Many industrial companies in North America have looked on almost helplessly as firms from overseas with minimal labor costs have slowly but steadily eroded their share of the marketplace.
But Aar-Kel Moulds Ltd., an Ontario-based mold and die maker primarily for North American tier one automotive suppliers, is not one of those companies. In recent years, Aar-Kel Moulds Ltd. has launched a high-tech testing arm called Otron Tech, lowered its labor costs, and forged significant ties with the newer Asian-owned transplants in North America.
Recently, the company unveiled its latest patented technological advance, a design to manufacture an automobile engine block that is more compact by focusing on strength only where it is needed for improved cycle time. The smaller tool that is needed to mold the cast engine block will save on capital, space and time for automobile manufacturers.
Kevin Van Damme, Aar-Kel’s Business Development Manager for die cast, said that customers are willing to pay more for the advanced technology, which is what keeps North American companies like Aar-Kel in business.
“If we sat back on our hands, what would happen? Low-cost countries would take over, so we have to find practical ways to compete with these low-labor cost countries,” Van Damme said. “How we do that is by using and enhancing the technology and by speeding up the process while maintaining the expected quality.”
Van Damme said that much of the recent focus at Aar-Kel has been on the use of automated software in designing along with Delcam’s PowerMILL machining solution, to attract and hold onto customers with technology that’s specific to their needs. “If you look at what you see worldwide, our competitors have the same cost of machinery, similar cost for materials, only leaving labor and processing as the variables,” he said. Aar-Kel concentrates on the tool design segment of the process to substantially reduce the amount of required manufacturing labor.
The company was founded in 1977 by two local entrepreneurs with one having had a background in tooling sales and the other experience in tooling management The original business focus was on building plastic injection molds for domestic OEM automotive customers. The mettle of Aar-Kel Moulds Ltd. was proven over the cyclical history of the automotive industry. When faced with a dwindling plastic tooling market in the early 1980’s, management had the foresight to shift the company’s emphasis to die cast tooling. “They did some strategic planning and they grew the company during those years,” Van Damme said. “They took on work at competitive prices, and that allowed them to keep the company in business.”
Today Aar-Kel has created a flexible manufacturing environment that is capable of processing die cast dies as well as a diversified base of plastic molds.
During the 1990s, to keep pace with customer demands, Aar-Kel built a second, state-of-the-art, 45,000-square-foot manufacturing facility in its hometown of Wallaceburg, Ontario. Also in the 1990s, the company opened a 15,000-square-foot plant, NATCO, in Monterrey, Mexico, with the goal of servicing tooling for Aar-Kel customers that were expanding to that market during the initial days of the North American Free Trade Agreement (NAFTA). “In those days, people didn’t have the skill set in Mexico, so we had people from Mexico train at our facility and then go back to Mexico and run the company,” Van Damme explained.
Today, the Monterrey facility successfully employs about 30 native Hispanic trades’ people.The third expansion, also in the 90s, was Otron Tech with presses ranging from 300T to 1000T. Otron Tech conducts advanced trials on all newly constructed molds for exterior body panels, interior trim, under the hood components, HVAC and two shot co-inject moulds for various tier one and tier two customers.
ARRK Corporation, a publicly traded industrial tooling and prototype powerhouse headquartered in Osaka, Japan, consisting of 180 companies worldwide, acquired the majority interest in Aar-Kel Enterprises in 2003. Since that time, ARRK Corporation has supported additional investment in equipment for Aar-Kel as well expansion of the Otron location, facilitating the development of new, non-automotive products with customers in the carpeting and home improvement industry.
Van Damme said the sale to ARRK Corporation was a turning point for the company, because it gave Aar-Kel Moulds Ltd. the connections and resources to work more closely with the expanding Asian-based tier one “new domestic” automotive suppliers that have been migrating to North America over the last 15 years. Today, Aar-Kel Enterprises employs approximately 250 people, the majority, of which are located at the main plants in Wallaceburg, Ontario.
“We’re giving the customer an alternative” Van Damme said. “By utilizing our Global ARRK Resources, a customer can work through our local presence and develop a comprehensive program of product design and development, as well as the construction of all production tooling that best meets its’ needs for the highest technology at the lowest price.
Van Damme said that geography is very important to the future of Aar-Kel Moulds Ltd.. Without disclosing specifics, he explained that the company is studying how to grow operations closer to what is becoming its expanding source of business, those “domestic“ and “new domestic” automotive suppliers, which are largely based in the south and south-central United States.
For a company that continues to focus largely on the automotive sector, there is a great deal of optimism at Aar-Kel Moulds Ltd. “The market is really growing,” Van Damme said, “and we are committed to continue adapting in that marketplace, and to grow with it.”