The phones stopped ringing. Monies earmarked for specific gases and welding distributorship projects were no longer available. And companies previously enjoying record high top and bottom lines now keep a vigilant eye on cash flow. Reductions in head count have become standard operating procedure. And as we approach the end of this most miserable year, we attempt to forecast the future.
This magazine does not make a practice of publishing science fiction or fairy tales. We are in the practice of talking real information and real data. Virtually no one is certain about what 2010 will bring. Recovery? While we know for certain that it will happen, no one is sure of when. So all of us do what we do best. We institute best practices and procedures that we know will create the best outcome. We think. We plan. We monitor. And we prepare for continued depressed sales, while also preparing for a spike in increased demand.
In the pages that follow we talk about the best practices which are tried and true. We’ve talked with suppliers about where they are focusing their energies and how they will navigate the year ahead. No one company is limiting itself to one sure way to grow sales. No one company is putting all of its eggs into one practice. Industry suppliers are introducing new products, pursuing niche markets, following government money, getting closer to their customers, emphasizing increased productivity tools and working harder. As we see gradual improvements in our numbers, everyone will remain cautious, monitoring those numbers and watching to see if we have finally weathered what has been the most challenging recession in our lifetime.
| STRATEGY #1… Practicing Sound Business Principles The past year has forced all executives to rely heavily on the strategies that are pure and simple. It will be increasingly important in 2010 to rely on those sound business principles that will see us through the challenges that remain. |
Predicting the customers’ requirements six months to a year in advance is the ticket to increasing the number of turns in his stock, believes Ed Cooper, president, ELCo Enterprises (Jackson, MI). To better meet that objective, his team will manufacture smaller batches, more often. Among other products to be introduced throughout the year, the 1st Quarter introduction of a new de-reeling package for heavy wire dispensers will help to grow his core Wire Wizard sales. The company is planning to add up to 20,000 sq. ft. to its current facility, breaking ground during the 2nd Quarter.
By focusing on market share, quality, cost reduction and customer service, Peter Cronin, vice president, Heico Wire Group-National Standard (Niles, MI), hopes to maintain 2009 numbers. “We will stress lean manufacturing, Six Sigma and efficient operations,” says Cronin. He plans to focus on a marketing strategy which dictates delivering good, better and best products that meet the needs of consumers at all product price points.
In 2010, Martin Quinn, president, Thermadyne Industries (St. Louis, MO), will rely on his team’s ability to grow market share and product lines in each region of the world, maintain their cost structure in line with their volumes and adhere to solid and viable B2B strategy with the distribution channel. Quinn expects sales to remain flat through the first six months and then gradually increase, resulting in an increase of low single digits. He says, “To further opportunities for growth, we have created new tools to enhance internal communications, making sure that a company-wide culture reinforces that strategy.”
As the manufacturing climate slowly improves, David Cowart, president, Oxylance (Birmingham, AL), expects sales to increase by 2%. “We must attack costs wherever we can, while making sure that we are delivering the best value that we can.” To Cowart, value is provided by doing whatever it takes, whether it is helping the customer to demo a product in the field, providing on-site training or whatever else they need.
While many companies made fewer dollars in 2009, it is critical that they do not veer away from the sound practices and business plans that will ensure their future growth. Brian DePaul, president, Welding Material Sales (Geneva, IL), expects a 5-10% increase, supported in part by new merchandising displays in the 1st Quarter and new entry-level products during the 2nd Quarter. He says, “We made less money in 2009, but by sticking to our original plan, it will come back to us in the future.” A recently opened 12,000 sq. ft. warehouse in Houston, Texas, provides closer proximity to his customers and consumer base. The company has tentative plans for a western warehouse, probably in Nevada, by year-end.
| STRATEGY #2…Increased Liquidity Means More Sales There is no question that as monies are released by lending institutions, capital investments will improve. As we begin to see a general loosening of the purse strings, projects that were placed on the back burner will come to the forefront. |
According to Jay Kapur, general manager, Aimtek (Auburn, MA), a 10% sales increase is not out of the question. He says, “Capital expenditures are increasing. Big ticket items and long-term commitments will return in 2010, which will support the increased sales of bulk and specialty gas related products.” In anticipation of meeting new demand, he will introduce new specialty gas products during the 1st Quarter. Aimtek’s sister company, Bay State Surface Technologies, is introducing a new lower price-point plasma spray product during the 1st Quarter.
