Capacitor Ambassadors

At SB Electronics in Barre, partners Ed Sawyer, left, president and CEO, and Mark Browning, vice president of sales and marketing, have found solid technological and marketing niches for their capacitors.

This Vermont manufacturer is going places, but not offshore

by Virginia Lindauer Simmon

Ed Sawyer is high on technology. That's not surprising for an engineer who's working in the electronics industry, but the president and CEO of SB Electronics, a Barre firm that manufactures film capacitors, is speaking of a more narrow definition of the word technology.

Increasingly, the company makes capacitors aimed at specific applications for which the company has exclusive contracts. It's a niche that's growing and keeping jobs in Vermont, says Sawyer.

According to Merriam-Webster, a capacitor is "a device giving capacitance and usually consisting of conducting plates or foils separated by thin layers of dielectric (as air or mica) with the plates ..." yada, yada, yada. Sawyer's definition is to the point and easier to understand.

A capacitor, he says, is similar to a battery, because it stores energy. Unlike a battery, a capacitor quickly discharges its energy when the charging current is removed and immediately recharges itself. "Because it discharges kind of at will," says Sawyer, "it's used in many electronic circuits for a whole host of things."

Included in that host of things is SB Electronics' most intriguing customer, the Taser X26, a stun gun that uses SBE's capacitors exclusively. In the Taser, says Sawyer, "the capacitor that we make is charged up to an extremely high voltage and then discharged very rapidly into the person's skin that's basically shot with the Taser. As soon as it discharges, it immediately recharges itself so it's ready to do it all over again."

It's this kind of application that has opened the future for SBE to continue manufacturing a product that, in many circles, is considered a cheap commodity made increasingly in Asia, and is found in everything from radios, televisions, cameras, microwave ovens, toys and VCRs to military tanks, airplanes, submarines and space vehicles.

"It's a price-war type of business," says Sawyer. "What Mark and his dad found when they started a transition in the late 1990s was we couldn't survive in fact very few businesses in the United States could survive if the product is a commodity, if the Asian marketplace is going after it."

"Mark" is Mark Browning, Sawyer's partner and vice president of sales and marketing at SBE. Sawyer and Browning bought the company from Browning's father, Perry, in 2002, not long after Sawyer joined the team.

SB Electronics' roots hearken back to 1945, when Rock of Ages Corp. entered into a sub-contract with Sprague Electric Co., a Massachusetts firm. "Sprague Electric was looking for help to manufacture capacitors for the war effort," says Browning.

Rock of Ages set up a granite quarry shed on Main Street, where Sprague set up its equipment, which, adds Sawyer, used treadle-operated machines, very similar to sewing machines of the time, to wind the capacitors. Rock of Ages placed an ad in the newspaper offering jobs for women to "serve and earn in vital war work," with a starting rate of $29.74 for a 48-hour week. Rock of Ages' Capacitor Division was born.

Sprague bought the operation from Rock of Ages in 1969, the year Browning's father was named operations manager and brought his family here. Browning was 7. Twenty years later, having graduated with a degree in physics from the University of Maine at Orono and spent a few years working for a company in Massachusetts, he joined his father at Sprague-Barre, the only one of Perry's five children to do so.

In 1984, Sprague transferred several of its product lines to another location. Perry bought the operation in December 1985, and in January 1986, bought Sprague's line of radial-lead film capacitors and immediately entered into an agreement with Sprague to manufacture several lines for it.

SB Electronics' capacitors are found in such devices as theft protection equipment for retailers like Home Depot and Wal-Mart; electronics that monitor power in the electric grid; lighting controls; and in the Taser, a stun weapon. From left are William "Bucky" Gagne, production manager; Ken Kennedy, engineering and quality manager; Stuart Deliduka, sales account manager; and Terry Hosking, senior product development engineer.

Sawyer, a Massachusetts native, came to SBE in early 2002, with a bachelor's degree in electrical engineering from Tufts in 1984 and a recently earned MBA from Colorado State. He also brought a rich background in applications and sales engineering, having worked for companies such as Lucent Technologies, Emerson Electric and Banta, a Fortune 1000 company. An imminent move to another division of Banta inspired Sawyer to take stock of his life and goals. He decided it was "time to get off that ride" and do for himself what he had done for others run his own business.

