Valcom’s focus on strengthening its domestic supply chains is attracting increased attention as geopolitical tensions boost demand for high-performance military communications solutions.

There’s a Great Reception for Canadian-Built Antennas

BY PETER DIEKMEYER

The Trump Administration’s recent moves to end the conflict in Ukraine are raising hopes. Yet, as Canadian Defence Review went to press it was unclear whether belligerent parties would respect a partial ceasefire. European powers expressed concerns regarding the process, pledging increases in defence spending to help protect the continent. The mixed messaging signaled once again that defence buildups will likely continue deep into military supply chains, regardless of short-term developments on the world stage.

“Budgets continue to rise,” says Howard Tuffnail, President of Valcom Manufacturing Group, a designer and manufacturer of military grade antennas. “Demand for high-performance communications solutions is increasing in Canada, the United States and around the world.”

Tuffnail should know. Late last year Valcom was selected to supply the US Department of Defence (DoD) with Tactical/Manpack Near Vertical Incidence Skywave antennas. The equipment is designed to ensure optimal short-wave communications under conditions where traditional line-of-sight radios might fail by bouncing radio waves off the ionosphere.

“The robust connectivity facilitates troop movements, reconnaissance missions and secure communications in remote or challenging environments,” Tuffnail told CDR. “We expect to have the full order completed shortly and are currently negotiating longer term deals.”

70th ANNIVERSARY

The Tactical/Manpack order is just one of a slew of successes that Tuffnail and Valcom Manufacturing Group have logged since he first came onboard to help Jim Estill acquire Valcom in 2023. “It’s a big responsibility,” says Tuffnail. “We run a 100% Canadian owned company that will be celebrating its 70th anniversary this year. That includes a long tradition of supplying the Canadian Armed Forces. Building that relationship will be our number one priority.”

Demand for Valcom’s custom fabrication and assembly of power conditioners and remote electronic data collection platforms, and repair and overhaul of land tactical communications equipment is also expected to increase in Canada, which has been under intense pressure from the U.S. to boost defence spending to 2% of its Gross Domestic Product. Those pressures have increased to unprecedented levels in recent weeks amidst the onset of a Trump Administration which is fixated on cutting America’s trade deficit with Canada.

RIVER CLASS DESTROYERS, POLAR
ICEBREAKERS & OTH RADARS

Tuffnail brought to the table more than 30 years of finance, operations and leadership experience when he began at Valcom as Estill moved to acquire the business. But transitioning into the defence industry meant learning a whole new range of best practices. “I thought the IT world had a lot of acronyms,” he jokes. “I quickly learned that much of the lingo related to the Internet came from the defence industry itself.”

A first priority was to solidify relationships with Canadian government procurement officials. “There are many constants in business that repeat as you move between industries,” says Tuffnail. “These range from the need to provide a unique value proposition, to managing people to running tight information and control systems. However, the defence industry has its particularities.”

Tuffnail cites the ability to adapt to longer-term government procurement cycles that are inherent in programs such as the River Class Destroyers, the largest contract in Canadian history and a Polar Icebreaker being built by Seaspan (both under sub-contract to L3Harris), as a key challenge to navigate. “We have got our antennas up regarding opportunities to contribute to both programs,” says Tuffnail. “We continue to expand our workforce, particularly engineers, but also production and technical support personnel to fulfill existing mandates. However, we will need to pick up the pace even more as new orders come in.”

Valcom got great news in March when the Federal government announced a formal order for three of the River Class Destroyers, which will be built at the Halifax Shipyard just prior to calling the upcoming federal election. Soon after the government announced that a second Polar Ice breaker would be built by Davie Shipbuilding in Levis Quebec.

Growing demand for over-the-horizon radars to monitor possible missile attacks coming in over the Arctic, to be installed in four massive sites that will be built in Canada and the U.S., represents another opportunity. Valcom officials are currently studying a Request for Information which has been issued related to key elements in this potential $6 billion multi-year program.

Tuffnail has also made a priority of working with the Canadian Commercial Corporation which negotiated the successful government to government Tactical/Manpak antenna contract. Canadian Commercial Corporation and agents based in Taiwan, Japan, Turkey, the U.K., France and other promising markets are key to helping boost Valcom’s exports which currently account for about 40% of its revenues.

BUILDING COMPETITIVE ADVANTAGE

Valcom’s 30 employees, who operate out of a 55,000 square foot production facility based in Guelph, Ontario, also serve a diverse industrial client in fields ranging from aerospace, to automotive, and electronics. These enable the company to navigate the complex military procurement cycles which account for approximately 80% of its production.

Valcom’s priorities during the coming months will include building on the company’s existing competitive advantages through investments in research and development, and rebranding Valcom’s identity to better reflect its transitions. Further developing Valcom’s domestic supply chains, which have been a key selling point during a time of global uncertainties will also be key. “We saw during covid with the shortfall in personal protective equipment how vulnerable Canada can be to changing international circumstances,” says Tuffnail. “We need to find ways to make sure that does not happen again.” To accomplish these admittedly broad objectives Tuffnail has been adjusting his management style to better accommodate Estill, Valcom’s new owner, who is a serial entrepreneur, podcaster, and manager that has written extensively about time management. 

“I thought I was efficient,” jokes Tuffnail. “But Jim takes it to the next level. We have three 15-minute meetings a week. I have to really drill down on key issues, so I make the most effective use of his time, because he has a lot of other obligations.” The duo balances the “all business” operational meetings by discussing longer-term strategic issues during the 30 minute walks that Tuffnail and Estill take together on Saturdays.

The two-man team will have a lot to talk about during the coming weeks. For example the recently declared federal election is expected to throw wrenches into almost all military procurement cycles as government procurement officials generally maintain a steady neutral approach during campaigns.

Continued uncertainty regarding how Canada’s growing trade war with the United States has exacerbated exceptionally fluid environment. “Crisis creates opportunity,” says Tuffnail thoughtfully. “Entrepreneurs, particularly small businesses with flexible management teams are often the best positioned to take advantage. That will be a key focus going forward.”

Peter Diekmeyer is CDR’s Quebec Bureau Chief