Altek Inc., a Liberty Lake-based contract parts manufacturer, says it has launched a new strategy to pursue contracts to make entire products for customers, rather than just parts.


Last month, Altek began manufacturing water purifiers for Pure Health Systems Inc., of Sandpoint, and it also recently has signed an $8 million contract to make DVD and CD cases for a large media-case company.


Michael Marzetta, president of Altek, believes the shift will boost the longtime companys $25 million-a-year operation and help protect it from stiffening U.S. and overseas competition. Altek, which employs about 175 workers here and another 15 at a smaller plant in Clackamas, Ore., has provided plastic and metal parts to manufacturers since 1980.


We hope over time that we can move up the food chain, says Marzetta. Were developing the capabilities to become a full-service contractor. Instead of the nuts and bolts of a product, we can offer the finished product.


Altek took its first step toward that goal by signing a contract with Pure Health Systems to make that companys recently developed office water purifiers, which are intended to replace conventional office water coolers.


Marzetta declines to discuss the terms of the contract, but says the relationship will last as long as it makes sense for both companies. As part of the agreement, Pure Health Systems is given office space for several of its employees at Alteks 100,000-square-foot plant at 22819 E. Appleway.


Pure Health Systems employees work with Alteks employees during the assembly process to ensure quality, to fix problems, and to answer questions.


Were selling our services to them for a flat rate, Marzetta says. We supply plastic and the contract assembly labor. They supply the chain management for the sub-assemblies. Its not a traditional service model. Were able to work in creative ways. Usually in a partnership like this the two parties are separated by a building, or states. Were under the same house. Its interactive, which increases speed and efficiency.


Says Craig Story, president of Pure Heath Systems, Were expecting a high quality product. Its a major partnership in the perfect spirit of cooperation. It has been a great partnership so far.


Altek and Pure Health Systems made about 500 water purifiers in April during the first month of the arrangement. The Sandpoint company initially plans to lease the purifiers to businesses for $40 to $70 a month.


We hope to make 8,000 by the end of the year, says Story. Within the next eight months were also going to develop a smaller residential model. Were going to sell those at big box stores.


Pure Health Systems says it decided to work with Altek primarily because of its operation here.


We wanted to keep the manufacturing here in the U.S. because were seeing all sorts of ramifications from offshore manufacturing, says Story. There is one component in our water purifiers that comes from Chinathe water tankand were having problems with delivery.


In the past, Altek primarily has served customers in the Northwest, but now hopes to earn business internationally, Marzetta says.


Were hoping to go after the small to midsized manufactures, and fill a niche, he says.


Marzetta says changing Alteks operations to become a full-service contract manufacturer will take about two years.


Marzetta says Altek also recently agreed to make DVD and CD cases for the big media-case company, though he declines to name it. We hooked up with a big fish and reeled it in.


The Clackamas facility will produce the DVD and CD cases starting this summer, Marzetta says. Were ramping up for production there for high-volume applications.


The company plans to its double work force in Clackamas.