Also pointing to signs of increased liquidity and the funding of more projects, Joe O’Mera, president, CGW-Camel Grinding Wheels, USA (Niles, IL), anticipates sales to be up by at least 15%. To take best advantage of what he perceives as an improving environment, O’Mera is practicing all of the “right stuff.” He is investing in the development of a higher-quality merchandiser that can better merchandise his products, helping his distributor to capture more sales from walk-in customers. O’Mera delayed the publication of a new catalog in 2009 and will publish one in March, incorporating 500 new items. Recently introduced EDI technology will support increased efficiencies, making it easier for his customers to purchase product.
Bill Zheng, president, America Fortune Company (Houston, TX), says that while 2009 was difficult for everyone, his sales will grow by 30-50% as we experience a recovery. “The customer needs cylinders,” he says. “While it will vary sector to sector, overall spending will increase in 2010.”
Increased project demand means an increased need for welders. To gauge future demand, Andre Odermatt, chairman of the board and president, Hobart Institute of Welding Technology (Troy, OH), saw enrollment increase by 15% in 2009. Indicative of a future strengthening marketplace (and perhaps continued high unemployment numbers), Odermatt expects his enrollments to increase by still another 10% in 2010. There is a light at the end of the tunnel, though. Says Odermatt, “Job postings are starting to trickle in; for several months we saw none. We are beginning to see potential employers growing more active.”
| STRATEGY #3… Expanded Distribution Channels There is no time like the present to invest in an expanded distribution channel. As suppliers look to fill in under-served markets, new partnerships will form. By reaching out to new partners in areas where their product is not currently represented, the supplier will benefit with more feet on the street. |
After making investments in human capital in 2009, Jim Welch, president, Walter Surface Technologies (Windsor, CT), expects those investments to pay off in 2010. More in-house talent will reach out to an expanded distribution channel in 2010. Welch is prepared to achieve a sales growth of 8-10% as he arms an expanded channel with a new environmentally friendly abrasive product to be introduced during the 1st Quarter.
| SUPPLIERS EXPECT AN overall increase of 7.8% in 2010. This includes those who forecast sales to remain level. |
Dan Fallon, president, McDantim (Helena, MT), believes that his sales could grow by as much as 20-30%. “We have a product which is currently responsible for 10% of our company’s total sales. It could generate 40-50% of our sales. Our plan is to provide more training to our existing distributors and to identify 10 new distributors in underserved markets.” A recently launched beverage gas inline leak indicator will also support growth. He adds, “I need to develop a hard focus on the strongest opportunities.”
| STRATEGY #4… Follow the Money Whether we are following the potential of stimulus money or just astutely targeting niche markets which are likely to be productive, suppliers are targeting specific areas that will support future growth. Whether earmarked dollars will support new growth or the completion of projects which were backlogged in 2009, suppliers are expecting niche markets to support us in 2010. |
The hydrogen fuel cell market, left almost unscathed in 2009, is expected to grow by 20% in 2010, according to Syed Afzal, president, PDC Machines (Warminster, PA). As cars, buses and even forklifts convert from batteries to hydrogen fuel cells, his compression business is positively impacted. The company introduced a large compressor, with increased capacity, during the 4th Quarter of 2009. Afzal is planning to expand one of his two existing facilities and plans to open a third facility of 20,000-30,000 sq. ft.
Expecting economic improvement in the medical and home health care markets, Gary Heeman, president, Western Enterprises (Westlake, OH), is setting the stage for quarterly new product introductions, including gas delivery products that will generate double-digit growth and category expansions. Heeman expects to add to his base of manufacturing, engineering, and sales and marketing personnel and foresees operating a second and third shift.
Rising energy prices and a stronger oil market leads Patrick Dougal, vice president of sales and marketing, H&M Pipe Beveling Machine Company (Tulsa, OK), to expect a 5-10% sales increase. Dougal says, “As we see an improved outlook, our challenge will be to recruit the right people for our manufacturing operations and to re-establish relationships with the quality suppliers who survived this past year in business.”
