Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, December 19, 1993 TAG: 9312170307
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: LON WAGNER STAFF WRITER
DATELINE: LENGTH: Long
The dress code, including what the president and vice president wear to work, is best described as fraternity house attire: jeans, sneakers, sweatshirts or golf shirts.
But the laid-back attire disguises a cutthroat business. The company's customers need components produced in a month or less; in this industry, new products can be outmoded by the time they hit the market.
The outfit pays good wages, listens to advice from the college graduates who work on its production floor, encourages its workers to make mistakes in the name of experimentation and can ship thousands of its finished products in a single Federal Express package.
Is this a Silicon Valley microchip manufacturer? An Austin, Texas, computer software company?
No. It's Noble-Met Ltd., a supplier in the burgeoning medical device market. And, perhaps to the surprise of some, Noble-Met is growing into a nationally recognized name in the medical components field.
Noble-Met's two founders - 35-year-old John Freeland, president, and 32-year-old Mike Miller, vice president - nearly fell on their faces during the company's first year. But the company will come close to the $2 million sales mark this year, and projects that number to grow to $3.3 million in 1994.
Noble-Met supplies microscopic "marker bands" to companies that make balloon catheters. Used for angioplasty, balloon catheters are threaded through clogged blood vessels to clear the passages.
Noble-Met's marker bands, often made of precious metals, go inside the catheter's balloon. Unlike plastic, the metal marker bands show up on X-rays, so a surgeon can track them and know when to inflate the balloon.
After beginning production in 1989 in Roanoke, Noble-Met supplied marker bands on what Freeland calls a "me-too" basis.
"Our product was not any better than any of our competitors," Freeland said. "All we could do was try to supply them more quickly."
So they undercut the industry's normal eight- to 12-week lead time and promised to deliver orders in three to five weeks.
In the competition to develop medical devices, the first company to bring a product to market gets in the door - then slams it behind them. Noble-Met's fast delivery won contracts.
Miami-based Cordis Corp., a Noble-Met customer, has received Food and Drug Administration approval for more than half a dozen balloon catheter designs this year. Marie Struttmann, a Cordis purchasing agent, explained that her company can't postpone introducing a new product because of a slow supplier.
"If you're out there and you're first, you might get in; if you're second or third, maybe not," Struttmann said.
Cordis, which had $255 million in sales in the fiscal year ended June 30, has been buying parts from Noble-Met since 1991. Struttmann said Cordis requires its suppliers to meet its quality standards 98 percent of the time. Noble-Met's marker bands have a quality rating of 100 percent.
Cynthia Hassall, purchasing manager with J&J Interventional Systems of Warren, N.J., said her company has never had to reject a Noble-Met shipment. Noble-Met's marker bands go into a stainless steel tube J&J makes. The tube, called a stent, is inserted into a patient's artery after angioplasty to prevent the vessel from clogging again.
Hassall said the Roanoke Valley company has tailored its deliveries to J&J's use. Noble-Met has agreed to ship marker bands in quantities of 100, so it can go straight to J&J's production operation without the company having to separate them itself. And Hassall said Noble-Met has offered its own suggestions in the past.
"They have an excellent attitude, they've got good ideas, and they're not afraid to say, `Hey, Mr. Customer, why not try it this way?,' " Hassall said.
And how did Noble-Met link up with J&J, a 6-year-old division of monolithic Johnson & Johnson, the world's largest maker of health-care products.?
"They bailed me out, the first time," Hassall said. "One of their competitors stood me up, and I called them and said I needed it in two weeks. They said, `No problem.' "
Noble-Met has achieved this glowing reputation in just five years. The company has outgrown two locations: 1,500 square feet of rented space near Roanoke Regional Airport, and 9,000 square feet in the Southwest Industrial Park off Starkey Road in Roanoke County. By June 1994, Noble-Met expects to move into a 20,000-square-foot building in Salem's new industrial park on Apperson Drive, becoming one of the park's anchor businesses.
Noble-Met reached this level of success by recognizing a void in the medical-supply market, wedging itself into that niche and sweating through some harrowing months during its infancy.
\ Freeland, who studied metalurgical engineering at Lafayette College in Pennsylvania, got a job in 1984 in a Philadelphia-area plant of Johnson Matthey PLC, a London-based multinational firm that refines and markets precious metals.
Two years later, Freeland hired Miller, a mechanical engineer from the University of Pittsburgh.
Freeland and Miller tried to encourage their superiors at Johnson Matthey that a growth area was emerging for high-quality "drawn tubing."
"We tried to take that company in this direction," Freeland said, "and they had other ideas."
On Jan. 1, 1989, they chartered Noble-Met Ltd. "Noble" because of the high-value materials they use, and "Met" for metals.
Freeland, then 30, became president, and Miller, then 27, became vice president. Despite the powerful titles, for the first six months they also were the company's only workers - so the president and vice president designed the product, made the product, loaded shipments and headed up sales.
Noble-Met could have located anywhere - thousands of units of its product can be shipped in an overnight-mail envelope. But leaving the Philadelphia area proved to be a good move, because that is Ground Zero for the tube-making industry; engineers there frequently switch companies, taking production secrets with them.
