An Alberta R&D Team Strikes It Rich In California - PUL$E OF THE PROVINCE
from Alberta Report 
Apr. 27, 1998

Omni-Lite Industries Canada Inc. has exclusive contracts to design and manufacture products which no one else in the world can make, for clients such as Nike, Chrysler and the U.S. Army. The ASE-listed company's raw materials are space-age composites, its success almost staggering. "We're back ordered for several years and growing at an annual rate of 350%," says David Grant, Onmi-Lite's founder and president. His six-member team, mainly Albertans seconded to California, expects to generate revenue of US$3 million in 1998. Approximately 95% of Omni-Lite's cash flow is poured back into R&D, or into buying fabrication equipment typically worth $400,000 per machine.

Mr. Grant, son of a senior Amoco geologist, sees a parallel between finding profitable applications for composite materials and his earlier pioneering work on the com mercialization of remote sensing technology. Trained at the University of Calgary, the 44-year-old engineer laboured up north with the Arctic Pilot Project and similar ventures developing technology to help tankers traverse ice-choked waters. He later spearheaded the overseas drive of Calgary-based Intera, again innovating with remote sensing.

Omni-Lite, founded as a private company in Calgary, began manufacturing in 1994. An early success: a boron steel cleat for golf shoes which lasts four times longer than the traditional steel cleat. "We found that few people in Calgary, or even in the eastern U.S., spoke our language, Mr. Grant says.

"California, due mainly to its aerospace industry, is a natural location." His plant in Cerritos, near Anaheim, orders its exotic needs from 500 suppliers, many of them also investors attracted by the romance of breakthrough research. Samples of Omni-Lite's triumphs to date include:

- Lightweight ceramic cleats developed for Nike were used to create the famed "gold shoes" used by runner Michael Johnson to shatter the 200-metre record in the 1996 Olympics. Omni-Lite now makes up to 15 million of these parts per year, holding 95% of the track shoe market in 1998.

- Chrysker buys Omni-Lite valves which control the flow of fluid in automatic transmissions, with tolerances equal to one-third the thickness of a human hair in length and diameter.

- The U.S. Army dramatically improved the reliability of its 40-rnillimetre mortars .(which fire 700 rounds per minute) thanks to a precision part supplied by Omni-Lite.

"We're forming joint ventures and strategic alliances with companies like Textron [annual sales: US$12 billion], which uses jointly developed products in rollerblade skates," Mr. Grant comments. These partnerships allow Omni-Lite to match its own design and fabrication skills with mass manufacturing and marketing muscle. Its Alberta-bred chief says the acquisition of a plant in his home province could he in the future.
 

The millionaire technician wanted a cash advance

Onmi-Lite Industries president Dave Grant was taken aback when Mike Walker, a prized technician, asked for a cash advance to buy a new vehicle. After all, Mr. Walker had taken a sizeable chunk of his salary in equity ever since he had hired on with the high-tech fabrication firm in mid-1993. Where was that stock now, Mr. Grant inquired. "In my car," came the reply. In fact, the 25-year-old mechanical engineering graduate from SAIT had more than $1 million worth of shares stashed in his back seat. "I just didn't want to sell any because their value keeps going up so fast," Mr. Walker recalls. Omni-Lite, originally listed on the Alberta Stock Exchange as a junior capital pool, has moved from 45 cents to about $2.50 per share since November 1996 (including the effect of a consolidation). The company's coffers are rumoured to be cash-rich, and the secrecy surrounding the mark-ups on its patented products is tight.

Mr. Walker credits his good fortune to a sound upbringing and an all-round education. The son of a cow-calf operator near Sundre, he grew up doing tasks like fixing tractors in the bush. "The idea of spending my life in an office, stuck with engineering design on a computer, did not attract me. 1 really wanted hands-on work with some brains to it, so 1 took the two-year technology program at SAIT. "He was the only person who responded to an Omni-Lite ad posted on a student bulletin board, asking for help in developing a new golf divot. "What Omni-Lite basically does is take a round wire and use extreme pressure and sometimes heat to force it into different shapes," Mr. Walker says, "Thanks to SAIT, I can work out how to make a design in theory and then fabricate the piece myself at the bench. It's worked out great."

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