Hoping that stimulus money will impact the states and facilitate road and bridge construction, Jim Johnston, vice president, Kaplan Industries (Maple Shade, NJ), is anticipating a 2nd Quarter surge in sales. His hope is that stimulus dollars will at least contribute to a 3-5% sales increase. “Real growth requires new customers, new business and increased revenues. There is no other way around it.” The company also is investing in capital equipment in an effort to outsource less. As an example, they recently purchased a 250-ton press to facilitate in-house embossing of collars.
2009 legislation impacting the life sciences market will help to drive a 3-5% growth in sales, believes Donna Jung, president, International Cryogenics (Indianapolis, IN). Jung is planning on a new Web site scheduled to be launched in 2010. New product offerings include an enhanced low-level alarm for the monitoring of containers during the 1st Quarter and a larger capacity bio-storage tank during the 2nd Quarter. While the company has not had any price increases since 2007, pricing will be increased on specific products in response to the instability of some materials.
A combination of stimulus money expenditures which support infrastructure development and the replenishing of depleted inventories will contribute to a 3-4% sales increase, according to Dennis Brown, vice president, Weiler Corporation (Cresco, PA). To further opportunities for growth, Brown plans on an expanded abrasive product line during the 1st Quarter. He will continue to evaluate his sales coverage based on marketplace shifts. He says, “We do not expect the same rate of growth from the industrial marketplace as we would from infrastructure and energy. We’re also looking at our distributor loyalty programs and will provide additional support to those distributors who align themselves with our products for the long haul.”
Targeting the environmental and energy sectors as growth markets for 2010, Bill Kroll, chairman and CEO, Matheson Tri-Gas (Basking Ridge, NJ), believes that 2010 holds the potential for growth of 3-4%. The company will make the best use of a new organizational chart to stretch its talent base and actualize his key objectives.
Jim Lisiecki, distributor program manager, Linde (Murray Hill, NJ), says, “We will follow the government money. We are examining new technologies and research and development in the pharmaceutical pharma-bio markets.” He expects the recovery to be slow and that he will either maintain 2009 numbers or see a slight increase of 1-2%. Lisiecki adds, “We’re continuing to support joint sales efforts with our distribution channel. It is critical that we focus on these relationships and service them, while maintaining an eye on the purse strings.”
Expecting numbers to remain level, Mike Weller, president, Miller Electric, ITW (Appleton, WI), is striving to better understand targeted end markets that can deliver better value propositions. Weller says, “We are watching the energy, shipbuilding and defense sectors. It’s not always about doing something new; it’s also about doing something old, better.”
Agreeing with the importance of keeping an eye on niche markets, Phil Bauman, vice president, Erie Technologies (Ottowa Lake, MI), is targeting several niches with the 1st Quarter introduction of a new product to specifically meet their requirements. His biggest challenge is the continual need for greater support of shrinking lead-time requirements. He says, “Distributors are not maintaining inventories in the way they did in the past.”
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Private labeling has been the ticket for Frank Reick, president, Fluoramics (Mahwah, NJ). A private labeling partnering relationship has been responsible for sales growth in 2009, and Reick says it will only get better in 2010. “Our pipe sealer product was a match and provided us with the boost we needed to grow our sales this past year and in 2010,” says Reick.
Pointing to 2009 numbers which were almost equal to 2008, Jim Harris, vice president, Veite Cryogenic Equipment and Service (North Ridgeville, OH), hopes that sales will remain at least level. Harris will focus on turnkey systems and installation work. He says, “When people aren’t buying new equipment, they’re at least maintaining and repairing what they have.”
2010 will be better than 2009, believes Ted Trumpp, vice president, Praxair (Danbury, CT). Trumpp points to new applications targeting the food and beverage industry, to be introduced in the 1st Quarter and the bio-pharma industry in the 2nd Quarter. He says, “Our focus is to help our customers reduce their total cost of ownership and use of gases.”
| STRATEGY #5… New Products Create New Dollars New product introductions provide the distribution channel with new turf on which to compete. In an effort to provide more solutions to more customers, suppliers have not curtailed their R&D efforts. |
Significant activity in the CNG and hydrogen markets protected 2009 sales numbers and will continue to support further growth in 2010 for Joe Sandello, executive vice president, FIBA Technologies (Millbury, MA). The late 2009 introduction of a new bull plug with an integral safety valve will add to his company’s sales growth. “I don’t think we’ll be able to make them fast enough,” he says. “It will address the problem of the anti-shear which impacts anyone who operates a hydrogen trailer or trailers with flammables.” Also to be introduced in 2010: a high-pressure carbon fiber wrap tube for 10,000-15,000+ PSI.
