Reko International Group Inc. plans to begin its own mold tryouts by June to cut its subcontracting costs. The Windsor, Ontario, firm will spend about C$1.3 million (US$962,000) on three new HPM presses and related equipment, Peter Veighey, vice president of operations, said in a telephone interview.
The mold and machinery maker wants more control over mold tryout scheduling. It also wants to cut transportation and other costs it now incurs by sending molds out to other local firms for trials.
``Subcontracting costs mount up,'' Veighey said. ``We want to bring those costs in-house. Each mold needs two or more tryouts.''
Reko plans to begin operating a new, 880-ton HPM press by the end of May. It will receive 1,500-and 400-ton HPM presses by July.
Reko is financing the mold tryout investment using funds from its initial public offering in May 1994, in which it netted C$20.4 million (US$15.1 million). Reko used some of the proceeds to expand electrodischarge machining and milling capacity and to construct a 55,000-square-foot facility in Windsor.
Veighey said most of his firm's sales are automotive and industrial molds. It recorded sales of C$22.6 million (US$16.7 million) and profit of C$2.8 million (US$2.07 million) for the six months ended Jan. 31. Sales for the corresponding 1994 period were C$10.7 million (US$7.92 million) and profit was C$1.4 million (US$1.04 million).
The company's growth reflects strong mold markets, extra toolmaking capacity and the acquisition of Tri-Mi Mould (1990) Inc. of Windsor in 1994. Reko's other subsidiaries are Reko Tool and Mould (1987) Inc. and Concorde Machine Tool Inc.
Reko listed its total assets as of Jan. 31 at C$53.9 million (US$39.9 million), including capital assets of C$22.6 million (US$16.7 million). Capital assets a year earlier were about C$6.5 million (US$4.81 million). Steven Reko, president and chief executive officer, established the company in 1976.