Sunday, February 7, 2016

Germans pick Malvern factory site over Texas, Calif.

IFM Electronic employs 50+, will hire 50 more by 2017, claims big boost in orders

Germans pick Malvern factory site over Texas, Calif.


(Updated with CEO comment) Malvern's Great Valley Corporate Center near the US 202/PA 29 crossroads beat locations in Texas and California to win a new factory and lab complex for Germany's privately-owned industrial-sensor and controls maker IFM Electronic (short for "Engineering Community for Measurement Technique"), says chief executive Roger Varma.

IFM officially opens its new Malvern plant today, with Varma cutting the ribbon, joined by US Rep Jim Gerlach, R-PA. 

"We make 8 million sensors a year," mostly at plants near the company's headquarters in the industrial city of Essen, Varma told me. So "we decided to decentralize. This year we opened plants in Singapore, Poland and Malvern." Using capital-intensive "lean manufacturing," he added, "you can locate closer to your customers," without worrying much about variations in local labor costs.

What recession? "We've seen very robust growth in the last 30 months," Varma said. US clients include automakers Ford, GM and Chrysler; Mercedes' and BMW's Southern US plants; industrial brewers Anheuser-Busch and Miller; food processors like Camden-based Campbell Soup, Kraft, Nestle. Princeton-based Tyco is a supplier. "There are a lot of German machine builders in the U.S.," Kraft added. "The US manufacturing economy is still very robust. People forget we still know how to make things." 

Why Malvern? The $700 million+/yearly worldwide-sales company has based its $100 million North American sales group in nearby Exton since 1985, but ran a nationwide search for the factory site. 
"We made a big analysis that included proximity to engineering schools," shipping, "quality of living," and skilled labor force, Varma told me. "The Philadelphia suburban area was one of the top three areas."  The others included Texas -- "not a major" cost advantage -- and California -- which, on the West Coast, was distant from customers.

What helped clinch the deal was "the new Turnpike exit and the 202 expansion," easing commutes for Reading and Philadelphia workers. IFM hopes to qualify for state training grants and tax incentives, but, financially, "the biggest incentive was the facility," Varma said. Liberty Property Trust (hurting for tenants like other suburban landlords in many markets) agreed to a "brand new fit-up" and an attractive 10-year lease for the 36,000-sq-ft facility. 

Varma said he's had "no problem" filling day and evening shifts."We started recruiting with Drexel, that's a really good school for engineering; also Villanova, Penn State, and we're looking at Lehigh; also tech schools for mechanical and electrical assistance."

The company's IFM Prover USA Inc. group operates the 50-employee facility at 420 Lapp Road, Great Valley Corporate Center. The site includes "a product development team, a production facility and multiple labs," says IFM's Lizanne Dathe. "The company plans to double in size over the next five years."

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PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

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