“I expect new product introductions, both as a result of R&D work and through a planned acquisition,” says Shannon Fanning-Meredith, vice president, Mathey Dearman (Tulsa, OK). To be released in the 1st Quarter: the first portable, job profiling machine. The company also is exploring an acquisition to be finalized by the 3rd Quarter. Fanning-Meredith continues, “We are investing in human capital to further support customer service, and we’re investing in new training tools. Both will add to our efforts to provide more support to our distributor partners.”
A new positioning and turning roll introduced late in 2009 and additional new products that target the wind energy market, to be introduced during the first half of the year, are expected to drive revenue up by at least 20%, according to Ed Celesti, vice president of sales and marketing, Bug-O Systems (Canonsburg, PA). Celesti will spend much of his time focused on relationship building. He says, “Distributors have always been our strength. I will be working more closely with inside and outside salespeople, and with our distributor network to help strengthen their sales efforts.”
Alan Egami, president, Kobelco Welding of America (Stafford, TX), expects that the super deluxe flux cored wire, nickel-based alloy flux cored wire, 110ksi class high-strength steel, and metal-cored wire for carbon steel introduced late in 2009 will contribute to expectations for a sales growth of 20%. Egami says, “Sales personnel will spend more time traveling and meeting with distributors in 2010. It is important that our engineers spend time in the field, demonstrating the new products and helping the distributors’ sales personnel to better understand the new products.”
As Ashley Madray, vice president, Gas Innovations/WWS (La Porte, TX), introduces new products and reaps the benefits of two new joint ventures, he expects sales to grow by high single digits. He says, “We’ve started a new company called HCL Innovations which will, as its name says, deliver hydrogen chloride innovations. A new facility in Baton Rouge, Louisiana, will house its wholesale-only operations, leaving Gas Innovations to package the product.” A joint venture with Diversified CPC based in Channahon, Illinois, will provide electronic-grade propylene. With increased activity comes the need for more square footage, and Madray expects to expand his current facility by mid-year.
Expecting a 10% sales increase, Garry Sears, president, Eleet Cryogenics (Bolivar, OH), is enthusiastic about a new microbulk delivery unit introduced at the end of 2009. He also believes that a new product, to be introduced during the 2nd Quarter, will simplify operations and reduce costs for distributors of medical gas products.
One sign of an improved sales climate is a move from a single to a two-shift operation, according to Grahame Savage, vice president of marketing and sales, Maxal (Traverse City, MI). The company is introducing a new line of alloys and an 8-in., 5-lb., layer-level wound spool, which will both contribute to a projected 10% increase in sales. Savage says, “Our company culture dictates that we are all responsible for new innovations. We pool our efforts. We meet regularly to learn how we can operate better for the benefit of our customer. We are not hanging our future on one person’s innovation.”
“As the U.S. manufacturing base shrinks, so does the customer base,” says Tom Cregan, president, Evergreen Midwest (Mentor, OH). In order to achieve a sales growth of 5-10%, he says, “We must continually introduce new products.” Cregan will also keep an eye on inventory. “Money sitting on the shelf means nothing. We spend more time talking with customers to anticipate their needs more quickly.”
Increased competition among MIG wire manufacturers means that everyone is competing on price. In order to drive sales up by 7-8%, Indura S.A. (Santiago, Chile) Export Manager for North America Mario Madrid says, “We must all add new playing cards to the hands that we are dealing. Rather than selling just MIG wire, we will add flux cored wire and additional new products to our lineup of offerings.” In Chile, the company also markets various safety products, including welding gloves, safety glasses, aprons, ear plugs and safety shoes.
Planning on a new product introduction in the 2nd Quarter, Michael Tarala, general manager, RegO Cryo-Flow Products (Burlington, NC), also is phasing in a new stainless steel globe valve product which is a hybrid, providing both tank and trailer applications. Tarala is expecting sales to increase by an overall 5% in the North American market.
