Military Strikes Could Add Fuel to Ceradyne’s Fire
No one likes war. But excuse Ceradyne Inc. Chief Executive Joel Moskowitz for talking shop in the context of current events.
“We saw most of the growth happen from 1999 to 2000,” Moskowitz said. “And there will be a very significant growth spurt for us from this year to next year, following Sept. 11.”
Much of Ceradyne’s work is comprised of ceramic armor for military applications, a market that had been growing well before the Sept. 11 terrorist attacks and the U.S. strikes on Afghanistan. In the three years ended June 30, the company saw sales grow 62.7% to $46.2 million. The company ranks No. 42 on the Business Journal’s list of fastest-growing companies (see page 26, related stories starting on page 21).
About 90% of Ceradyne’s military work is for the U.S. armed forces.
“The big increases in U.S. defense spending started in 1999 when certain elite ground troops determined they needed lightweight ceramic armor vests,” Moskowitz said.
This year, Ceradyne completed a $4 million expansion of its Costa Mesa production facilities for lightweight body armor for military ground troops. The expansion also is designed to produce diesel engine components. The company now has 285 OC employees and plans to bring that number up to 320 within a year.
Still, while Moskowitz said he anticipated the current Afghanistan attacks would open up “substantial markets,” there have been no major new orders as a result since Sept. 11, he said.
Apart from defense, Moskowitz attributed some of the company’s growth to its focus on ceramic orthodontic brackets marketed by Unitech, a division of 3M Co.
Earlier this year, Ceradyne licensed technology from a Ford Motor Co. subsidiary that’s used to form complicated metal components through a technique knows as sprayforming.
“All those products have been the engines of growth for the past 36 months and will continue to be the engines of growth in 2002 and beyond,” Moskowitz said.
In the Ford licensing agreement, Ceradyne hopes to gain an edge in manufacturing metal armored systems to supplement its lightweight ceramic armor products. Earlier this year the company opened an office in Detroit.
Ceradyne also opened its first office in China this year. The Beijing sales and marketing office is the company’s first in Asia. Ceradyne has been selling ceramics to China’s tempered glass sector for the past several years, according to Moskowitz.
Company officials are looking for stepped up demand in China for its products as the country introduces more modern building and automotive safety codes that specifically require tempered glass.
China’s government recently ruled that buildings over a certain height must have tempered glass. Already a common practice in Western countries, the new regulation is a first for China. n
