning later this year. Other proprietary products could follow, none of which would compete with the products of any of the company’s customers, CEO Pestana is quick to point out.
Also in the works for 2000 is opening a satellite sales office in Boston, establishing an Internet site, putting operating data from a new $100,000 computer system to work and launching a major push to add another 20 firms or more to VR Industries’ customer base.
If it all works out as planned, Jenssen wouldn’t be surprised to see VR Industries going to multiple work shifts and looking for another building in a year or two.
