WEGU Manufacturing Inc.

WEGU Manufacturing Inc. (WEGU) is a molded rubber and plastic products manufacturer based out of Whitby, Ontario. Since its establishment in Whitby in 1973, WEGU has prided itself on providing quality products at competitive prices to customers in a variety of different markets. WEGU continues to stay at the forefront of industry trends due to its role as a leader in research and development and its two-shot injection capabilities.

WEGU began as a German company, specializing in the production of sailboats. Shortly after its move to Whitby in 1973, WEGU began supplying Volkswagen with rubber components. Over time, the company's sailboat business was phased out in order to focus on the more profitable business of rubber and silicone components. WEGU acquired an industrial rubber and silicone components producer in 1992, and a few short years later, introduced two-shot injection molding to its production process. This addition helped to define WEGU's competitive advantage as the process is versatile and enhances product quality. The company has been Canadian-owned since 2010 and uses the expertise gained from almost 50 years of manufacturing to satisfy various customer needs.

Today, WEGU manufactures around 500 different products for over 100 customers. While the company does manufacture a line of its own WEGU-brand products, the majority of its business derives from products that are uniquely designed to fit individual customer specifications. These products range from windshield clips to conveyor system components, and can be broken down into three main categories: pressure relief valves, rubber overmolded products for industrial applications, and industrial and automotive single-shot plastic components.

Producing high-quality rubber components is no easy task. Rubber undergoes a chemical change during the manufacturing process and without significant experience and knowledge, manufacturers have a difficult time maintaining the level of quality demanded by customers; this is where WEGU’s expertise comes in. As noted by Mark Fuller, Experience Account Manager at WEGU, the company’s years of experience and capable employees help it to produce high-quality products on a consistent basis. These advantages have also allowed WEGU to be flexible in the industries that it markets products to.

While WEGU manufactures goods for customers in industrial, military, construction, and mining markets, the majority of its business is automotive. Specifically, 70 per cent of sales are with just a few large automotive companies. Positioning itself as a leader in the automotive industry helps WEGU tailor its products to the needs of these customers—companies that need suppliers that are ISO certified, able to meet delivery and quality expectations, and quick to resolve issues. WEGU is proud to meet all of these requirements.

Another interesting aspect of WEGU’s business is that as of 2014, over 68 per cent of the company's total sales were through exports. Most of these are to the United States and Mexico, but WEGU also exports to China, Brazil, South Africa, and many other countries. Further, the company has the capacity to expand internationally in its rubber and plastics divisions, and is looking to increase business with other original equipment manufacturers with global footprints. Having such an international focus allows WEGU to continue gaining experience in diverse markets.

Two things set WEGU apart from its competitors: its expertise in the product-design and manufacturing processes, and its two-shot injection molding capabilities. Upon talking to employees and touring the plant, one immediately observes how dedicated WEGU is to building and maintaining this reputation for expertise. Attached to the plant is the company's own laboratory (lab), operated by its in-house chemists, where employees manufacture and test prototypes, conduct research, and ensure that every product meets the necessary technical requirements. Most companies of a similar size do not have the resources to build such a lab, which gives WEGU a significant competitive advantage.

Two-shot injection molding is another advantage for WEGU. This cost-effective process involves two steps. First, one material is injected into a mold to make the initial section of the product. After the initial section is created, it is put into a second cavity and a material that is compatible with the original material is injected. The technique uses one machine cycle rather than using separate machines, so it costs less for a production run and requires fewer employees to make the finished product. Two-shot injection also improves the quality and aesthetics of the finished product because there is less human intervention in the production process.

Moving forward, WEGU plans to continue using its unique multi-shot injection molding to target more of the high-potential North American market. While the company faces off-shore pressures in terms of pricing, it is still better able to provide high-quality products with shorter lead times than off-shore firms, which is something customers value. Another area WEGU is looking to expand into is the use of its industrial elastomers (rubber) in the pump, conveyer, commercial, and military industries; the company is well positioned to expand in this area (and others) because of its production capacity and knowledge in the industries.

In addition, WEGU hopes to expand its involvement with various levels of government and industry organizations. Historically, WEGU has participated in events at both the municipal and regional level. The firm regularly attends events sponsored by the Town of Whitby and the Regional Municipality of Durham to promote its business and understand the needs of the local community. WEGU also became involved with the Excellence in Manufacturing Consortium (EMC), which enables it to keep up to date on industry trends and identify areas of improvement.

Moreover, the company takes advantage of programs implemented by the Ontario provincial government. It has had continuous support through the Canada-Ontario Job grant (which assists with the training of employees on a consistent basis), and made use of programs to reduce greenhouse gases and improve the overall efficiency of its manufacturing process. A final area of government assistance that WEGU is particularly grateful for is its access to government-funded labs at the University of Ontario Institute of Technology; the company has used this access to further its product knowledge and contribute to its well-founded reputation.

