Jason Industrial Inc. and Megadyne International S.r.l. have consolidated their businesses to form a larger global belting operation with a long reach.
The two rubber and urethane belting manufacturers have created a holding company, Megadyne S.r.l., to control the assets and stock of both businesses. Each firm will continue to operate independently, according to Philip Cohenca, president and CEO of Jason Industrial.
The privately held companies, with a strong working relationship that dates back to the late 1970s, will continue to use their own names, he said, but now have all the advantages of a big corporation with a strong worldwide base.
``I hesitate to use the word merger because it really isn't,'' Cohenca said. ``But we are now one company. We'll have a common parent and a much larger manufacturing, sales, distribution and service operation.''
Cohenca has been named to the board of directors of the parent firm and will continue as president and CEO of Jason Industrial. The companies didn't divulge financial aspects of the alliance.
Consolidating the two companies but allowing them to operate as individual businesses has tremendous advantages, he said. ``We will benefit from the additions to our product range and from (Turin, Italy-based) Megadyne's expertise in the manufacturing arena together with their engineering capabilities.''
Giorgio Tadolini, president and CEO of Megadyne International, said it was a critical point in his firm's history and that ``joining forces with Jason will allow our sales companies ... around the globe to take advantage of our partner's recognized leadership in the distribution of industrial products. This, together with Jason's wide product line, will soon translate into improved service to our customers worldwide.''
Both Tadolini and Cohenca said this is the right time to strengthen their ties by forming a partnership to reinforce their respective global market positions.
More products, a larger manufacturing base, more capacity and better service are what the consolidation is all about, said Cohenca. In addition, he pointed to advantages in the alliance, including its ability to purchase raw materials in larger quantities at better prices. Shared logistics, product lines, sales, engineering and marketing also are expected to boost the companies' market positions.
The two family-run companies are similar.
Established by Jacques Cohenca in 1958, Jason Industrial started off primarily as a distributor of belts and hose and built a line of warehouse/service centers in New Jersey; Chicago; Tampa, Fla.; Dallas; and Los Angeles.
It branched out into Canada in 1971, creating facilities in Montreal, Toronto and Edmonton.
In 1991, the company began manufacturing synchronous belts at its Greenville, S.C., subsidiary, Timing Belt Manufacturing Co. It later moved into Latin America and South America with operations in Mexico and Brazil.
Corrado Tadolini founded Megadyne in 1957, but it didn't begin manufacturing thermoset polyurethane belts until 1971. Since then it's opened a dozen manufacturing operations in several countries-including Italy, Germany, Spain, France, Poland and the U.S.-to make rubber and urethane belts and pulleys.
In mid-1993, the companies created a joint venture, Megadyne America L.L.C., in Charlotte, N.C., to produce open-end urethane timing belts for use in the robotics, garage door, industrial and sliding door industries.
In October 2004, the belt makers formed another joint venture, SJM Belting Co. Ltd. Located in China, that operation manufactures rubber V-belts, synchronous belting and raw edge belts.
Cohenca said each firm has its own factories that are operating near capacity, and expansions may be considered down the road.
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Players: Jason Industrial and Megadyne International
Plan: Firms have created a holding company to control stocks and assets for both, but Jason and Megadyne will continue to operate independently.