July 26, 2016 Powerful Connections

Volume 7 | Issue 4

Homac is on the cusp of bigger opportunities. This manufacturer of electrical connectors gets aggressive in R&D. April Terreri reports.

From our vantage point today we can look back in time and marvel that some people living at the turn of that century did so without electricity. The electricity distribution infrastructure has since gone through numerous updates, as Homac knows well. In particular, notes Mark McGrane, president of the Ormond Beach, Fla.,-based company, “As interest in underground electrical distribution grew, there were some initial connector problems electric utility companies were grappling with during the mid 1960s.”

After World War II, copper became too expensive for these kinds of underground installations. So the choice was aluminum. “It was really a matter of economics because miles of cable were needed to serve the growing suburban market,” McGrane says. But aluminum has some very troublesome inherent characteristics because when aluminum is exposed to air and moisture, the oxidation causes a white powder to form, which inhibits the flow of electricity. So, aluminum connectors must be designed differently from copper connectors because of aluminum’s lower conductivity rate.

“My father, Gene McGrane, developed some unique cost-effective solutions to keep the aluminum connectors dry,” McGrane says, adding the connectors were also easy to install. He adds that oxides form almost immediately after cables are manufactured, so Homac manufactures its connectors with an oxide inhibitor that prevents oxides from reforming.
An important mandate imposed on the industry came in the 1960s, when the REA (Rural Electrification Administration) required secondary connectors to be “dead front,” meaning they were insulated to protect someone from being electrocuted if they accidentally came in contact with the connectors.

Serving primarily the electric utility industry, Homac manufactures products for construction and industrial application, and also supplies to the utility substation market and secondary low-voltage distribution markets. Homac supplies OEM and private label customers as well, selling Homac-manufactured connectors to other connector manufacturers or electrical equipment manufacturers who use the connectors in their own products.

Innovation Generation
The product that brought industry recognition to Homac was Gene McGrane’s invention: the hub connector. “It was a six-sided block of aluminum he patented which could be used at a pedestal (or above grade) box or at a junction (at grade) box,” says McGrane. “What was unique about my father’s invention was it could use a standard industry connector to connect up with this product. There was nothing like it at all on the market because, at that time, most of the connector manufacturers were comfortable with modifying an overhead connector to use in these underground applications.” This product was the first in the industry designed specifically for underground residential distribution (URD), which today remains the bulk of Homac’s business.

Homac pioneered the use of EPDM rubber in insulating and waterproofing underground cable connectors, says McGrane. Underground distribution cables need to be terminated or joined. “The industry used to use a waterproofing method where they would apply a putty-type compound for sealing joints, and then they’d use electrical tape to hold it together, and the process was very time-intensive,” McGrane explains. Or they would use methods like heat shrinking, which required using a torch, which could be dangerous around the other utilities sharing a distribution trench.

“What we were able to do was design a connector that used an interference-fit rubber which has stretch and memory. This allows you to stretch the rubber onto a cable or onto a connector, thereby making a waterproof connection. So what this EPDM rubber allows you to do is, because of its stretch and memory characteristics, you can keep the tension on the connector and the cable so it maintains its waterproof integrity indefinitely.”

“Because many of the products used in the industry today have become commodities, we focus more on producing technologically advanced products, adding value where we can, to help find solutions for our customers,” says McGrane. “Quality is a given these days, as is quick delivery – so we have to be a competitive supplier and if we can design products that offer solutions, we can get a premium for our products and continue to command a brand preference.”

Another change in the way rubber is compounded comes about through the technology of injection rubber operations. “We can now manufacture the materials we use to produce rubber in a much more cost-effective way, and that means by taking some of the art out of mixing rubber,” McGrane says. The company used to have a person on staff whose job it was to “tinker with the formula all the time to make sure that every batch we got was good enough to use,” McGrane says. “Injection-type rubber production allows us to set a spec and stick with it so the consistency of the formula is maintained and the manufacturability is greater. So, just by the nature of the process we get very little scrap and the scrap we do generate can be reground and used again, which is an environmental plus.”

In another pioneering move, Homac developed impact extrusion technology for manufacturing copper and aluminum connectors. “Instead of drilling a hole in a cut rod of aluminum, we impacted the hole. This process provides a cost advantage and eliminates the turnings required in drilling,” says McGrane. “We can now achieve manufacturing rates that are 150 percent faster and with more consistent results.” New cold-forming equipment helps in this process and modern and quick-change tooling produces high-quality connectors in far less time, McGrane says.

Global Infrastructures
Homac is on the cusp of change as it considers numerous options that can take the company in new directions for future growth. McGrane acknowledges the opportunities as well as the significant challenges the company faces – especially regarding foreign competition. “We identified this at one of our strategy meetings as something that is not going to go away. Our industry has been somewhat insulated from low-cost competition, but we realize it’s coming and if we are not proactive about it now, our business will suffer,” McGrane says.

The company is considering a number of possibilities, including sourcing some raw materials from an offshore, low-cost producer. “We would have to realize about a 50-percent price reduction for our raw materials – or even finished products – in order to adequately impact our bottom line,” McGrane says.

Other possibilities Homac is considering include new, developing international markets that are expanding and upgrading electrical infrastructures. The company is also considering how to take advantage of e-commerce opportunities. “We want to develop our e-business capabilities to make it easier for our customers so they can seamlessly access product information, pricing, availability, and even generate automatic purchase orders,” McGrane says.

R&D is a real keystone for the company’s continued advancement, McGrane adds. “We are expanding our R&D capabilities in support of our strategic focus on new product development. We will be looking at a number of variables including a possible expansion of our current R&D facilities as well as investments in additional resources. We are serious about developing technological advances and innovative, new products that are easy to install – as well as helping our customers solve problems. This means we will have to make more R&D investments to fuel our future success,” McGrane says.

Recognizing Homac is at the brink of something bigger and greater, McGrane says the company plans to differentiate itself from competitors “so we are not just a third source that our customers try to bid down. We plan to continually launch new and innovative products through more aggressive R&D, marketing and product development.”

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