“A completely redesigned Web site to be launched during the 1st Quarter will better illustrate the depth and breadth of our company’s products,” says Bob Ranc, vice president of sales and marketing, Superior Products (Cleveland, OH). He expects sales to increase by 4-5%, supported by the company’s emphasis on a more diverse product line. A recent acquisition will support an expanded line of cryogenic hoses and components and medical cryogenic hoses and components. Ranc plans to launch the second generation of his Mighty Max automatic changeover manifold, a Quick Connect product for filling industrial gases, and a new line of cryogenic hoses, all during the 1st Quarter. Look for a new release valve for the cryogenic market and an ultra high-purity fitting to be introduced during the 2nd Quarter.
“Quarterly new product introductions,” says Joseph Wolff, sales manager, Catalina Cylinders (Hampton, VA), “will contribute to a sales increase of 3-5%.” One new product introduction—a larger, seamless aluminum alloy cylinder—will be launched during the 1st Quarter. To improve operating efficiencies, the company is planning on a $1+ million capital investment in its Virginia facility.
“More choices when it comes to adhering to safety standards is the goal,” says Dave Sullivan, welding sales operations manager, 3M Speedglas (St. Paul, MN). Look for a new addition to his product offering in the 2nd Quarter. Not expecting real gains until the second half of the year, Sullivan expects increases to be an overall 2-3%.
Now building vertical bulk tanks which serve distributors purchasing 900-15,000 gallons, Tim Miller, vice president of sales, Cryogenic Vessel Alternatives (Mount Belvieu, TX), expects sales to remain level. The company will consider adding additional sales personnel to service the Northeast, West Coast, Southeast, and the Upper Midwest as market conditions dictate need. Miller says, “In the past, relationships and delivery requirements were the most important criteria. Today, everything is based on price. We must continually drive cost out of the product.”
An expanded product offering of high-visibility protective wear, including a wider range of price points, will assist Jimmy Wu, national marketing manager, Revco Industries (Santa Fe Springs, CA), in his efforts to maintain 2009 numbers. Wu says, “In some cases, we can remove the extra features that add to the cost of a product.”
In an environment of continued consolidation and fewer start-ups, there are fewer customers. With increased emphasis on refining his fumes policy which was introduced in 2009 in an effort to hopefully offer increased limits, Bill McCloy, managing director, AmWINS Program Underwriters (Charlotte, NC), is expecting 2010 to be level with 2009.
| STRATEGY #6… Increased Productivity Is the Ticket to Increased Sales 2010’s new buzzwords are increased productivity. Whether the emphasis is on increasing our own productivity or someone else’s, if we can promise an ability to do more with less, we can be assured of increased sales numbers. |
The new products that Frederick Luening, president, Bohler Welding Group USA (Stafford, TX) ,will introduce during the first half of the year will help to augment a sales increase. Luening says, “The goal for each new product is to help to meet the user’s need for increased productivity.” The company will take advantage of its experienced team, building on their knowledge so that each is working in tandem with the others to best focus on increased customer productivity.
Hector Villarreal, president, Weldcoa (Aurora, IL), expects sales to be up by 30%. He says, “New products to be launched in the 2nd and 3rd Quarters are being positioned to help people to do more with less, to make the plant safer and to function more productively with fewer people. Any time that we can provide a gas producer or a distributor with greater flexibility, it’s a huge win.”
Evan Smith, general manager, Hypertherm (Hanover, NH), believes that an early economic rebound will be a reflection of a re-stocking bounce. Smith says, “We’re placing a substantial emphasis on product upgrades that offer a shorter window for paybacks and support customer cost reduction initiatives. Even now, customers remain under pressure to trim 10-20% from their costs.” Smith’s plans for 2010 call for a sales increase within the range of high single to low double digits.
Indicating that his pipelines have almost twice the activity that they had one year ago, Peter Brereton, president and CEO, TECSYS (Montreal, QC, Canada), expects sales to be up by 10%. He says, “We will make a case for our systems paying for themselves.” Customers who committed to purchases and delayed them will move forward. The company will launch the first phase of a new enhancement to its purchasing system, which streamlines the process for re-supplying branch inventory in the 1st Quarter. The second phase will be launched during the 3rd Quarter. A move to new offices on April 30 will better meet the company’s own need for increased efficiencies. Brereton says, “We are 90% paperless. Many of our employees are mobile or working from a remote location. Our new space will reflect who we are today.”
