Devon Brooks
Michael Nagy moved to Lumby just under 20 years ago to become a house builder.
Michael Nagy
Photo: Devon Brooks
“I moved from the coast and came up here to get out of the business.”
The business he was trying to get out of was rebuilding hydraulic cylinders. He didn’t succeed.
Shortly after he started to build homes he realized his old trade from the Lower Mainland was sorely lacking. “We saw a huge market in Lumby, a huge opening.”
After leaving high school Nagy started at a company that rehabilitated hydraulic cylinders.
He worked his way, doing almost everything from sweeping the floors to sales, until he and his wife Yvette decided to come to the Okanagan.
Pulled back into what he knew best, the results were electric. “It took off like wildfire, so I got back into the hydraulic business full time.”
Nagy came at the right time as logging was increasingly equipment dependent and almost every big piece of logging equipment used hydraulics. There were other companies already working the field, but Nagy says most of them weren’t up on the latest technology.
Rebuilding hydraulic cylinders saves a lot of money, and the bigger the cylinder the greater the savings. Nagy estimates the savings of rebuilding a cylinder runs from 40 to 75% of the cost of getting new equipment.
There is another saving, which is the down time. He explains, “Our business does really well because our turnaround is really, really good. Ordering in [new] can be a week, but we can turnaround [a cylinder] overnight or two nights.”
Another technological change has been the migration of cylinders from low pressure to high pressure units. Nagy says, “When things go, they go really quickly.”
When high pressure units fail they don’t go quietly. “The maintenance cost might have been $3,000, but a failure can run up to $70,000 for a system failure and rebuild.”
Pulled back into what he knew best, the results were electric. “It took off like wildfire, so I got back into the hydraulic business full time.”
Nagy came at the right time as logging was increasingly equipment dependent and almost every big piece of logging equipment used hydraulics. There were other companies already working the field, but Nagy says most of them weren’t up on the latest technology.
Rebuilding hydraulic cylinders saves a lot of money, and the bigger the cylinder the greater the savings. Nagy estimates the savings of rebuilding a cylinder runs from 40 to 75% of the cost of getting new equipment.
There is another saving, which is the down time. He explains, “Our business does really well because our turnaround is really, really good. Ordering in [new] can be a week, but we can turnaround [a cylinder] overnight or two nights.”
Another technological change has been the migration of cylinders from low pressure to high pressure units. Nagy says, “When things go, they go really quickly.”
When high pressure units fail they don’t go quietly. “The maintenance cost might have been $3,000, but a failure can run up to $70,000 for a system failure and rebuild.”
Taking apart a used cylinder Photo: Devon Brooks
From operating out of a small shop on the main street Nagy has expanded steadily. His sons now work in the business with him, and he says they do five year plans to figure out what to do next.
Five years ago they decided to expand and they built a new, large facility for $4 million. It allowed them to start diversifying their customer base and get in new equipment like a cylindrical grinder.
The equipment is a very important part of the company’s success. In earlier years Nagy says about 50% of their work came from other shops that brought in cylinders, but didn’t have the expensive equipment, or sometimes, the knowhow to do the work. He says 30 years of experience has given him a few trade secrets that his competitors would love to know.
Nagy says work from other shops only accounts for 10% of their workload because most customers realized it was much quicker, and cheaper, to deal with Nagy Cylinder directly.
With the new facilities and equipment all in place the next big decision is whether to build a satellite office elsewhere in the valley.
That’s another $2 million investment, which Nagy and family put off by buying a new truck to go and fetch in cylinders from important customers, but he says it is something he and his sons are keenly debating as they look at the next five year plan.
Partly that’s because Nagy Cylinder had a big scare last year. The woes of the forestry industry, their biggest customer for years is well known. The recession was terrible on Nagy.
Says Nagy, “Last year was the worst year since we opened.”
Several customers went under, others had equipment repossessed. For those that kept operating, older equipment was often mothballed, which is the equipment that provides work for Nagy.
Nagy credits the government’s stimulus spending with keeping him going. He got much work from working on Emil Anderson Construction’s equipment, which was used primarily on the Highway 97 expansion running from Vernon to Armstrong.
Nagy himself hit the streets drumming up new business, including the likes of Kelowna Airport. The airport does most of its cylinder rebuilding in-house, but Nagy now gets their overload. Nagy Cylinder is also taking on mining companies.
He says the worst is definitely behind them, and the fragility of the economy is now working in their favour. Companies aren’t willing to buy new equipment in case things turn sour again so they are looking to keep older equipment going longer.
“We see the next couple of years as good and we’re planning for it.”
Five years ago they decided to expand and they built a new, large facility for $4 million. It allowed them to start diversifying their customer base and get in new equipment like a cylindrical grinder.
The equipment is a very important part of the company’s success. In earlier years Nagy says about 50% of their work came from other shops that brought in cylinders, but didn’t have the expensive equipment, or sometimes, the knowhow to do the work. He says 30 years of experience has given him a few trade secrets that his competitors would love to know.
Nagy says work from other shops only accounts for 10% of their workload because most customers realized it was much quicker, and cheaper, to deal with Nagy Cylinder directly.
With the new facilities and equipment all in place the next big decision is whether to build a satellite office elsewhere in the valley.
That’s another $2 million investment, which Nagy and family put off by buying a new truck to go and fetch in cylinders from important customers, but he says it is something he and his sons are keenly debating as they look at the next five year plan.
Partly that’s because Nagy Cylinder had a big scare last year. The woes of the forestry industry, their biggest customer for years is well known. The recession was terrible on Nagy.
Says Nagy, “Last year was the worst year since we opened.”
Several customers went under, others had equipment repossessed. For those that kept operating, older equipment was often mothballed, which is the equipment that provides work for Nagy.
Nagy credits the government’s stimulus spending with keeping him going. He got much work from working on Emil Anderson Construction’s equipment, which was used primarily on the Highway 97 expansion running from Vernon to Armstrong.
Nagy himself hit the streets drumming up new business, including the likes of Kelowna Airport. The airport does most of its cylinder rebuilding in-house, but Nagy now gets their overload. Nagy Cylinder is also taking on mining companies.
He says the worst is definitely behind them, and the fragility of the economy is now working in their favour. Companies aren’t willing to buy new equipment in case things turn sour again so they are looking to keep older equipment going longer.
“We see the next couple of years as good and we’re planning for it.”
For other business stories in the Okanagan please visit us at www.businessexaminer.ca.
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