In the 65 years since its inception as Héroux Machine Parts in the Montreal suburb of Longueuil, Héroux-Devtek has established a strong presence in the manufacture of airframe structural components and landing gear for commercial and military sectors.

Over the last year-and-a-half, however, Héroux-Devtek's share price (the company changed names in 2000 following a key acquisition) has more than doubled to C$9.90 ($10.05). The price has risen steadily on the strength of new orders, including a recent deal that makes the Canadian company a major supplier of structural components for Lockheed Martin's Joint Strike Fighter, and another that will see the firm design and build landing gears and tail bumper assemblies for Sikorsky's CH-53K Heavy Lift Helicopter's design and development phase.


Earnings have also climbed. For its 2008 fiscal first quarter, which ended on 30 June, Héroux-Devtek's net income grew sixfold year-on-year to C$4.2 million. Despite a C$900,000 negative impact from the stronger Canadian dollar, the company's consolidated sales increased 18.8% to C$78.8 million.

This included a 39.7% increase in sales at its aerostructure division, which supplies major OEMs, and a 12.7% rise at its landing-gear division, which is known as the third-largest landing-gear manufacturer after world leaders Goodrich and Messier-Dowty - both customers. The industrial segment, which supplies large machined components for power generation, showed growth of 18.8%.

With some analysts predicting that the aerospace industry growth cycle begun in 2005 could last longer than usual, signs point to Héroux-Devtek's continued achievement. The company has told investors that it will grow sales by roughly 10% to about C$305-310 million for the full fiscal year 2008 ending 31 March, of which the aerostructure division is expected to account for close to C$100 million, and the landing gear unit for around C$185 million. It also forecasts further profitability gains from lean manufacturing initiatives implemented in recent years.

"We've seen the down cycles and up cycles, but due to [growth in] China, and the Far East, the cycle is going to be longer and more robust. So we're very positive about our business," says Héroux-Devtek chief executive Gilles Labbé.

To ensure continued growth, Héroux-Devtek is ploughing significant investment into its operations, which span the Greater Montreal area (Longueuil, Dorval, Laval and Rivière-des-Prairies) Kitchener and Scarborough, Ontario Arlington, Texas and Cincinnati, Ohio. For FY2007, the company invested close to C$30 million FY2008 is budgeted at nearly C$40 million. In FY2009, it will invest a further C$30 million.

Of the three-year, C$100 million investment, C$40 million is being directed at Quebec, where the government, through Investissement Quebec, has agreed to provide financial assistance in the form of a C$8.8 million interest-free loan. These funds will allow Héroux-Devtek to adopt new technologies, increase the capacity of its plating vats to handle larger parts, develop new plating tools and computerise its processes.


For the aerostructure division, says Labbé, Héroux-Devtek's goal "is to build a company here to not only manufacture highly complex components, but to eventually provide design services like we have in our landing-gear business". Not yet a supplier to Airbus, Labbé says "that is something we'd like to develop over time" as the company further extends its reach beyond the North American market.

In addition to its plans for organic growth, Héroux-Devtek -which acquired Texas-based Progressive in 2004 -- is looking "to continue to grow through acquisition", says Labbé.

The company faces some challenges, however. "In light of the continued strength of the Canadian dollar toward the US currency, we must continue to improve or make productivity gains to maintain our competitiveness," says Labbé.

Finding skilled labour is another issue of concern. A grant of C$1.8 million from Emploi-Quebec will be used towards a new training plan at the company. This grant will be triggered by Héroux-Devtek's own investment of C$5.1 million in training.

"We believe we have a good business plan to face that and we will go forward and implement the business plan," says Labbé.

Canadian aerospace traditionally punches above its weight.

Source: Flight International