|The Little Company That Could
Companies worldwide rely on a Calgary engineer's innovations
From the Calgary Herald - Technology & You
By Monica Andreeff
Chrysler's a customer. So is Nike.
And the critical link that holds the ammunition system together for the U.S. military's 40-millimetre mortars was designed and manufactured by Calgary-based Omni-Lite Industries.
Using lightweight but incredibly strong composite metals, Omni-Lite (www.eyedeas.com/omni) has found a high-tech niche in the automotive, defence and sport and recreation worlds.
"Here's the little company that could," says David Grant, president. "Like the steam engine."
Omni-Lite manufactures more than 65 products-- including rims for bicycle wheels, lightweight axles and chassis for inline skates, and logging spikes-- and its handiwork is in use in 140 countries around the world.
The company's first big breakthrough in the public eye came with ultra-light ceramic running spikes that boast the strength of steel but are one-third the weight.
Gold-coloured Nike shoes with Omni-Lite spikes were used by American sprinter Michael Johnson when he won the 200- and 400-metre races at the 1996 Atlantic summer Olympics.
The spikes are now used in 90 per cent of all track shoes on the market, including Reebok and Adidas products.
Omni-Lite also manufactures a special valve-- measurements are as precise as one-third the thickness of a human hair-- that controls movement of the fluid in Chrysler passenger cars' transmission systems.
The part is three-quarters of an inch long, and there are four to six of them in virtually every passenger car Chrysler produces.
Omni-Lite also makes components for General Motors' air bags and for Volkswagen.
Omni-Lite's sales to the U.S. military rose by 700 per cent last year, driven by a small part that connects ammunition rounds together for mortar cannons that fire 700 rounds per minute.
A University of Calgary engineering graduate with experience in the aerospace industry, Grant had spent a dozen years flying around the world gathering information about the earth's surface through remote sensing technology.
Through this industry, he became more familiar with composites-- metals that are blended to maximize strength and minimize weight.
"I had the feeling these super-lightweight metals might have some use commercially," says Grant.
"Manufactured composites exploit the strengths of both (metals) and hopefully the weakness of neither."
Grant started the company in his Calgary home in 1992 with $1,500.
Winning a grant from the National Research Council to pursue preliminary research, Omni-Lite's first product was a golf shoe spike.
Grant then raised $700,000 in private funds through 50 Albertan investors and never looked back.
"They stayed with us and never asked a question about the future of the company," recalls Grant. "I think the average person made eight to 10 times their money back on the dollar."
Omni-Lite eventually moved production to California in 1994, where the firm found more businesses familiar with lightweight metal composites.
The company maintains a Calgary office, and went public on the Alberta Stock Exchange (ASE:OML) in 1997. Its products are fabricated under intense, cold-forming pressure-- 150,000 pounds per square inch-- and when the manufacturing process is complete, the composite is virtually impossible to cut or drill.
"It's almost as hard as diamonds," says Grant. "But it's extremely hard to work with as a result of that."
The computerized machine that handles this ultra-strong composite costs $450,000 and last year Omni-Lite acquired seven more of them to bring its total to 10. The factory in Cerritos, Calif., tripled in size and pumps out up to 500,000 parts a day-- two units per second.
"The parts are made so quickly and precisely that no human being could (perform at that speed)," Grant adds.
One operator can run three or four machines, all of which communicate with a central computer that collects statistics and measures manufacturing performance. If there's a problem, the whole system can be shut down within a third of a second.
After posting 130-per-cent growth in 1997-98 and gross sales of $2.8 million, the Omni-Lite balance sheet appears strong. Gross revenues in 1999 are forecast to reach $4.5 million, with an excellent net profit of $2 million and virtually no long-term debt.
The new machines should be paid for by the end of August. "It's probably one of the most profitable companies in Canada," says Grant. "But we don't say that."
Half of the sales are to Canada and the U.S., and the rest are exported to Taiwan, Korea and Indonesia, among others. There's a warehouse in Sundre and an international sales office in Barbados.
Omni-Lite's 11 staff members work 12 hours a day, six days a week, motivated by a generous stock option program that has been criticized for being too generous.
Grant counters, with an engineer's precision, by offering a few statistics.
The annual output per employee at the Omni-Lite factories, where there's a high level of computer-controlled fabrication techniques, is $800,000-- six and a half times the national average.
"We make them owners of the company," he says. "Our feeling is that
if you give most people an opportunity to do well, people will rise to
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