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Howard Industries capitalizes on privately-owned status

In Tech Park South (TPS), just outside Ellisville (between Laurel and Hattiesburg), workers are finishing up construction of the sides of the Howard Industries (HI) Substation Power Transformer Plant and work on the facility is expected to be completed early in 2005.

“All infrastructure work is completed and once equipment is moved into the the new building, production will start,” according to Sandy Holifield, Economic Development Authority of Jones County director.

When work on the Howard TPS building is finished, construction will start on the HI Computer Division plant in Howard Technology Park, across Highway 11 from TPS (and just off I-59).

“Some site work on the computer plant is expected to start around the first of the year,” Holifield said. She’s also Howard Technology Park coordinator.

Last year, the computer division launched an innovative electronic cart — MedCart — that integrates into one unit all of the items that hospitals use for dispensing medication, and allows hospitals to meet the new bar code medication dispensing requirement of the Food and Drug Administration.

“That first cart was full-sized…large,” according to Manuel Shows, director of federal sales. “Our intent was to take all five sub-assemblies — with no compromise in quality or performance — and reduce the size and put it on a smaller footprint.”

Shows said that’s been done, and that the smaller MedCart will be in production form for the January 10, 2005, sales meeting, for training purposes.

“We’ve now got 700 to 800 MedCarts in 40 to 50 Veterans Hospitals,” Shows added.

This past August, HI introduced new mobile transformers that are designed to be used with mobile power systems and are,

“The ideal choice for applications requiring step-up transformation and interconnection with an electrical distribution grid,” according to an HI spokesperson.

They are specifically designed and equipped to take all the wear and tear that a transportation system receives.
Also in August, HI announced that it was now manufacturing a new line of junction enclosures, designed to provide, “a rugged, tamper-resistant housing for multipoint medium-voltage junction modules.”

Expansion and new products have been hallmarks of HI since the business started producing transformers in 1969. And HI’s founding is quite a story.

Billy Howard Sr. left General Electric (GE) after 12 years and started trying to pre-sell his new distribution transformer, although he had no plant and no product to show. With only drawings, his reputation at GE and his ability as a salesman, he pre-sold $4 million worth of transformers.
Howard then had to secure a state Balance Agriculture With Industry bond before the plant could get under way. The bond required approval by local voters and 96.5% voted in favor of the bond.

HI’s first plant was 50,000 square feet and employed 30 people. There was only one line of transformers at the beginning.

Today, HI is a $500-million company with five divisions employing some 3,300 people. The transformer plant, which has been steadily upgraded to a full line of transformers, is now 1.6 million square feet, and Howard sells its transformers in all 50 states and 14 foreign companies, including Italy, Japan, France and China.

Howard Sr. said that large areas of China have not yet been electrified and, since the Chinese government has done business with HI, there’s a good chance that they’ll buy more HI equipment.

One of the principal reasons the Howard family gives for its steady growth and expansion into new fields is that it’s a privately-held company that doesn’t have to answer to stockholders and a board of directors intent on the bottom line for the current year.

Another advantage of being privately held is that HI can expand during bad economic times, according to HI president Linda Howard. So, the company with the capacity (such as Howard) can take advantage of the upturn when the economy picks up.

Being privately-held helps explain Howard’s impressive growth since 1969, so that it now has five core divisions:

• Distribution Transformer Division — The number one producer of distribution transformers in the U.S., its Laurel plant is the largest transformer plant in the world. All transformers are built to order and custom-designed for each customer. HI makes its own parts in house and only raw materials are purchased from outside suppliers.

• Ballast Division — Only started in 1994, the electronic ballast division is now ranked third in the industry. HI also produces magnetic ballasts.

• Transportation Division — A wholly-owned subsidiary that operates 150 tractor-trailers, both as common carriers and to haul HI’s products. HI Transportation has also moved into the agricultural commodities business. Using agents, crops are purchased from growers, buyers are located in other locations and the commodities are transported to the markets.

• Computer Division — Started in 1999, it now manufactures 12,000 units per month at its state-of-the-art ISO 9001-certified assembly facility — desktop work stations, laptops, servers and storage components, as well as related equipment and accessories — and MedCarts. Howard Sr. has formulated a commercial team to sell MedCarts to the non-federal medical community and, just recently, HI shipped the first order to a medical facility in Scottsdale, Arizona.

• Power Transformer Division — Plant now being built in TPS. Power transformers step down voltage so that electricity can be supplied to businesses and homes. Because of their size and weight, many of the power transformers will have to be shipped by rail and the new plant is located near a rail spur.

Howard Industries is truly a family affair. Billy Sr., is CEO and his wife, Linda, is president. Each of their three children — Billy Jr., Michael and Cyndi (McCoy) — has a major role in the business. One family making all the decisions means running a company is much easier, according to Howard Jr.

Contact MBJ contributing writer at George McNeill at mbj@msbusiness.com.


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