The Brevard Technical Journal

Bucking the Trend
Renco's strategic decisions at tactical moments have poised the company for growth in a sluggish economy

by Anne Straub
Brevard Technical Journal

Next time you hold a jar of Ragu Spaghetti Sauce in your hand, you might not think of Renco Electronics. But the Rockledge company played a part in getting the product to you.

You also might have Renco to thank when you enjoy a theme park ride in Orlando, order cappuccino in a restaurant, pump your gasoline and listen to the audio in your home theater.

Other manufacturers make an easily recognizable consumer product they can reference to explain what they do. With companies like Renco, you have to work a little harder.

The company makes transformers and coils used in a variety of products. In an electronics world that puts highest value on semiconductors, Renco President Edward Rensing admits his company's wares are at the bottom of the food chain. Still, you might use its products many times in a day and never know it.

Recent customers have put Renco products in industrial cappuccino machines, gasoline pumps and high-end audio equipment for home theaters. In the case of the spaghetti sauce, Renco transformers go into the mass flow meters that food and beverage makers use to measure ingredients for a variety of products. So you can also thank Renco for your M&Ms and Dove Bars, other clients of Micro Motion, which makes the mass flow meters with Renco transformers.

Renco even has a choke coil in the tertiary battery backup system for the international space station. That was not a high-volume order, Rensing said with a laugh.

The company's roots stretch back to 1955, when Rensing's father started the business making coils for radios and televisions. The younger Rensing, who took over as president in 1997, decided to move the business out of Long Island, N.Y., because of the area's high operating costs. Brevard County was attractive because of its low cost of living and skilled labor pool.

The timing of the move proved fortuitous. The '99-'00 year was the best in the company's history, and sales have declined since as the economy slowed. Cutting costs put Renco in position to remain profitable despite the downturn. "We came out smelling like a rose," Rensing said.

The slowdown has caused some tightening, however: Renco now employs about 110 people, down from 170 in 1999.

Rensing has a history of making strategic decisions at critical times. Five years ago, he steered the company toward focusing on industrial products despite the obvious telecommunications boom. "You couldn't make a mistake" in that industry, Rensing recalled. The company's marketing department even questioned why Renco wasn't throwing more of its efforts into telecommunications.

"I always thought to myself that we should never be at one with any particular market, but keep diversified," Rensing said. The telecom bubble burst, and Renco was ready: "We ended up with 10 transformer product lines for industrial products," Rensing said.

Now Renco is marketing one of its newest products, which the company bills as the world's lowest-profile power inductor. The product is aimed at the telecom market, to be used in cell phones, personal digital assistants and pagers. At 0.9 millimeter, it's smaller than the current lowest profile inductor which measures 1 mm. At the same time, it offers 35 percent more current capability, he said.

"Again, it's bucking the trend. While the telecommunications market has tanked, we're launching this product," Rensing said, adding he's confident the market will turn around.

Despite the industry's struggles, telecommunications remains the company's biggest market, followed by industrial controls, medical electronics and consumer-related electronics. A very small amount - less than 5 percent - is government work, primarily in the aerospace and military areas.

Many products made at the Rockledge plant also are manufactured at a mainland China factory Renco partially owns. Renco started the venture five years ago to mirror domestic production so that it offers a layer of protection against quality, delivery or other potential problems at one of its facilities.

Micro Motion uses Renco for almost all of its transformers and inductors and has bought from the company for more than a decade. Renco offers delivery, quality and price advantages, said Mac Hayat, commodity specialist for the company.

The company goes out of its way to help customer TRC in Clearwater, said senior buyer Buddy Baker. TRC uses Renco transformers in the power generators the company makes for the military. Renco will send an engineer to Clearwater or get technical on the phone to address a problem. "They're very good like that," Baker said.

Rensing believes attention to detail and instilling a sense of urgency among workers results in being able to offer high quality with quick turnaround. "We're a Florida company with a New York attitude," he said.

He showed a measure of initiative himself when he was getting started. While in high school, Rensing worked part time in the family business and recalls one day when an engineering call came in and no one was available to take it. He told the receptionist he'd give it a shot.

He talked with the potential customer and offered to make a sample of the requested product. He handled the project from there, including rushing from high school to the factory for a customer meeting. The customer, who turned out to be IBM, ended up placing a $300,000-plus order, the largest purchase order in Renco's history to that point.

The company emphasizes its willingness to deal with small volume orders as well and features a factory within a factory arrangement on the manufacturing floor to specialize in small orders.

Rensing projects 2003 to show at least a 10 percent improvement over 2002. "When the telecommunications market comes back, we're going to rocket," Rensing said.

For more information, see www.rencousa.com.