Concepture, a 50-50 subassembly design and production joint venture between Dow Chemical Co. and Derby Industries Inc., is shipping its first commercial products this month. The year-old joint venture's first project is the Car Talker, a window-mounted unit that can play and record messages for auto buyers who want to check out dealers' lots during off-hours, free of pressure from salesmen.
The device can provide car shoppers with a vehicle's features and financing options as well as record a brief message if the buyer wants to be contacted by the dealership.
Concepture, which operates out of Dow headquarters in Midland, Mich., designed and produced the Car Talker for Advanced Information Systems, a communications technology firm that also is based in Midland.
Richard Lee, Concepture's marketing manager, said he's optimistic that Concepture designs and products will be in major appliances such as refrigerators and washing machines in 2001.
Concepture's basic goal is to give Dow access to Derby's low-cost maufacturing capabilities and to allow Louisville, Ky.-based Derby to access Dow's engineering expertise.
Dow also benefits from Derby's logistics experience, Lee said.
"The subassembly market needs to move at a much faster delivery rate than [Dow] is used to," he said. "In some cases, they're making hundreds of deliveries on a daily basis. That's not the same as moving rail cars or trucks of resin."
The joint venture is aimed at serving the appliance makers that make up a majority of Derby's business, although its first project is outside of that market.
"If GE farms out an ice maker to me, I can give them the subassembly," Derby President Raymond Loyd said. "But if they want an ice maker that's half as big and makes cubes twice as big, we can't do it. That's where we need Dow."
But he pointed out that a project has to be substantial enough in size for Concepture to take it on.
"If you're going from a three-piece metal part to a one-piece plastic part, there's really not enough there for us to contribute," he said. "If you're going from 100 parts to three, we can do it."
The Car Talker also was somewhat different in that Concepture designed and produced the entire product, rather than just its subassemblies.
Dow originally considered entering the subassembly business on its own before deciding to enter into a partnership.
"We looked at building from scratch or buying an existing producer, but we can get just as much horsepower from a partnership," Lee said.
With more appliance makers outsourcing their subassemblies — and with major appliances using an average of between five and 10 subassemblies each — there's a good-sized market out there for Concepture to tap. Loyd believes Concepture will allow appliance makers to do development work on new products while reducing their risk and costs.
Dow has sold plastic resins to Derby for several years, but the Concepture effort isn't necessarily aimed at drumming up new business and applications for Dow materials, Loyd said.
"Concepture is actually selling engineering talent," he said."If the solution calls for powdered metal, that's what we'll do."
This was especially true with the Car Talker, where the injection molder that worked on the project used a non-Dow ABS resin.
"The plastic portion was a relatively minor cost, so it didn't make sense for the molder to switch resins," Lee said. "The value we added was intellectual."
Derby plans to generate $150 million in sales this year, about $40 million from plastic subassemblies. The firm owns and operates Flair Molded Plastics, an injection molder with 30 presses in Evansville, Ind., and 15 presses in Richmond, Ky.
Lee expects future Concepture projects to target other markets such as building and construction or telecommunications. The business is designed to handle any market but automotive, which is served by Dow Automotive.