Nivarox: Top component maker pulls back the curtain

The smallest screw in the world is not at Nasa or Nagoya, but Nivarox, the Swiss precision engineering company whose parts form the heart of virtually every top mechanical watch.

Best known for balance springs, Nivarox FAR – to give the Swatch Group subsidiary its full name – is the near monopolist supplier of oscillators and escapements, the complex components that ensure mechanical timepieces can function. The remaining 10 per cent of sales derive from ancilliaries such as minute screws, pins and hour markers.

Production is to tolerances a fraction of the width of a human hair. That makes Nivarox’s manufacturing practices an eye opener, even in an industry renowned for its precision. The 38 pieces comprising, for example, the tourbillion of a complicated watch weigh just 0.118g – about the same as seven grains of rice. “When we talk about nano-manufacturing, we’re not joking,” says Pierre-André Bühler, chief executive since late 1999 and a 30-year Swatch Group veteran.

Typically for the watch industry, Nivarox’s figures are secret. Even its four plants are off-limits to all but approved Swatch Group employees. That is partly because of Nivarox’s market dominance. Its springs go not just to Omega, Breguet, Blancpain and other Swatch Group brands, but also leading independents, including names such as Rolex, Patek Philippe and Audemars Piguet, which are proud of their manufacturing independence.

The cornerstone of the business goes back to the formula for the “NI VARiable, NI OXydable” balance spring that lent the company its name. The group’s present form stems from the 1983 merger of Nivarox and FAR, another components maker. Both companies were products of consolidation: the oldest member goes back 157 years. In 1985, Nivarox-FAR was bought by a predecessor of Swatch Group – a fate that saved it from closure as output of mechanical movements slumped from 40m to 4m in the crisis years of quartz. Some said the factories should be shut.

Rather than losing decades of know-how, Swatch Group founder Nicolas Hayek kept the company alive by developing the first mechanical Swatch. “No one should ever underestimate the contribution of Nicolas Hayek to this industry,” acknowledges Mr Bühler.

Nivarox’s core competences are unrivalled. Rolex’s vast output has allowed it to develop its own spring production – but only for part of its range. More recently, Parmigiani, the small brand owned by the Sandoz Foundation, has benefited from massive spending to gain the same partial independence in springs. But no other low volume marque could have justified such investment commercially. That is because the technology behind springs is highly advanced, and the costs only justified by manufacturing in massive volumes.

The composition of the basic Nivarox material is now well enough known. But, “just knowing the ingredients isn’t enough. You have to master the manufacturing process too”, notes Mr Bühler at Fontaines, one of the group’s two spring factories where dozens of precision engineering machines laminate, grind and polish materials for springs and other parts.

Although some machines come off-the-peg, most are custom made, including elements developed entirely by Nivarox and the Swatch Group, says Mr Bühler proudly. “Swatch Group gives us the economies of scale to warrant the investment. Intense co-operation with the brands lets us share know-how to make breakthroughs. And being part of a bigger group provides access to precision engineering experts who’ve helped us improve our manufacturing processes further,” he adds.

Today, Nivarox makes 300 different springs. An unspecified, but dominant, proportion, go to Omega, Swatch Group’s biggest brand. Many others are for ETA, the group’s movements maker; further pieces go to third parties. Mr Bühler claims outside brands have no qualms about buying from Nivarox, in spite of it being owned by a competitor.

“It’s a case of industrialists dealing with industrialists,” he says. But why does Nivarox need two separate plants for springs, let alone four different factories in the region, when everything could be combined under one roof? “Imagine if there were a fire. Two spring lines provides security of production,” notes Mr Bühler.

Social factors are his second reason. While demand has spiralled – reflecting the health of Nivarox’s customers and taking its workforce to over 1,000 – suitable staff have proved ever harder to find. “Remember, most of our specialists are women. Having families makes them less flexible in terms of where they can work. This way, we can tap the labour pool in different communities.”

In spite of such constraints, expansion is on the cards. An empty lot at Fontaines will next year house a new plant. The building will not only provide more room for existing activities, but will also house what may be the next big technological leap: silicon. Quite how a material best known for microchips can be used in watches, let alone springs, is a tightly-held secret.

“Let’s just say silicon has properties that make it attractive,” says Mr Bühler. “It’s insensitive to magnetic fields and allows far greater geometric freedom.”

That opens the way to new and complex shapes in a material that is, moreover, lighter and harder than steel, needs no lubrication and is resistant to corrosion and wear. In a rare collaboration, Swatch Group, Rolex and Patek joined forces to sponsor silicon research at two Swiss labs.

The scientists have managed to overcome silicon’s inherent brittleness and moved to production.

Patek has announced limited use of silicon parts, while Breguet has unveiled two watch movements with silicon – one of them including the full “assortment” of escape wheel, lever and balance spring in the new material.

Mr Bühler warns against predicting silicon will replace conventional materials. For now, at least, he sees it as a breakthrough for top-end timepieces. But his new plant at Fontaines will ensure Nivarox is there to meet the demand.

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