Direct Coil’s incredibly rapid growth and international success demonstrates how entrepreneurship, coupled with specialized industry expertise, can result in a massive, international-scale business in a surprisingly rapid timeframe.
The Millhaven based company, which specializes in industrial heating and cooling coils for a variety of HVACR applications (furnaces, air conditioning units, and most equipment involving air movement) started in 2007.
By the time serial entrepreneur Pat Occhicone purchased the fledgling business in late 2010, the company had 11 employees, working from a 7,000 sq. ft. facility. He had done business with the company under its previous ownership and knew its products were of high quality.
When Occhicone became the company’s president and CEO, he saw the opportunity to expand beyond its original focus in producing smaller coils. While the market for these coils is huge, it also is extremely competitive, and subject to aggressive international competition.
His solutions: He purchased a 190,000 sq. ft. vacant former Bombardier plant in Millhaven, streamlined systems and processes, built a strong team of talented employees, and expanded capacity to allow for much larger and custom-built coils and equipment.
Today, the company caters to four diverse markets, Occhicone says.
- Small and medium coils for OEM customers, typically with high volumes and lower margins;
- Large coils, in smaller quantities, for the custom OEM market;
- The replacement market - “We need it now” customers, serviced with quick ship options and custom designs; and
- Custom-engineered products to serve the sales representative market.
The extra space has proven to be one of the keys to the company’s rapid growth. Within a few years, the company was using about 85,000 sq. ft. of the building. Today, Occhicone says some 110 to 120 employees work in about 110,000 sq. ft. of the plant’s space “and we still have room to grow.”
Occhicone says the business has been growing at a rate of 25 to 30 per cent a year, and he expects this growth to continue. He attributes the growth to the exceptional team of talented the business, from management, to sales and customer service, right through to manufacturing, all striving to meet and exceed customers’ needs.
Motivating their performance is a lucrative profit sharing program. He says partner Jeff Reil oversees the production, while he focuses on business development and overall business strategies.
The company’s specialized products require employees to learn how to build them through in-house training. Mistakes can happen. “When we make a mistake, we take our issues seriously. We make sure we address them and correct them,” he said.
“I preach that if we learn from our mistakes, perhaps the mistake was just an expensive lesson,” Occhicone said. “But we try to keep expensive lessons to a minimum.”
He says most of the company’s business is either directly or indirectly with the U.S., with about 40 per cent of the company’s volume shipped directly and another 30 per cent included as a component of other manufacturers’ products.
Does U.S. president Donald Trump’s call to renegotiate or end the North American Free Trade Agreement (NAFTA) concern him? “If certain tariffs are imposed, it could have an impact,” he said. “But part of my plan is to set up a manufacturing facility in the U.S.” As well, the business is diversifying into other international markets, with recent shipments to new customers in the Philippines and the Caribbean.
The business retains its basic values. “You have to deliver on what you promise,” Occhicone said. “In life, we have only one thing we value, and that is our word. If people trust what you say when you say it, they will come back to you.”
“Direct Coil is positioned for growth, and with our biggest focus on customer satisfaction, ultimately that’s what I believe will allow our continuing growth. Within this industry, we want to be a major player for many years to come.”
You can learn more at www.directcoil.com.
This article appeared in the February 2018 edition of the Ontario Construction Report.