Growing Up - Government deals are backbone of hose business
Sunday, April 29, 2001
Syracuse Herald American
By Elizabeth Doran, Staff Writer
Jay Bernhardt left his sales job with a Liverpool rubber company in 1977 to establish a rival business, hoping he could make it on his own.
"Nobody can give you a road map of how it's going to be," said Bernhardt, who set up JGB Enterprises, Inc. "But my father was in business for himself, and I think he passed along the entrepreneurial spirit.
"Before I opened up, I thought about whether my customers bought hose from the company or from the salesperson, and decided it was from the salesperson," he said. "So I went ahead."
Almost 25 years later, JGB, which specializes in hose and hose accessories, is a resounding success. The company has grown from one employee in 1977 to 115 workers today, while sales have climbed from $300,000 the first year to $27 million in 2000.
By JGB's third year in business, sales hit $1 million. This year, Bernhardt expects to hit $30 million in sales.
JGB, which operates out of a 65,000-square-foot office at 115 Metropolitan Park Drive in Salina, fabricates, assembles and supplies industrial and hydraulic hoses and accessories to customers across the country in the automotive, marine, petroleum, dairy, construction and defense industries. Breweries, creameries, paper manufacturers, steel mills and chemical companies are among its customers.
JGB has been named to the Syracuse 100 lists of fastest-growing companies many times, and in 1994 was one of the first companies in the area to earn an ISO-9002 certification, which is a quality measure for procedures.
Its largest customer through the past 17 years has been the U.S. Department of Defense, which now accounts for 70 percent of JGB's sales and has helped drive much of its growth.
"A lot of people say you shouldn't put all your eggs in one basket, but year in and year out, we've been successful in growing our defense-related business." Bernhardt said.
The company has consistently placed among the defense department's top government suppliers, based on quality, performance and on-time deliveries, Bernhardt said.
In 1999 alone, JGB filled more than 8,000 contracts and purchase orders for the federal government. In all, the company has provided more than 45,000 products to the defense department.
As a leading Department of Defense specialty products contractor, JGB supplies a variety of spare parts, accessories and components used in aerospace, ground support and shipboard applications. JGB sells to the military both competitively through a bid process, and also in a non-competitive division through renewable yearly contracts.
Each day, JGB considers about 2,000 bidding possibilities, submitting proposals on about 300 bid a month and willing about 20 percent of those, said Martin T. Salanger, government sales manager.
JGB has diversified through the years. It provides complete kits containing machined items, castings and electrical components and hose assemblies. Today, just 30 percent of its sales to the military are hose-related; the remainder of its sales come from supplying complete kits.
One multi-million-dollar contract with the U.S. Army called for 96 kits with nearly 600 components each, Bernhardt said. These were used to retrofit field artillery ammunitions support vehicles.
One the non-competitive side, JGB has four blanket purchase agreements with the government, which renew each year. These are for single items, such as a screw, fender or bolt, and each contract must be less than $2,500, said Molly Beaubiah, who oversees that division.
JGB represents 1,800 vendors in all, which means anything the government needs from these suppliers it can get through JGB.
When the economy is floundering and there are cutbacks, the government often looks for spare parts to repair its equipment or machinery rather than purchasing new, which helps pump up JGB's business.
"When the emphasis is on rebuilding or repairing, we actually thrive," Bernhardt said.
JGB had been in business seven years before securing its first government contract after seeing a bid solicitation in the Commerce Business Daily, a government publication. Since winning that contract, JGB has continued to build the military side of its business.
During Desert Storm, the company supplied hundreds of tan-colored fueling and watering-hose assemblies used to set up portable fuelding depots, hospitals and kitchens. More recently, JGB won a multi-million-dollar contract to produce Harvest Falcon water distribution subsystems. Harvest Falcon is a transportable system used to accommodate U.S. Air Force personnel when they're deployed in off-shore locales.
Along with its military business, about 20 percent of JGB's sales are to commercial customers primarily from Albany to Buffalo. Local customers include Bristol, Niagara Mohawk, Carrier and Syracuse and Onondaga County purchasing departments.
JGB also has a branch office in Buffalo, which opened in 1985; and an office in Charlotte, NC, which opened in May, allowing a branch to be located near some of its commercial customers. The company also opened a sales office in Boston in the past month.
Another 10 percent of business comes from JGB's telemarketing group, which sells snowmaking hose for ski areas along with hoses for pressure washing, airless paint, fire protection, waterblast and more. The snowmaking hose is shipped all over the country and used at ski centers such as Gore Mountain and Bristol, Bernhardt said.
Although sales continue to be on the upswing, Bernhardt said he's set a lofty goal of $50 million in sales for 2003.
"It's going to take a lot of things coming together for that to happen, but it's our goal," Bernhardt said.
JGB hopes to accomplish that in part by acquiring some smaller companies that would expand its customer base. Also, JGB plans to do more engineering and new product development.
"Our growth curve has been pretty straight, and that's pretty exciting for us," Bernhardt said. "This is a very competitive business, but we've found the demand for our product is out there. It's just up to our ability to reach out to that demand."