July 26, 2016 Magnetic Attraction

Volume 11 | Issue 2

Magnetic Technologies Corporation has enjoyed substantial growth by garnering customers in specialized, niche markets. The Virginia headquartered company comfortably shifts from latest technologies to far older applications and designs. Dan Harvey relates a success story that commingles the past, present and future.

In moving forward, Magnetic Technologies Corporation keeps one eye firmly fixed on the past.
“We’ve oriented ourselves very well toward the specialty markets, demonstrating technical strengths that not a lot of people know how to do anymore,” says President Tom Hough, whose company provides high-quality, precision-engineered transformers.

Transformers, he reminds, have been around for more than 100years. “It’s based on very old technology, and it has always been basically the same thing: a coil wire around a piece of iron.”

It’s also very heavy technology. “That’s another reason why many people no longer want to do it,” says Hough. “Electrical engineers don’t even like to do transformers anymore. They all want computers.”

As such, the Wytheville, Va.-based organization focuses on replacement markets, unique applications, and the one-of-a-kind, built-to-order products. “We’re very much a niche player,” says Hough. “You have to be, when you’re a small company. We produce a lot of specialized transformers for specialty markets.

Established in 1985 to provide transformers to the coal mining industry, Magnetic Technologies now manufactures and rewinds special application, multiple winding dry type power transformers and magnetics (in sizes up to 7500 KVA 150 KVBil). Besides transformers, offerings include air core current limiting reactors, iron-core gapped and saturable core reactors, inductors for all applications, and interphase transformers and reactors. Moreover, the company will duplicate older, outdated transformers and magnetics. All products are designed and built to suit customers’ specific applications and situations. “We do everything from transformers for the U.S. Navy to traction-power transformers for transit systems,” says Hough.

MAKING THE OLD NEW AGAIN
A good example of the company’s specialization is its military specification transformers, a line of small transformers (1kva to 25kva, single-phase 600-volt class) that go onboard submarines or aircraft carriers. “The Navy wants them built to designs that were designed in the 1940s by Westinghouse,” reports Hough. “It’s a very small and ancient technology, and it is very labor intensive. We’re one of the few companies that still produce that transformer design.”

The company’s uniqueness is also illustrated by its repair services. “Not many people want to repair the old transformers,” says Hough.

Transformer repair often entails stripping down the units and redesigning and remanufacturing them. “We not only do that in-shop, but we do it on-site, too,” says Hough. “Many times, office buildings, hospitals and commercial type operations may have a transformer inside them that has been around for at least 30 years. When it suddenly fails, there’s a big problem. These buildings were constructed around the control room, so you can’t get the failed transformer out or bring a new one in – at least not without knocking down walls or doing something like flying a helicopter up to the 37th floor.”

Magnetic Technologies, he continues, has developed a system where it takes pieces in and disassembles and reassembles the failed transformer without having to remove it. “I’m not aware of anyone else who offers something like that, so it’s another advantage for our customers,” says Hough.

At its newly started up Louisville, Ohio facility, the company also offers liquid fill transformer repair, a service aimed at customers in the utility market and their aging infrastructure. “For some of them, their transformers are pushing 50 to 60 years, so they’ve started looking to programs that involve proactive replacement, as well as rotation and reparation of the transformers,” says Hough, adding that repair can be economical, due to the current high price of materials. “Five years ago, it may have not been so expensive to build a new transformer. Today, people need to use everything they can from an existing transformer, because of material prices, particularly core steel, which has become such a valuable commodity.”

TRANSITIONING TO TRANSITS
As far as newer technology, Magnetic Technologies builds transformers to power transit systems, such as subways, for just about every transit authority in the country. The company even serves some transit authorities outside of the United States. “Transit became another big market for us,” reveals Hough. “When we started out in the industry, we needed to work hard to become accepted. Now, we’re pretty much right on top of it.”

The traction power transformers the company provides are one of the most demanding applications for a dry type transformer. Built to NEMA RI-9 standards, typically with multiple winding designs, the units meet stringent temperature rise and loading requirements, and most jobs require full short circuit testing.

The company also offers drive isolation and exciter power potential transformers, which are specifically designed to handle the harmonic loading. Its engineers have decades of experience in designing rectifier transformers for various applications. Working with major OEMs, the company has successfully installed units that operate in power generating stations and industrial processing plants throughout the world.

COMPANY EXPANSION
Magnetic Technologies now has more than 5,000 units in service across the world. The company’s roots date back to 1985. Its founders were two men that Hough describes as “hands on transformer designers” who originally began working from a basement.

In 1998, the founders’ families sold the business to Hough. “At the time, there were five employees. Now we have around 80 employees, and we have grown a great deal in the subsequent nine years,” recalls Hough.

After the purchase, the company began its current direction. Today, the Magnetic Technologies Corporation has two facilities, one in Wytheville and the other in Louisville, which opened in 2007 to accommodate growth. “The Louisville facility houses our repair operations,” says Hough. “This year, we had to split apart the transformer and repair businesses, because the transformer business had grown substantially, which required the Wytheville facility to become more production based.”

The Wytheville facility is located in the foothills of the Appalachian Mountains on a 20-acre site. It encompasses 82,000 square feet, 70,000 of which is dedicated to manufacturing. “We purchased the Wytheville facility in 2001,” says Hough. “Previously, we occupied a 14,000-square-foot sock factory built around 1910.

The current single-level Wytheville plant has 25-feet-high assembly bays with numerous overhead and gantry cranes. These give the company flexibility in product movement and loading and offloading of any size unit. Manufacturing operations include complete winding capabilities, core cutting and stacking equipment, dual ovens and dipping tanks, and vacuum pressure and vacuumonly impregnation systems, sheet metal and welding equipment , and full-test facilities for all production and design testing (including BIL and partial discharge).

The Wytheville location is at the intersection of interstate highways 77 and 81, enabling the company to easily service the Southeast, Midwest and Northeast sections of the country. The Louisville repair operations are housed in a 100,000-squarefoot facility built around 1960. “It belonged to a transformer repair business that closed down last year,” says Hough. “It includes a 50-foot bay with a 100-ton crane, and it has several other large cranes.”

Magnetic Technologies Corporation’s strategy – and orientation toward the unique and even strange applications – has paid off well. The company has experienced healthy growth since 2000, in the 27.5 percent range each year. In the past two years, it has even climbed as high as the mid-30s. Revenues help tell the story. In 1998, the company garnered sales just below a million dollars. According to Hough, the company is anticipating about $17.5 in 2008. That says a lot for the company’s expansion over the past several years and for its projected growth well into the future.

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