The story of how a tiny New Orleans medical equipment business made its way to Baton Rouge to become one of the world's largest makers of pouches that hold heart-monitoring equipment starts with a cookie company.
Jack's Cookie Co. to be exact. Leonard Carmouche was the controller there, first in Baton Rouge and then at the Charlotte, North Carolina, headquarters, until 1983 when Flowers Foods bought it. Carmouche moved back to Baton Rouge. He always had fashioned himself an entrepreneur. Now all he needed was a company.
By chance, Carmouche's brother James worked at Electro Medical Equipment, and the owner wanted to sell the New Orleans company to retire. The Carmouches and John Barton Sr., Leonard's former boss and the co-owner of Jack's, bought EME Medical. The company sold EKG machines and other cardiology equipment and supplies to hospitals and doctors in Louisiana.
Thirty-four years later, the only equipment EME handles are the machines it uses to make the disposable pouches and belts that hold heart monitors for adults and infants, disposable ice bags, and the knit caps hospitals place on newborns.
Roughly 75 percent of the company's revenue comes from manufacturing, with the remainder from reselling other products. The company sells worldwide, with 95 percent of its sales coming from outside Louisiana. EME's business is contract-driven. Its customers are largely group purchasing organizations, whose bulk buying power helps secure manufacturers' discounts for hospitals and health care providers.
"I wouldn't say that we're necessarily the world leader in everything that we do, but that's what we want to be," Leonard Carmouche said. "We have some things that are kind of coming together that make us very optimistic. I honestly believe that we could double our business in five years."
Carmouche declined to say what that means in terms of revenue.
However, Carmouche said EME produces 20 million to 30 million units — telemetry pouches, fetal monitoring belts, ice bags and knit caps — each year.
EME is the dominant player in telemetry pouches and makes five different models. A web search shows suppliers offer the pouches from less than $1 to as much as $6 apiece.
Although disposable ice bags are only a small part of EME's current business, the U.S. market is enormous — 100 million bags per month. Carmouche expects EME to increase its ice bag sales by well over 1,000 percent over the next five years.
EME doesn't dominate in fetal belts, but it's getting there, Carmouche said. The company has the capacity to make all of the belts for the United States. Advances in automation also will allow the company to drastically lower the cost to make its knit caps.
Doubling its business means EME likely will add 25,000 square feet to the 31,000-square-foot facility in Prairieville the company moved to in May. EME had been in three buildings on Industriplex Boulevard in Baton Rouge. It took two years and between $10 million and $20 million to develop the new facility.
EME is what Louisiana Economic Development refers to as "a gazelle," a company with high-growth potential, demonstrated revenue growth, annual sales between $600,000 and $50 million, and five to 100 employees.
The term was popularized by economist Milton Friedman in "The World is Flat."
"Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion, or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle, or it will starve to death," Friedman writes. "It doesn't matter whether you are a lion or a gazelle. When the sun comes up, you better start running."
Louisiana Economic Development Secretary Don Pierson said the agency tries to place the gazelles in the agency's Economic Gardening Initiative, which is free to participants. The agency pays a consultant to examine participants' market strategy and logistics, among other things. The consultants advise their clients on new markets or efficiencies.
The state agency likes to focus on manufacturers because of their strong multiplier effect in the economy, Pierson said.
For each manufacturing job, four employees are hired elsewhere, according to the National Association of Manufacturers, the country's largest trade group of manufacturers.
EME took part in the Economic Gardening program in 2016, estimating the help would add five jobs and $400,000 in revenue in a year.
Carmouche said EME is now poised for "explosive growth."
Neither explosive growth nor market dominance were a part of the picture when Carmouche and his partners bought the company.
They knew the equipment business was cyclical and wanted a steadier revenue stream. They turned to supplies and brought in Larry Gussman, now a co-owner, to handle those sales. Within a year, the company's market included Texas and Mississippi, and its office had moved to Baton Rouge. Within five years, EME had customers in every state.
By then, EME had built an office and warehouse on Industriplex. In 1991, the company moved into manufacturing with a blue foam telemetry belt.
The production process was not streamlined. EME bought the material from one company, paid another to laminate it, and a third to cut the material into the pieces that made up the belt. A company in Prairieville silk-screened EME's logo onto the pouch. Once all that was done, EME piled the parts — a fastener, a belt and a pad — into boxes and sent them home with its workers. The workers sewed everything together at night, packaged the belts and brought them back to work. The company paid by the piece. EME also had a couple of people sewing at home during the day.
General Manager Cydney Severio was one of the sewers. Piece work paid well. Carmouche said some people made more money sewing than at their day jobs.
"We weren't complaining … but you couldn't stay up all night and then come to work the next day," Severio said.
Production was about 50,000 belts a year, and demand quickly outstripped the workers' capacity. By 1993, EME had acquired two sewing machines and moved production into a vacant office at the Industriplex facility.
"We thought that was going to be our manufacturing center," Carmouche said, as he, Severio and Gussman burst into laughter.
"We weren't seeing real big. We didn't have a great vision. This is not Microsoft. This was a slow, real progressively improving process that continued on for the last 25, 26 years," Carmouche said.
In 1991, EME was still mainly a medical equipment company, with supplies smoothing out the peaks and troughs in revenue. But the way hospitals bought equipment was changing. The nurse managers, whom EME typically pitched, no longer had buying authority, Gussman said. Instead, hospital administrators made the decisions, and 10 or 12 years might pass before a facility ordered a new EKG machine.
EME's focus shifted to supplies and telemarketing sales for the next decade. At its peak, the company had 17 full-time telemarketers, selling to customers worldwide. During that time, the manufacturing side grew steadily. Eventually, manufacturing became the company's main focus.
Asked how EME managed to reimagine the company each time, Carmouche said it was a matter of survival.
"I mean, you don't have any choice," he said.
Severio agreed. "You have to move with the times, and if you don't, then you just get left behind," she said.
Carmouche said one reason EME has succeeded is that everything the company does is its main focus.
Some of its competitors have billions in sales. They might not even know they make products that compete with EME's, Carmouche said. For them, it's just a small part of a much larger product line.
But recently there has been some consolidation in the medical supplies business, with product lines moving from one company to another, he said. The larger companies are focusing on other areas, which offers EME the opportunity to pick up some business, either directly or by making products for the larger firms.
Carmouche said he couldn't discuss the details. He didn't want to reveal any proprietary information or anger any competitors.
Meanwhile, EME, like most of the world's manufacturers, is concentrating on automation and robotics.
"The misconception (is) that robotics means getting rid of people, but that's not the case," Carmouche said. "It allows you to get people to be more productive."
Robots can do the boring, routine jobs that nobody wants. A worker can be paid more to monitor the machine or two machines, he said. The result is better efficiency and a better job.
Severio said the company has automated a number of processes but it has always added workers as a result. EME has 52 employees and runs two eight-hour shifts, five days a week.
Carmouche said the co-owners, all in their 70s, invested "a whole bunch of money" to build the new facility and to upgrade the equipment.
"The only reason we did that was because we saw a great future for manufacturing in the United States," he said. "Automation and robotics and technology play a very big part in what we see the future bringing."