Rex Rozario, Part 2: The Beat Goes on: New Developments at Exeter, the Music Scene, and China

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Matties: I’d like to come back to the Chinese market a little later. Now, tied to your strategy though, you also made an acquisition in the U.S. I believe.

Rozario: Yes, Graphic acquired Calflex, who for 35 years has specialized in flex and rigid-flex. We are now putting rigid-flex in there. Again, they are fully ITAR approved and so forth. It's a long standing company.

Matties: Is that wholly owned by Graphic?

Rozario: That's fully owned by Graphic. The Hallmark side is fully owned by Somacis. For DSG it’s a 50%, owned JV with Somacis.

Matties: What was the strategy with Calflex? Was it to have a flex shop in the U.S.? Was it to be a feeder shop for DSG? Tell us a little bit about your thinking.

Rozario: I think the initial idea was for it to be a gateway to the U.S., because you have to be there and you must have ITAR and everything else to be qualified to do the job. The plans were that we could develop it into a real-time rigid-flex shop because we have the experience, we can get the yields, the technology and there's a huge market base there. And because we have 48 years’ experience, with that type of product it's what you know and the experience you've got if you want to capitalize on it and make a profit; otherwise it's quite difficult. The boards are getting very complex and we do 50-layer boards here. Not every day, the occasional one comes in, but we can do any number of layers the customer wants and maintain it. Of course even with inspection and whatever else, we're always the first. We have an IST tester and were one of the first to get it.

The guy who designed it is an ex-Graphic employee who is based in Canada now, and that's very expensive equipment. We have always been in developing and looking at what can be done for the future.

Matties: Does that come from your personal drive? Is that your natural curiosity that drives you?

Rozario: I won’t take all the glory here. We have a team. Everyone joined in and we all worked together.

rex_multistation.jpgMatties: I understand you have a team, but there's also leadership and a vision.

Rozario: I try to be visionary and look where to go next, and like with China I remember our technical people saying, "Why do you want to go there? Why don't you spend the money here? We can expand and so forth." Of course you can see the benefit from being in there. There's a huge marketplace and many things you can do there. Anywhere around the world if you start a business, to grow it takes time. In DSG we are going from zero in the worst recession, to over $50 million in China. Not many people start from zero and go up that quickly. That's available in China, because the facilities are there and there's a focus on people looking for good Chinese supplies. Imagine then, that almost 80% of what we manufacture is China to China.

Our export is limited to about 20% of what we manufacture there. From that point, we are not building cheap product and flooding the world. It's used in China.

Matties: You're really serving the Chinese market.

Rozario: We’ve got a captive Chinese market. Then again, when you look at it, even the world’s companies come to China. We are now the sole supplier or the only approved supplier for some of these large companies from the U.S. or UK.

We've been around for a long time, and I think there’s business trust and confidence in the people who approach you. As I was saying, when I first started in Devon I had to do everything, get the machinery in, get a team together, technology, go out and talk to customers, gain their confidence and be someone who knows the product. In those days the larger companies were very particular. They didn't want change and they gave you a hard time to get in to be a supplier. It wasn't easy. I know I'm going back a bit in life and many launches ago, but we eventually got a foothold. Then that's it. Then they see the product and they get it. We worked very hard, but some of our suppliers, like BAE, we've been with for 48 years—since we started. They were one of our very first customers.

Matties: You received at one point their Supplier of the Year award, among all of their suppliers.

Rozario: In ‘95 I think we were the supplier of the year in the UK, but the gold award we got last month is from BAE. Now we are into gold and that takes a long while, because customers don’t easily issue awards to people; obviously it's got to be proven that they can come up with the goods. But coming back to the future again, we're still wondering where we go from here.

Matties: That's what I'm wondering.

Coming next: Rex Rozario, Part 3: The Future Beckons



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