Ann Arbor-based LED display maker plans to double staff as revenue rises

It's an unusually late surge in momentum for a company that was founded in 2003 — but it's reflective of increased sales in the light-emitting diode (LED) market.

The company is also close to finalizing an investment of several hundred thousand dollars from the Michigan Pre-Seed Capital Fund, which is managed by economic development group Ann Arbor SPARK on behalf of the Michigan Economic Development Corp. and the state's 15 SmartZones.

Estrakon CEO Matt Shumate said the investment would help the company purchase new equipment and expand its sales and marketing efforts. He said the company is projecting $3 million revenue in 2011 and $9 million in 2012. That's up from $830,000 in 2010. The company also plans to hire about 13 new employees next year, up from 11 currently.

Many manufacturers are producing LED bulbs, but few are making animated and static lighting displays for the commercial market, he said. LED-powered displays last longer and use less electricity than florescent lighting.

Estrakon already had a strong position in LED displays for the beverage industry — with clients such as beer-maker MillerCoors — but the company is now securing new clients in other sectors, including automotive, wireless and home improvement.

"We have definitely sprouted outside the beverage world," Shumate said.

The diversification of its client base is powering the company's production expansion. Estrakon expects to produce between 14,000 and 18,000 units in 2011, up from 5,000 to 8,000 in 2010, Shumate estimated. The company's LED-edge products include lighting for point-of-sale devices, shelf lighting and architectural applications.

"Just about anything is switching over from fluorescent to LED lighting if it can," Shumate said.

The company's entire operation is currently based at a 10,000-square-foot facility on Varsity Drive — where Estrakon has room to grow.

"We are proud to say that our products are all made in Michigan," Shumate said. "We are doing all of the engineering and electronics design, all of the layout and prototyping and production and assembly all from our Ann Arbor facility."

He added: "What's really been getting us traction is all of our customers are pulling back from the amount of product they buy from overseas. Every week I'm asked if we are still producing our product in the United States and domestically and, of course, I say yes."

Shumate said producing LED displays in Ann Arbor is possible because outsourcing production overseas involves additional shipping costs, reduced quality and longer lead time. He said that for non-animated LED displays, clients often want a quick turnaround. Estrakon can deliver products in four weeks, while Chinese competitors take at least 12, he said.