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Darex hones its success bit by bit

Ashland firm's drill sharpeners have sales edge

ASHLAND -- Darex's Drill Doctor is getting a new big brother, and a pair of smaller siblings also are on the way.

A year after spinning off production of its Drill Doctor into a separate but related company, the success story continues for the Ashland manufacturer.

Darex Professional Tool Corp., the company launched to produce and sell the Drill Doctor, and Darex Industrial Corp. combined to do an estimated $20 million in sales in 1998 and both companies are expected to release new products this year.

The Drill Doctor, a drill-bit sharpener sold mainly to small machine shops, produced an estimated $12 million in sales in 1998 -- double what it did in 1996, its first year.

The two versions, one that does bits that are three-quarters of an inch and smaller and one that does bits a half-inch and smaller, are sold primarily through van dealers such as Snap-On Tools and MacTools to auto repair shops, body shops and the like.

The $20 million in combined sales represents about a 35 percent increase from 1997 and comes on the heels of 50 percent growth the year before. Each of the two companies employs 60-65 workers.

Dave Bernard, chairman and chief executive of both companies, said the growth is expected to continue this year.

In the U.S., there are two million drill bits produced every day, says Bernard. That means there's that potential for bits to be sharpened. It's a big market.

The market Darex will target this year includes home handymen looking for a smaller, less expensive sharpener than the Drill Doctor, and commercial customers searching for a sharpener that's a step above it.

Though the products are still in research and development, Bernard says Darex hopes to offer two sharpeners to consumers -- one in the $60-$70 range and one in the $20-$30 range.

Those home products will come from Darex Professional Tool Corp., which does the design, assembly and marketing of the Drill Doctor in a 12,000-square-foot building on Tolman Creek Road.

Production on the company's first new industrial sharpener in two years -- the V-190 -- begins Wednesday at Darex Industrial, the 40,000-square-foot space at the company's original location on Hersey Street.

The V-190 is designed for heavier use than the Drill Doctor and lighter uses than the company's other four industrial sharpeners, which it sells to large manufacturers worldwide who sharpen up to 500 bits a day.

We think there are a lot of people who have bought the Drill Doctor that will step up, says Gary Varney, president of Darex Industrial. They will like drill-bit sharpening and want a beefier machine.

The V-190 will retail for $798 -- middle ground between the two Drill Doctor models (which go for $159 and $199) and heavy industrial products that range from $1,100 to $5,998.

We just think there's a niche there, not only here but around the world, says Varney.

Darex does about half of its sales overseas and has sales agents in 32 countries. Varney said the V-190 should be more attractive in developing countries than higher-priced products.

The hope is that the V-190 will boost sales on the industrial side, which were off about 10 percent in 1998 to around $8 million.

We think some of (the decline) is connected to the popularity of the Drill Doctor, Bernard says.

In other words, we are competing with ourselves, adds Varney, who says the Asian slowdown also played a role.

— — Darex gets on cutting edge with employee benefits, too

When Annie King came to work for Darex Industrial Corp., she knew nothing about — electronics.

She was looking for a way to supplement the income she and her then-husband made from a — small Ashland market they ran.

But 13 years later, King spends her days assembling the electronic components for — Darex's AP5000 -- the company's top industrial drill-bit sharpener that retails for nearly — $6,000.

It's an awesome company, says King, 53, who began relying on Darex as her — sole support when she and her husband divorced and sold the market. It's helped me — raise three kids.

King is one of many workers with high praise for Darex, which has been rated Southern — Oregon's best place to work by Oregon Business magazine three years running. The company — was ranked 19th statewide last year and is expected to garner another high rating when the — magazine publishes its annual list in March.

From more employee control and flexible shifts to high annual profit-sharing checks, — employees rave about Darex's approach.

The company's profit-sharing has attracted the most attention. While base salaries are — similar to other manufacturing businesses, employees get thousands each year in bonuses. — This year's profits haven't been calculated yet and company officials declined to — speculate on the bonuses.

Dave Bernard, who runs both Darex Industrial Corp. and its spinoff Darex Professional — Tools Corp., says there's little question that the profit-sharing has been a big part of — the company's success.

We've created business owners of every employee, he says. We attract — really high-quality people, which makes it an even better place to work. It's an upward — spiral.

The company also offers a number of perks other than the bonuses. It's paying for — 21-year-old machine repairman Bill Christensen to attend a business computer application — class at Southern Oregon University.

Just two years after starting at Darex, Christensen will get roughly four weeks off -- — two weeks of vacation, a companywide four days off around Christmas and a week of personal — time, which includes sick leave.

For employees like King that have been with the company longer, there are other perks — like the paid two-month sabbatical employees get when they reach 15 years of service.

To start 1998, Darex reassigned its managers -- making the production teams accountable — to each other rather than a specific person. And employees say the system has allowed them — input they wouldn't otherwise have.

`You feel you're part of the company, says Christensen, an Ashland High graduate — who worked as a machinist in the Bay Area before getting on at Darex. What you say — has a real effect on the company.

He says employees regularly seek ways to save money -- and boost profits -- for the — company, from finding cheaper vendors to cutting the amount of time it takes to assemble a — sharpener.

The team approach has included accountability. King says that when there's a production — mistake made on an AP5000, the complaint is passed on to her team and it's assembly people — like her who call and make it right.

The team atmosphere even extends to the finances -- a point of secrecy in many — companies.

They don't hide the numbers, everything is out in the open, says — Christensen. We all know our gross sales and our bottom line.

Annie King, an assembler at Darex, has worked for the Ashland company for 13 years. The drill bit sharpeners King and her co-workers put together have proved highly successful. - Photo by Jim Craven