Kamesh Chivukula says Algonquin is the only company to produce a new
type of transformer wire.
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Issue Date: 8/15/2002, Posted On: 8/15/2002
Algonquin president is wired about new product
Chivukula sees huge potential in production of transformers
JOhn Pike
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GUILFORD, Conn. � Kamesh Chivukula is hoping a new high-tech product will power up Algonquin Industries to a new level. Chivukula, 41, is president of privately-held Algonquin, which is based in the New Haven area. The 117-employee company manufactures wires used in such things as large electrical transformers. Utilities and others use these to adjust voltages up or down in homes and factories or power-distribution systems. Chivukula is also a member of the board for Algonquin's holding company, Rea Magnet Wire Co. of Fort Wayne, Ind., which purchased Algonquin in 1984. According to Chivukula, Algonquin is the only company that produces a new type of transformer wire. While acknowledging the manufacture of this new product is only a small part of Algonquin's business, he said it has a huge potential. Algonquin owns the patent to the world's only polymer-coated magnet wire that is being used commercially, he added. "It is a pretty exciting thing." Algonquin acquired this product when it purchased an Ashland, Va., plant in the 1990s. Magnet wire gets its name from the electro-magnetic field that is created when electricity flows through it. "It will shake up all existing technology," said Chivukula who grew up in Visakhapajnam, on India's southeast coast. "It is a superior product" that is more efficient than anything else on the market, he said. Algonquin may license out its technology in the future. "Although it is designed to compete with existing technologies," said Chivukula, "it takes a while for manufacturers to accept it. Makers of transformers cannot easily change their design." ABB, a Switzerland-headquartered company, buys more of the polymer wire than anyone else. "Initially the cost is more," said Dwight Schmoeger, a senior buyer for ABB, adding that it is less expensive in the long run. "It allows for a reduction in the amount of material required in other aspects of the transformer. It is also more efficient and a higher quality than what it replaces, the paper-taped wire." "The polymer-coated wire will definitely become more popular, "said Schmoeger. "There is nothing now I see that will replace it." Regardless of the success of the new technology, Algonquin and Rea are still prominent players in the wire-manufacturing business. Rea is the fourth-largest magnet-wire manufacturer in the world, said Chivukula. And Algonquin's Guilford plant is the largest for a particular product, fiber-insulated magnet wire. Chivukula said the plant in 2001 produced 38 million pounds of wire, up from 18 million pounds in 1990. In 2001 it had between $55 million and $65 million in gross sales. This may decline by 10 percent in 2002 because of the recession. Last year Algonquin spent $1 million on research and development. Its customers include General Electric Co., Siemens AG and Schneider Electric. Having worked for Algonquin since 1989 and serving as its president since 1996, Chivukula has been instrumental to its growth. "I am having a lot of fun" running this company, said Chivukula, who earned an undergraduate degree from St. Stephen College in India, an economics degree from the Delhi School of Economics in Delhi, and a master's degree in business from Yale University in New Haven. At this point, Algonquin � which started in 1969 � maintains an efficiency that even companies that pay much lower wages cannot compete with, Chivukula said. For one, he said, his Guilford plant produces wire at a lower cost than a competitor's plant in Mexico. "We are more efficient," he said. "We also modify the equipment better, are more organized, and provide superior management." That not only applies to the Mexican manufacturing center, but also to American plants, he said. "The Guilford plant produces 50 percent more wire per employee than our closest competitor," said Chivukula. "We are the low-cost provider. We have an extremely lean and productive operation." The Guilford plant has an employee turnover rate of about four or five annually, said Chivukula. In addition to manufacturing wire, Algonquin also makes the core for fiber-optic cables, which others actually manufacture. Chivukula said China may become a big customer for these telecommunications cables. Although wires may not be the sexiest of products, it is companies like Algonquin � and individuals like Chivukula and his fellow employees � that power the high-tech products that enrich our lives. So, in that sense, Kamesh Chivukula is in a very sexy industry.