They set up in Roanoke, only because they knew jewelry maker John C. Nordt Co. Inc. had a secure facility for their metals and some of the machinery they needed to make the tubing. But in the early going, having trade secrets pilfered was the least of Noble-Met's problems.
"At the end of the first year," Freeland said, "we knew we were in trouble." They got some orders from Johnson Matthey at first, "but they were a little bit nervous about what they were creating, so they pulled all that business back."
One of the niches they eyed in starting out was making filaments for sodium vapor lamps. At the end of their first year, a major company that had seemed interested in buying those filaments told Noble-Met it wasn't interested after all.
"We'd meet like every night and talk about where we were," Miller said.
"We'd set goals for each month. It went for a long time where we always seemed to just make it, or at least make it enough to try another month."
They decided to target marker bands, and the strategy worked. They took on another partner, Frank Page, a Virginia Tech graduate who had studied economics. Page, now 29 and operations manager, met Freeland during a pick-up basketball game. A few months later, when the Roanoke native was looking to Richmond and Washington for a job, Freeland and Miller hired him.
"I came here and set up an accounting system, which wasn't much since we didn't have much business," Page said. "Right now, we're starting to gain enough market share to get the attention of customers."
Though Noble-Met gained its foothold with a quick turnaround time, it suspected that advantage would disappear. So Noble-Met began to refine its product.
The process of manufacturing tubing involves pulling metal tubes through smaller and smaller dies. The tubes are then cut into small pieces.
The bands are often so small in the final stage they are held with tweezers and finished under a microscope.
The quality of marker bands is measured in three main areas: their roundness; the degree to which their burr, or rough edge, can be eliminated; and the thickness of the band's wall. The wall of some bands - there is an opening, of course, for a lead of the catheter to pass through - is thinner than a strand of hair.
Noble-Met claims to get the better of its four or five national competitors in each category. It boasts a minimum wall of 0.001 inches, for instance, when the industry standard is 0.0015 inches.
Hassall said J&J's quality analysis department "doesn't really see what they're talking about" when it comes to Noble-Met's claims of exceeding the industry's standard.
"I would say their quality is excellent, but it's similar," Hassall said. Noble-Met's primary advantage is its reliability.
"It's a young company, and they know what they're doing," she said. "When they say they're going to make a delivery, they do it."
\ Like an adolescent, the trick for Noble-Met will be to grow without getting gawky.
The company expects to expand its work force by one-third this year, jumping from 16 to 24 workers. More important, perhaps, is the company's record in keeping its employees satisfied: Freeland said 16 of 17 people Noble-Met has ever hired still work there.
"We're not just looking for anybody," Miller says. "We have a lot of interviews to find the right employee. Every one of our employees is just . . . just perfect.
"A $20,000 machine can be worth nothing without the right employee behind it."
Scott Jarrett, a 21-year-old Radford resident, is one of those employees. He has worked for Noble-Met nine months as a machinist, putting to use his associate's degree in machine technology. Jarrett decribes the company as "more or less one family."
More than half the company's employees either have a college degree or, with the company's help, are working on getting one. Freeland says eight or 10 people now with the company have made "significant contributions" to improving the company's product or customer service.
Those employees have learned the company from the ground up by starting out as Freeland, Miller and Page did - pulling tubes through dies. When the company gets big enough, they'll move into managerial roles.
"They understand the process and the product," Miller says. "How many times have you called a place and talked to a sales rep, and suddenly you figure out he has no idea how they make their product?"
Noble-Met's means of growing apparently has impressed at least one huge company. In 1994, the Roanoke Valley company will have come full circle from the nail-biting times of its first year. That multinational company that pulled away from its overtures to buy filament for sodium vapor lamps has come around.
Freeland says he expects to sell General Electric $500,000 worth of filament next year.
\ NOBEL-MET LTD.
The company: Noble-Met makes tubular products from high-value metals. Its primary product, and the item that got Noble-Met into manufacturing of medical components, is a tiny "marker band" in balloon catheters used in angioplasty, the surgical repair of damaged blood vessels.
Operations: The company currently is in two frame buildings in the Southwest Industrial Park off Starkey Road in Roanoke County.
The medical manufacturing business is expanding rapidly, as is Noble-Met. It will move in June 1994 to a new, 20,000-square-foot building in Salem's industrial park on Apperson Drive. That will allow the company to consolidate its fabrication and finishing operations and have room for its expected future growth.
Employees: When John Freeland and Mike Miller founded Noble-Met on Jan. 1, 1989, they became the president and vice president - as well as its only employees. Later that year they hired Frank Page, who has an economics degree from Virginia Tech. Page now is operations manager and an owner along with Freeland and Miller. The company presently has 16 employees and intends to add another 8 workers by the end of 1994.
History: Freeland, a metalurgist, and Miller, a mechanical engineer, worked for Johnson Matthey PLC in Philadelphia when they decided in 1988 to form their own business. The men wanted to specialize in making high-value tubular parts, for which they saw a growing demand from the medical industry.
They set up shop in Roanoke primarily because they could rent space from John C. Nordt Co. Inc., a jewelry manufacturer which had manufacturing equipment similar to what Noble-Met needed. Gross sales: 1989: $150,000 1990: $220,000 1991: $630,000 1992: $1.1 million 1993: $1.8 million Source: The company
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