BY CLAIRE SERANT

When the price of coal fell in 1986, Product Resources Inc.’s mining capital equipment business was nearly crippled and the company almost closed its doors.

But instead of giving up, executives at the Beverly, Mass., EMS provider decided to revamp their business model, agreeing that it was no longer necessary or wise, to have 80% of the company’s business tethered to the industrial market.

“We moved on to other projects,” said Peter Kellett, Product Resources’ co-founder and president. “It was a wake-up call for me.”

Today, making assemblies and components for semiconductor suppliers comprises about 45% of Product Resources’ business. Pharmaceuticals constitute another 30% of the company’s sales, while its exposure to coal mining equipment/industrial equipment has been scaled back to a healthier 25%.

Product Resources’ 1986 scare put the company on the right track, Kellett said. “We’re not married to a single industry anymore,” he said. “If we lose a major customer, we won’t be lost.”

Last year the 22 year-old company, which has 38 employees, tallied sales of $8.3 million, mostly from New England-based OEMs. Product Resources counts semiconductor maker PRI Automation Inc., Billerica, Mass., and semiconductor equipment maker Nexx Systems LLC, Wilmington, Mass., among its clients. The privately held enterprise hopes to achieve sales of close to $10 million in 2002.

Earlier this year, Product Resources landed a contract with Photovac Inc. to make a complex spectrometer that measures volatile gas compounds. The spectrometer was formerly made in Singapore for Photovac, but the company wanted the product manufactured close to its Waltham, Mass. Headquarters.

Product Resources prevailed over several larger EMS providers for the Photovac contract because of its deep engineering roots, according to David Mendel, the company’s director of sales and marketing.

Thomas Hennessey, Photovac’s chief operating officer, said, “We liked the fact that Product Resources was an engineering company before it became a contractor. Their engineering expertise will make them better able to troubleshoot problems.”

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