Hollywood firm's generic parts have transformed an industry

A little-known Hollywood company is revolutionizing the aviation industry by making generic parts for jets, racking up record sales, profits and stock gains along the way.
Heico Corp. copies the unpatented parts that aviation giants GE and Pratt & Whitney make for their jet engines. It obtains certification from the Federal Aviation Administration that each part is safe. And then, it sells the certified generics at deep discounts, generally 25 percent cheaper than the name brands.
Airlines and jet repair centers love Heico for the savings. Germany's Lufthansa Technik, the world's largest independent repair outfit, invested $50 million in the business about a decade ago. And Heico has alliances with such airlines as American, Delta and United to sell them its existing inventory and work on developing the most expensive parts that it has yet to produce.
Business is booming, with sales and profits growing at about 20 percent a year. Last fiscal year, sales reached $392 million and profits $32 million. The share price on the New York Stock Exchange jumped 50 percent, validating the efforts of the Mendelson family that holds a controlling stake and has run the company since 1989.
The company must integrate new units as it acquires businesses worldwide. Since 1996, Heico has bought about 28 companies, most of them with annual sales in the $10 million to $20 million range.
Managers also must think globally. More than half of Heico sales already are outside the United States, and opportunities abound in China, India and other emerging markets.
24/02/07 Doreen Hemlock/South Florida Sun-Sentinel, US

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Categories: foreign feb 2007, New feb 2007