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Tranax preps for growth, change
View a slide show of the conference.
 
Its conference was noticeably smaller, with only about 30 distributors in attendance. But Tranax Technologies Inc. said the intimate backdrop reflected a changing company perspective - one that focuses more closely on quality, not quantity.
The Newark, Calif.-based ATM and kiosk provider welcomed about 60 people July 12-13 to its new, 80,000-square-foot facility, which it opened in May. About three times the size of its previous facility in Fremont, Calif., the new facility's production area can support up to 200 machines per day, said Bill Dunn, Tranax's vice president of sales. The warehouse, about 30,000 square feet, holds about 3,000 machines.
 
 
 
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Dunn said the additional room "was always a big factor," since Tranax simply had too little of it before.

And as Tranax builds upon its foray into the self-service/kiosk arena, space, engineering and software will play critical roles, Dunn said. Having a facility that can support that growth has been paramount.

"We now have about three times more space than we did at the other facility, primarily for production and prep," Dunn said. "And we're focusing more on self-service now, which requires that we have more room."

While the ATM remains Tranax's core product, said president and chief executive Dr. Hansup Kwon, a move into advanced self-service offerings has set the tone for the future.

"On the one hand, we are staying in the ATM area," Kwon said. "But we're adding more self-service to our portfolio. In the long run, all of our products should be able to handle all types of transactions, whether the product is an ATM or a hybrid kiosk."
 
Photograph by Tracy Kitten
Tranax's new, 80,000-square-foot facility is located in Newark, Calif.

'Adapt, define, innovate'

Since the break from Seoul, Korea-based Nautilus Hyosung Inc. in January, both Tranax and Nautilus have struggled to separate their identities, with each releasing branded products and services it hopes will differentiate it from the other in the marketplace.

Up to this point, from a product perspective, the separation has been difficult to define, since Tranax distributed Nautilus products in the United States for nearly a decade.

Both companies now say they expect that to change. (ATM Marketplace will include in-depth information about Tranax's new product and servicing offerings in a follow-up story later this week.)


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Kwon spoke candidly about the impact the break-up has had on Tranax and its distribution channels - he said between 60 percent and 80 percent of Tranax's distributors since February have initiated direct relationships with Nautilus Hyosung. (Nautilus Hyosung opened its U.S. base near Dallas in June.)

"We do not say we lost them because we know they will come back," Kwon said.

He also was quick to point out that Tranax has moved on, with its own vision, products and services, since the break from Nautilus.

"I still hear a lot in the industry about the relationship we have with our former supplier," he said. "We are past all of that now. Our future is beyond that. It is our ability to adapt, to define and to innovate that makes us stand out. Our capability is what we hold on to. We need to make our business, our strategy and our vision a success first. If we do that, the product outcome from there will be a success."

'A vision to innovate'

Kwon was reluctant to give product-shipping estimates or any information related to the company's actual or anticipated annual sales, adding simply that if Tranax focuses on making its products and services successful, product sales will follow.

"We're not just focusing on market share," he said. "We want to have a long-term strategy for growth. We're not putting numbers first."

That perspective contrasts the company's message last year, when corporate heads were quick to point out that Tranax expected to deploy at least 500 self-service terminals in North America by the end of 2006.

Not commenting on whether Tranax met that goal, Kwon did say he is confident shifts in the market will necessitate a move to more functions, including bill payment and card dispensing.

"I can't give hard numbers, but the shift from the vanilla ATM to the self-service-capable ATM is something we see," he said. "There is a clear shift."

Responding to that shift is critical, Kwon says, and is one reason why Tranax has put a board of directors in place.
 
"We have a vision to innovate," he said. "That's why we set up the board."

The board includes corporate leaders who have experience in raising capital and building innovative businesses. Kwon said he hopes the board can help Tranax become a $100 million company.

"I needed more key people," he said.

Kwon also said Tranax is not "actively" pursuing outside investors, but it is possible the company will seek outside capital. Going public also may be discussed as an option for the future.

And international growth is already being pursued. Kwon would not elaborate about the international markets where Tranax has a presence, saying only that English-speaking markets are the easiest to break in to.

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