NEWs

Year: 2018

Global Atlanta: Latest East West Buys North Carolina Factory

Atlanta-based East West Manufacturing has purchased a North Carolina factory in what it hopes will be the beginning of a string of acquisitions to beef up its domestic presence. 

The company has built its reputation as a contract manufacturer sourcing products and components from a diverse array of Asian contract suppliers as well as from some of its own factories in China, Vietnam and India

The idea has never been to outsource jobs but to help domestic companies stay competitive by lowering the cost of inputs.

Buying Team Manufacturing, an electronic parts producer near Raleigh, is a chance to be involved earlier in that process, helping “incubate” overall products in partnership with larger domestic customers instead of just supplying components on the back end, said Scott Ellyson, East West’s CEO.

“At that early stage of development, speed to market is typically more important than cost. We’ve always felt that we’re really good at cost and quality, but we’re not as good at speed to market” being across the world in Asia, Mr. Ellyson told Global Atlanta. 

Growing a domestic factory base will change that, giving East West the ability to “offer our customers domestic, higher mix, lower volume, quick turn electronic manufacturing services,” Mr. Ellyson said in a news release. 

He added in the Global Atlanta interview that the newly acquired companies would now have access to East West’s global supply chains. 

“We think we can help these domestic manufacturers be more competitive out of the gate,” he said. 

When the scale and lead time for the product does get to a point where Asia makes more sense, East West can provide a seamless transition, rather than touching off a disruptive process of finding a new, unrelated supplier across the world. 

Mr. Ellyson concedes that expanding from Asia into the U.S. isn’t the typical trajectory of an American-owned company. 

“We’re kind of going in the opposite direction,” he said. 

But it’s the next logical step for East West in a world growing more globally integrated despite the rising tide of protectionism. 

Mr. Ellyson said the U.S. strategy was in place before the outbreak of President Trump’s recent trade war, which has precipitated a wave of tariffs on Chinese parts and products (incidentally helping his Vietnam factory.) 

“This was well in play before the tariffs and the tariffs probably only reinforced it,” he said. 

He’s skeptical that temporary tax increases will set off meaningful factory relocations — the economics keeping them in place are just too strong to shift based on the whims of one elected politician. Besides, many companies can skirt tariffs by shipping kits or components to third countries — or blunt their impact by simply passing the price increases on to the final consumer. 

“I think capitalism is always going to be smarter than politics,” he said. 

The rationale for East West’s U.S. expansion is more about being a larger part of the overall value creation process. Now backed by private, family investment office Heritage Growth Partners LLC, East West looks to acquire more factories in what Mr. Ellyson calls “NFL cities” across the country. 

“I’d love to own five plants across the U.S. that are high-tech companies incubating products, particularly in the area of robotics and connected devices,” he said. 

Sourcing these devices at the right cost will be essential to ensuring their adoption and viability, he said. 

“There is a lot of technology today that we want — products that make the world a better place — and these are products that in order to get traction need global supply chains so the cost justification makes sense. What you do is pick the area that’s best suited for your product given your product profile.”

East West can still hire multiple Vietnam factory workers for the cost of solely providing health care to one American. And his factory in Ho Chi Minh City has been a runaway success, bolstering the headquarters here in Atlanta. 

“We make motors in Vietnam that get sold in China that East West in Atlanta makes money off of,” he said, noting that he also supplies other multinationals making parts in Vietnam, including keyless entry systems for locally produced motorbikes.  

The terms of the Team acquisition were not disclosed. 

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East West Manufacturing Completes Add-On Acquisition of North Carolina-based Team Manufacturing

ATLANTA (PRWEB) SEPTEMBER 24, 2018

East West Manufacturing, LLC (“East West” or the “Company”), a global design, manufacturing and distribution business, announced today that is has acquired Team Manufacturing (“Team”), a provider of specialized electronics manufacturing, wire harness assembly and box-build services. Team was founded in 2002 and is located near the Research Triangle in North Carolina. The acquisition of Team represents a significant opportunity to enhance the growth of East West and advance the Company’s strategic focus on growing its electronics capabilities and establishing U.S. manufacturing operations.

“We found the perfect partner with Team to expand our manufacturing presence into the US.” said Scott Ellyson, East West Co-founder and CEO. “Team has a great reputation for serving its customers. This acquisition allows us to offer our customers domestic, higher mix, lower volume, quick turn electronic manufacturing services. Best of all, our collective design, manufacturing and supply chain capabilities will enable us to provide even higher levels of service and support to customers on a global basis.”

East West Board member Bob Nardelli said, “This acquisition aligns perfectly with our strategy of building our portfolio by incorporating companies offering innovative solutions to their customers.”

Alex Mammen, Heritage Growth Partners Founder and East West Board member added, “The acquisition of Team provides East West with the ability to marry its high volume international design, manufacturing and distribution capabilities with a well-respected, domestic manufacturer to address the full spectrum of customer needs. We expect the East West-Team combination to gain significant market share through these expanded capabilities.”

Don Albright, Founder and CEO of Team said, “My brother Dean, the leadership team, and all the associates here at Team, and I, are thrilled to join the East West family. Our capabilities, culture and customer first focus align perfectly. We are going to do great things together!”

About East West Manufacturing, LLC

East West is a leading Atlanta-based design services and global manufacturing partner for original equipment manufacturers and distributors throughout the United States and Europe. With operations in Vietnam, China and India, the Company utilizes a transparent supply chain, on-site quality control and logistics systems to provide its customers with superior products and competitive cost advantages. Founded in 2001, East West’s U.S.-based management combined with its international capabilities reduces the risks and complexities of global manufacturing for its customers. For more information please visit: http://www.ewmfg.com.

About Team Manufacturing, Inc.

Founded in 2002, Team provides a wide variety of manufacturing, assembly, testing and rework services related to wire and cable interconnects and harnesses, electromechanical assemblies, PCBA’s, box builds and product integration. Team is an ISO 9001:2015 Certified EMS provider and is based in Youngsville, NC. For more information visit: http://www.teammanufacturing.com.

About Heritage Growth Partners LLC

Heritage Growth Partners LLC is an Atlanta-based private, family investment office focused on serving owner-managers and their companies to accelerate growth and create long-term value. Heritage takes a collaborative approach to investing, with the goal of building true partnerships with management that are enhanced by its patient and flexible family capital and its ongoing strategic, financial and operational support. For more information visit: http://www.heritagegrowth.com.

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