Fiber Optic Machine Maker's Fast Growth Likely To Slow With Defense Cuts


By MARA LEE, The Hartford Courant


Six years ago, when Nufern had 71 employees, the fiber optic and laser machine manufacturer's president was selling a vision of expansive growth to venture capitalists and to the state's own venture capital arm, Connecticut Innovations.

Martin Seifert told The Courant in 2007 that he hoped to have 250 employees by 2009. Instead, the company which had grown to 80 employees had to cut about 20 at the beginning of that year.

Seifert blushed as he was reminded of his ambitious prediction.

"IPG took more of the segment than we expected," Seifert said, referring to an Oxford, Mass., manufacturer that has 1,500 employees worldwide. "He's grown spectacularly."

But probably the main reason that Nufern hasn't added workers as fast as he'd hoped, Seifert said, was the change in ownership in 2008, when Rofin-Sinar Technologies Inc. bought the firm.

Rofin, which has dual headquarters in Germany and Michigan, requires certain profit targets from the Nufern division. To keep pace with the expectations of a company that is providing stockholders annual profits in excess of 30 percent, you have to keep a tighter rein on costs.

"You just can't grow at the spectacular rate" that you could when you were venture-capital backed, Seifert said. Then, he aimed to either barely be profitable, or to spend ever so slightly more than the company earned.

"I absolutely don't mind we aren't at 250 [employees]," he said this week. "We're a highly profitable division of a corporation."

Nufern has been adding people again ever since late 2009. It couldn't hire back many of those it laid off, because they'd found other jobs, but by the end of 2012, it had reached 95 workers, and as of this week, it had 153 employees, and four open positions.

Nufern's revenue grew by almost 30 percent in fiscal 2012, and the need to increase production to meet that demand led to a $12 million equipment and building expansion in East Granby.

Seifert expects growth at about half that rate this year, because of defense budget cuts. Hiring, too, will be about half as rapid, he projected.

Rofin added 40,000 square feet to Nufern's 60,000-square-foot building, and that addition opened a year ago. Rofin paid for $8 million of the expansion, and the state loaned the company $4 million at 1 percent — $3 million of which will be converted to a grant from the state if Nufern reaches 329 employees by 2017.

Seifert said Nuvern will apply for $1 million of it to be forgiven within a few months, since the company needed to add just 34 jobs to qualify for that first stage of loan forgiveness.

Rofin didn't need the state's $4 million to cover the investment — but Seifert said Connecticut offered the money to be competitive with other states that hoped to capture some of the company's growth.

Seifert said the fiber optic business — about a third of what the Connecticut factory produces — could not move, but the laser business, and especially the defense business, would be quite easy to relocate.

Nufern recently bought a small Maryland company that made tiny coils of intricately wound fibers that are used to make replacement gyroscopes for intercontinental ballistic missiles. Each coil, which takes a worker eight hours of nearly uninterrupted work to make, ends up looking like a yellowing roll of cellophane tape. In reality, it's 21 kilometers, or about 13 miles, of fiber, each the width of a human hair. It sells for $10,000.

Just two of the coil winders transferred to Connecticut, and the company is looking to hire another detail-obsessed, nimble-fingered winder. The intense jobs pay quite well, substantially above the standard laser machine assembler starting pay of $20 an hour.

The $4 million loan wasn't the first time the state had invested in Nufern. Connecticut Innovations bought a stake in the company in 2005 for $750,000 at the same time the Connecticut Development Authority loaned it $1 million. The state loaned the company another $151,427 in 2007 through CI.

CI profited handsomely from its investment, making more than $2 million between interest payments and the value of its shares at the time of Rofin's purchase. The CDA loan was also paid off at the time of sale.

But the folks finding jobs at Nufern as it expands again are the big winners.

Neil Zommer, 37, of Canton, joined a second shift a year ago from a factory job making films and vinyls, where he worked in clean rooms, which are also used in fiber manufacturing. This job pays him about $5 an hour more.

"The contracts that Nufern gets are pretty amazing," Zommer said, grinning.

Nufern's products are in the Mars Curiosity rover. They're used for lasers that work like radar or sonar, that help your car parallel park itself, that measure landscapes for oil prospecting, and that will be used as self-driving cars come into the market.

The laser radar uses a light source as strong as a stadium light, but it pulses for just four nanoseconds, invisible to the human eye.

More mundane — but a big moneymaker, just the same — are laser machines that engrave auto parts, the back of cell phones and more. About 70 percent of those machines are exported to China, where most consumer electronics are assembled.

Seifert said the biggest challenge to the business are export controls on new technology to China, because China is rapidly improving its own laser machine building capacity, and the only way to keep market share is to keep innovating.

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