Abloy has the key to the lock industry
Montreal subsidiary rides security boom to double-digit growth

It's no secret that recent global events have invigorated the security industry. Almost any business that can make people feel safer has been doing well. These include marketers of surveillance cameras, alarms and guard services. Even basic industries like door lock manufactures have done well.

"We have had a string of good years," said Stephen Timmons, president of Abloy Canada Inc., which assembles and markets a premium line of door lock cylinders, padlocks and other specialized devices. "It started a few years before 9-11, but the terrorist threats kept it alive."

Abloy Canada, is a subsidiary of Finland-based Assa Abloy, a conglomerate that operates lock and security related businesses around the world. The Canadian division has had almost a decade of double-digit growth.

Much the company's success comes from its line of high-end products, which by most accounts are built tougher and work better than the low-cost imports found in conventional retailer outlets.

Abloy's most recognized product is its patented key design. It's an innovation that provides the company with almost complete control over who copies its keys, since blanks can only be bought from Abloy.

When a customer buys an Abloy lock, he fills in a registration form and provides a sample of his signature, which ensures that further copies can only be made with his authorization.

Typical applications for Abloy locks include the parking meter industry, hospital narcotics cabinets and other locales where access must be severely restricted. The consumer segment, especially higher value homes, is also a big market.

"People sometimes say that out locks cost a lot," Timmons said. "Bit when you compare that with the value of the personal belongings that most people have in their homes, it doesn't seem like that much anymore."

 

Abloy padlocks have also done well in recent years, especially among hydro-electric plants and railways which have been plagued by rising insurance premiums from accidents caused by people who have wandered onto their premises.

But according to one local locksmith patented keys are only part of Abloy's unique selling proposition.

"Their quality is unsurpassable," said Victor Brassard, of Prestige Security, an Abloy distributor. "When we started with them, we only had one truck. Since then we've grown to three stores and ten trucks."

Clients say Abloy's quality is due to its rotating cylinder system as opposed to the pin-tumblers used on conventional locks. The upshot is a more durable product that requires less maintenance.

"You can't pick 'em. And the twisting protective plate means that it's impossible to drill through them," said Greg Joss, a locksmith at St. Boniface Hospital in Winnipeg which has about 2,000 Abloy locks installed in its 15 buildings. "If you want to get by one of their locks you've almost got to break down the door."

According to one industry professional Abloy has managed to carve out a coveted niche in a competitive market.

"There are too many locksmiths, and the big box outlets have put pricing pressure with low cost imports," said Arnold Sintnicolaas, publisher of Canadian Locksmith magazine. "But Abloy goes after the big companies with high value products that have good mark-ups."

It's a strategy that has served Timmons well. He estimates that the Canadian lock industry generates $250 million a year in revenues, but the high security component is only about 10 per cent of that.

As a result Abloy Canada, with its 28 employees and $5 million in annual sales, is a substantial player in the $25 million high security niche. In fact its most direct competitors, Medico and Mul-T-Lock are also owned by the Assa Abloy group, which has been buying lock companies left and right during the past decade.

Timmons expects Abloy Canada's growth to continue in the double-digits for the foreseeable future but he isn't taking any chances.

The company is currently refining a line of electronic locks that will include many of the features of computerized card locks. These include a verifiable audit trail so executives can track who used which locks and when they used them.

 

 

Sidebar: Ensuring proper key control

Experts say that ensuring proper key control is a crucial part of maintaining an effective security system. One Abloy client, the University of Alberta provides a prime example, of what can happen when key discipline is relaxed.

During the mid-1990s many of the students staying at the university's residences began manipulating their room-key blanks so that they could get into each other's rooms. Worse, they also began duplicating keys and passing copies to friends and family members.

"Over the years all kinds of key copies were floating around and nobody kept track of them," said Brian Duplessis, the university's locksmith.

Soon thefts, vandalism and petty crime began to rear its head, but according to Duplessis there was little doubt what the real problem was.

"You can have the best made key in the world, but if you don't keep track of who gets copies, it's worthless," said Duplessis.

To solve the problem, the university was forced to change all of the locks on residence doors.

Today, students are given numbered Abloy keys, which cannot be manipulated nor duplicated. If students do not return their key at the end of the year, they are expected to pay the $150 replacement cost for a new cylinder. According to Duplessis, the system has worked like a charm.

"Companies should definitely look at non-duplicable key blanks," Duplessis said. "They solve a lot of problems."

 

 

Photo caption: According to Stephen Timmons, president of Abloy Canada, the company's patented key blank is a big part of its success because the system ensures that only authorized personal can make copies.

 

Fact Box:
Company Name: Abloy Canada Inc.
Web-site: www.abloy.ca
Products: High security lock cylinders, keys, padlocks
Offices: Montreal, Toronto
Number of employees: 28
Sales: $5 million
Phone #: 514-335-9500

 

peter@peterdiekmeyer.com

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