Mega Corp.

www.megacorpinc.com / HQ: Albuquerque, N.M. / Employees: 150 / Specialty: Heavy haulage equipment / Jim Kunz,
president: “We can sell to construction and mining dealers around the world, yet we are small enough to pay attention to the details.”

The Long Haul

mega corp. is meeting international demand for product
by expanding into new markets. by brooke knudson
since 1976, mega corp. has con-
tinued to add new products
and increased its internation-
al business sales.

Jim Kunz knows the power of a
good business relationship. As presi-
dent of Mega Corp. Inc. – the
Albuquerque, N.M.-based construc-
tion and mining equipment manu-
facturer – Kunz sees first-hand how
maintaining OEM partnerships can
be beneficial in uncertain economic
times.
Despite a floundering economy,
2008 was a strong year for Mega Corp.
“Our revenues are about five times
what they were five years ago,” Kunz
maintains. Solid OEM partnerships,
increasing international demand for
equipment and the ability to create
low-volume, highly specialized prod-
ucts has been the saving grace for the
company in the past five years.
Mega Corp. caters to OEM dealers
worldwide, including Caterpillar,
Komatsu and John Deere. Dealers, in
turn, sell product primarily to surface
mining and large construction con-
tractors. Larger haulage equipment is
typically purchased outright, while
smaller haulers are rented.
“We look for niche products that are
in the general category of construction
and mining hauling and are something
that we would produce less than 50
units per year,” Kunz explains.
“We look for lower volume and
more customization, where our spe-
cial features can command the mar-
ket. These are the things that [OEMs]
want to add to their portfolio.”
Founded as Magnum Industries in
1976 as a manufacturer of construc-
tion and mining equipment, the
company evolved into an auxiliary
equipment manufacturer. In 1983, its
name was changed to Mega Corp. to
more accurately reflect its business
markets.
Kunz joined the company in 2001
as vice president of operations. With
more than 16 years of experience in
new product development for
Komatsu and also with Caterpillar,
the transition to Mega Corp. was
smooth, he recalls. Four years later,
Kunz became general manager and in
2006 was promoted to president.

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Making Transitions
Mega Corp. intends to continue to
grow business through the introduc-
tion of new products. Working in
conjunction with OEMs, Mega Corp.
has steadily added to its product line,
which now includes coal haulers,
equipment trailers, specialty dumper
bodies, tailgates, articulated truck
conversions, scrapers, and portable
tanks and truck chassis.
“We can sell to construction and
mining dealers around the world, yet
we are small enough to pay attention
to the details,” Kunz notes. “Our peo-
ple have a lot of experience building
this product and that is the most valu-
able asset that we can have.
“That is our advantage in the mar-
ketplace and it goes hand in hand
with our niche business model. There
is nobody that is just like us in the
world that matches up against our
broad product spectrum.”
New Markets
In the last several years, Mega Corp.’s
construction equipment sales have
been largely dependent on the trends
of the residential and commercial
construction market. Although
domestic sales have leveled off, inter-
national business is becoming a sig-
nificant source of revenue. “Our
exports exceeded our domestic busi-
ness this year, so we responded by
finding partners overseas that could
increase our capacity,” Kunz says.
“Our business has become increas-
ingly global.”
Because of the robust international
construction scene, Mega Corp. has
established three licensed contract
manufacturers in South Africa and
Mega Corp.
South America – including Columbia
and Chile – and will pursue ventures
in Europe and Australia in 2009.
“These products are very large, and
the sea freight costs are based on the
size of the product,” Kunz explains.
“We pay for how many cubic feet
we are moving. So, a product that
might cost $150,000 might add on
$50,000 in shipping alone from say
Albuquerque to Chile. That’s a signif-
icant portion of the total price in the
end. There is a lot of pressure to
locate the manufacturing closer to
the destinations where they’re going
to be used.”
Mining commodity price increases
have meant strong sales for Mega
Corp. “2008 was a record year for rev-
enues and was the sixth consecutive
year of increasing revenues in a row,”
Kunz maintains. “Our business has
E CONOMY
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Mega Corp.

comes directly from the dealer or

to control dust on the job,
water spray equipment is
becoming a high-demand
product line for mega corp.
changed profoundly this year. After plex, Mega Corp. is required to devise
watching construction machinery components that align with the more
dominate our build schedule for the technologically advanced systems,
past several years, we experienced a including hydraulic systems or
180-degree change to virtually all sophisticated electrical controls in
mining equipment.” the operator cabs. “[Dealers] do not
have as many sophisticated techni-
Work With the Trends cians as they once did, so the dealers
In addition to the volatility of the expect more of a plug-and-play prod-
markets, Mega Corp. has also adjust- uct, and they want us to come up with
ed to the needs of its end-users, it,” Kunz notes.
which are sometimes dictated by Buyers are also using newer vehi-
E CONOMY
OEM, Mega Corp. employs seven
engineers devoted to product devel-
opment, as well as outsources some
engineering services. Once enough
interest is generated for a new prod-
uct, Kunz says, it doesn’t require
high-volume demand for the compa-
ny to begin production. “If we feel
there is enough of an interest, we’ll go
ahead and put it on the list,” he says.
A typical engineering project lasts
between one and three weeks, with
larger projects taking between one
and three months. Almost every
order has some form of engineering
associated with it, according to Kunz.
“Because our equipment is highly
customized and because the pace of
change in the mining and construc-
tion industry is so great, [OEMs]
come out with something new almost
every two years,” Kunz says.
Kunz describes its manufacturing
facility as a “very traditional shop,”
without a lot of automation, where
products are built one or two at a time
and the minimum lead time from
order entry is 90 days. The 62,000-
square-foot shop is outfitted with
cutting machines, press brakes, steel
rollers and cutting shears and a blast
and paint area. Depending on the
type of equipment, Mega Corp. will
ship out a complete machine or sell it
as a kit where it can be installed on a
truck once delivered.

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environmental regulations and cles in their applications. “If you look It also manufactures components
increasingly complex technologies. 15 years ago, the majority of the such as the water spray system, hose
Several years ago, infrastructure equipment would have been on a assemblies or operator controls. “We
contractors found auxiliary equip- used truck, and now that truck is have a general philosophy to build as
ment such as water haulers was a con- new,” Kunz says. “90 percent of the much of that as we possibly can and
venience. Today, using this equip- machine is being combined with not outsource if we don’t have to,”
ment is almost a requirement, Kunz something new, because it’s likely to Kunz notes.
says. “Environmental laws require be more productive and comply with Although involved heavily in the
dust control on almost every job site, the latest emissions laws and envi- manufacturing process, Mega Corp.
so what used to be something nice to ronmental regulations.” is primarily a fabricator. Water
have is now essential. That’s caused a pumps, steel plates, tube pipe, hard-
lot of people to pay attention to the Engineering Expertise ware fittings and electrical compo-
availability and productivity of their Mega Corp. employs seven engineers nents are a few of the items the com-
water-hauling equipment.” on its 150-person staff. Although pany purchases from a handful of
As machines become more com- most direction for new product specialty suppliers.

manufacturing-today.com WINTER 2009