WEGU is a perfect example of the expertise that can be found in Ontario’s manufacturing sector. Its success has helped contribute to Southwestern Ontario’s reputation as a hub of the automotive industry. With skilled employees and extensive experience, WEGU is sure to succeed as it continues to expand into new markets and industries.

Company Profile

Company Description

Overview

WEGU Inc. is a multi-national manufacturer of molded rubber and plastic products. Product design assistance, engineering, tooling development, prototyping, testing and manufacturing, and materials analysis are all offered in-house. WEGU Inc. prides itself on its ability to consistently meet all of their clients' physical and chemical requirements for noise and vibration mitigation, product durability, flexibility, and abrasion resistance.

Key Facts

Headquarters:
707 Harbour Street

Whitby, ON. L1N 9GB

Executives:

  • Chief Financial Officer: Angie Lowe
  • Operations Manager: John Shelley
  • Manager of Product Design, Sales and Engineering: Mohsen Mousavi

Year Established: 1973

Number of Employees: 91

Revenues: 17-19 Million

Products

WEGU Inc. offers a complete product development capability for both rubber and thermos-plastic materials. This allows WEGU Inc. to manufacture products for a variety of industries.

  • Automotive Plastic: hard plastic materials for structural purposes with softer plastic materials that provide sealing and/or dampen vibration and noise.
  • Automotive Rubber: insulating automobile occupants from noise and vibration.
  • Construction Equipment: products that absorb the majority of the shock and vibration in construction and mining conditions.
  • Mining Equipment: products that are resistant to the extreme abrasion, corrosion, and shock conditions encountered during the extraction and processing of ores.
  • Ores and Aggregate: products that absorb the majority of the shock and abrasion encountered when conveying ores and aggregates.
  • Terring Systems: developed a system that that utilizes flexible and durable vulcanized rubber slab supports to support concrete paving stones.

Markets

Customers: WEGU Inc.’s ability to design and manufacture unique products to fit customer needs has resulted in them supplying over 100 different customers. WEGU Inc.’s largest customers are Tier 1 Automotive, Slurry Pump Manufacturers, Conveyor Manufacturers, and customers from both military and other commercial markets. WEGU Inc. exports just over 68% of their total sales. Some countries that WEGU Inc. exports to are the United States, Mexico, and Spain.

R&D, Skills and Educational needs

Employees: There is not a required skill set that potential employees are expected to have prior to applying for a job at WEGU Inc. All employees are trained at WEGU Inc., so attracting potential employees has never been an issue. The majority of the current workforce at WEGU Inc. has been there for a long time. The loyalty displayed by employees at WEGU Inc. is indicative of a positive work environment and culture.

WEGU Inc. is well known in the industry as a leader in Research and Development. WEGU Inc. has also become more involved in Voice of Customer activities so that they can better understand what customers value.

History

WEGU Inc. began as a German company that built sail boats in the early 1960s. In 1973 WEGU Inc. was established in Whitby, Canada, still building sail boats. WEGU Inc. began manufacturing rubber products and expanded in 1992 with the purchase of Cardinal Rubber. In the mid 1990s WEGU Inc. introduced two shot injection molds, which allowed for the production of components using two different materials. In 2012 WEGU Inc. purchased a number of single shot injection presses from auction.

Competitive Environment

 

Competitors

WEGU Inc.’s ability to manufacture unique parts that are specific to customer needs has allowed them to differentiate themselves from similar manufacturing companies.

Partnerships

Government Relationship: WEGU Inc.’s interaction with multiple government programs have all been positive and beneficial. WEGU Inc. takes advantage of SMART Program Funding and the IRAP Program, while also receiving support from the Ontario Jobs grant for the training of employees. WEGU involvement with these various government programs has been an asset to their economic growth.

Educational Institutions: WEGU is currently working with UOIT and Durham College to take advantage of Capstone projects that keeps them up to date on new and innovative technologies. Additionally, WEGU is able to utilize the government-funded laboratories at UOIT for testing, which further proves their commitment to research and development.

SWOT Analysis

Strengths:

  • In-house lab to develop and test new compounds requested by potential customers
  • Two shot injection molds that allow for products to be manufactured from two different materials
  • Location in Whitby is close to automotive markets and provides a large, high-quality employee pool

Weaknesses:

  • Majority of advertising occurs through word of mouth
  • Ageing workforce means that many experienced employees will be retiring within the same time period

Opportunities:

  • Capacity to provide international requirements in the rubbers and plastics division
  • Products can be supplied to the North American market in shorter lead times versus off-shore supply
  • Ongoing possibility of entering new product markets and acquiring new consumers
  • Expansion of manufacturing plants overseas
  • Utilizing two-shot injection molds to acquire new customers that require products made from two different materials

Threats:

  • Continued off-shore pressure to decrease prices
  • Uncertainty regarding NAFTA may have an effect on sales

OTHER PROFILES