"I was familiar with SBE in the history of my career," he says, "because of the relatively small marketplace in electronics. I happened to be connected up with a Vermont business broker who knew that Perry Browning was interested in finding a partner for the business. He connected me with Perry and Mark."

Sawyer ran the company for Perry for the first half of 2002, and in June, he and Browning bought the company and Perry retired.

Sawyer is convinced the company has a sustainable formula with the exclusive high technology market the company is pursuing. An example is recent work with a company called FieldMetrics, which makes "an environmentally clean and much more accurate measurement device that's used all over the utility grid so people can monitor just how much power is, or in the case of last August, isn't flowing through the grid," says Sawyer. "They've gotten Department of Energy R&D funds and they have agreed to use our capacitors exclusively in their new products."

Sawyer defines two niches for the company: the technology niche (such as Taser and Field Metrics) and the manufacturing niche. SBE does contract manufacturing for other companies. The typical lot size is 2,500 to 25,000 units, peanuts for larger mass manufacturers. "We can stop our process and do some hand work; it's a merger of human and machine," a merger, says Sawyer, that creates efficiencies in the work they do and allows for rapid adaptations. This flexibility allows the company to have a very short turn-around time.

Sawyer has put to work his experience in Asian development and business supply while he was at Emerson. SBE buys about half of its raw materials from Asia and half from North America. The company exports 10 percent to 20 percent of its products, and Asia is the largest market for export. "We send quite a bit to Mexico, a small amount to Europe; very little stays in Vermont," Sawyer says. In Vermont is PCI Lighting Controls in South Burlington, one of the company's top 20 customers. "We developed a special design for an application they had."

While contract manufacturing remains an important part of the company's business, Sawyer and Browning believe the company cannot fully survive and grow without this new exclusive technology focus. "Bringing it home to Vermont, it's the fact that we've found a sustainable manufacturing method and process that we believe will let us grow again, let alone allow us to keep jobs here," says Sawyer.

Mavine Huntington has been with the company for more than 30 years. She's pictured at what's called the "end-of-line" machine, which carries capacitors to be pressed, stamped and crimped.

"We've gone from approximately 30 employees to 40 in the last 18 months, and I don't believe we should be reversing that trend going forward. They're good jobs, skill-based jobs, and we've got a nice ability to bring in lesser skilled employees at entry-level positions."

Last year's sales were slightly over $2 million, Sawyer says, and the projection is to grow by 20 percent or more in 2004, which is on track. "Because of the explosive growth of that new X26 product, our sales to Taser alone will be up over 50 percent in 2004," he says. Taser was roughly 10 percent of SBE's sales in 2003, and one area of growth for Taser is the recent approval for Tasers to be in commercial airplane cockpits.

SBE's exclusive high-tech work has not gone without notice. In January, the company was named runner-up Vermont Small Business Innovator of the Year at the Vermont Innovation Forum for its development work in creating the Pulse capacitors used on the Taser stun guns and the high voltage capacitors used in the electric utility grid, both of which have provisional patents filed by the company.

"When we won the award for Small Business Innovator in Vermont the winner was Concepts NREC, a true research and development company that expanded over time in R&D and has never been a manufacturer like our company to be in the same breath with them as the runner-up really reinforces the feeling we have that we've made the transition."

To fund additional research and development, SBE announced in January an offering of Common Stock exclusively to Vermont residents. Vermont's Small Business Stock Offering Exemption regulation allows the company to sell up to $500,000 of Common Stock to individual investors.

"It's the first one done in the last three years because of the economy," says Sawyer. "We're trying to raise money in the first half of 2004 so we can continue to accelerate our growth and turn another two or four or five Taser-type stories.

"We're never going to be in the home stereo market, because if your stereo goes on the fritz, you say a few choice words and have it fixed, but nobody's died or been injured. People will pay just a small amount for a capacitor, and they're all right if there's a 1, 2, 3 percent failure rate in the field. I don't think even one failure out in the field is acceptable. That's what we aim for."

Originally published in March 2004 Business People-Vermont