David Schaer, president, Computers Unlimited (Billings, MT), expects new systems sales to be up by 10% as distributors seek increased productivity and efficiency. An upgraded version of their product will be launched during the second half of the year. Schaer says, “We are building new business intelligence capabilities to analyze key business metrics for business performance. We need to communicate these new capabilities and how they can benefit one’s business.”
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According to Jim Appledorn, U.S. distributor sales manager, The Lincoln Electric Company (Cleveland, OH), end-user customers will continue to exhibit an amplified interest in productivity improvement. He explains, “We’ve seen tremendous reductions in headcount throughout the country. As manufacturers see improvements in the economy, they will look for opportunities to maximize productivity, which require a continued focus on automation.” Expecting a single-digit sales increase, Appledorn also expects to see significant interest in fume legislation and in the development of the environment. He adds, “We will continue to accelerate new product introductions with an emphasis on productivity improvement, helping to weld better, at a more affordable price.”
A good bit smaller than many companies that are practicing Six Sigma, Quest Cylinder Co. (London, OH) will cherry-pick various Six Sigma principles and apply them to their own operations in an effort to increase efficiencies. Glenn Dugger, president, believes that his company can take advantage of the parts of Six Sigma that will still apply to his operation. A new parts repair kit enabling customers to do their own basic cylinder repair work, together with the 2nd Quarter launch of a new regulator, will help contribute to a 5% growth in sales.
1st Quarter new products and enhancements, as well as value-added services, are all aimed at improving the customers’ operating efficiencies, according to Rick Young, general manager for pumps, ACD/Cryogenic Industries (Santa Ana, CA). Expecting the year to be flat with the last half of 2009, Young says, “Our goal is to reduce our customers’ costs. If we can add value by adding a pump skid to a pump, or other desired options to products which create value, we will do so, and as a result, offer more of a ‘plug and play’ type of product.”
Expecting sales to be level, Jim Broughton, president, DataWeld (Bossier City, LA), is planning on a 2nd Quarter introduction of products and services that his customers need and are not being addressed. He says, “The key is to increase their operational efficiencies. We will automate tasks for them that are still being performed manually.”
By investing in capital equipment, Ted Boatman, president and general manager, Alloy Custom Products (Lafayette, IN), will be able to reduce the number of hours required to manufacture and repair cryogenic trailers and pass those savings on to customers. “Sales numbers during 2010 may soften by as much as 20% before sales begin to move in the opposite direction. Like everyone else, we are reducing costs and improving efficiencies in order to maintain margins and reduce our pricing to customers.”
| STRATEGY #7… Growth from Market Share With few exceptions, suppliers remain less than enthusiastic about the possibility of a rapid economic turnaround and a sharp upward spike in their sales numbers. Most believe that real sales growth will come at the expense of a competitor. The lessons learned in 2009 will help many executives to be more competitive and to grab a larger slice of the pie. |
In a flat to slightly up market, Rex Larkin, vice president, Reelcraft Industries (Columbia City, IN), expects to grow market share. He says, “We are sticking to the basics: customer service, quality and delivery. We also have a lot of focus on satisfying custom needs.” Larkin believes that many companies have found ways to do more with fewer people. He adds, “Even when sales do return to 2008 levels, I would not expect to see previous employment levels.”
Relative newcomer Gunnar Ennerfelt, president, Arcon Welding Equipment (Salisbury, MD), expects sales to increase by 20%, partly because the market is changing and also because his company is gaining a foothold in this industry. He says, “As distributors want something more to offer to their customers, we feel more confident in our ability to gain market share.” Several products are in the pipeline, scheduled to be introduced in 2010. On tap for 2010: a voltage machine that will automatically switch between voltages, a voltage-sensing wire feeder, and a combined welder and heater.
Anticipating a growth in sales of 10-15%, Tim Griffin, director of business development, Dyanco Group International (Dothan, AL), is continuing to gain market share as his company serves more customers. Griffin says, “Our growth will come as we support distributors whose customers are more distributor-loyal than brand-loyal.” The company will continue to look for ways to enhance shipping policies and turnaround cycles in order to support the distributor and, indirectly, the distributor’s customer.
While expecting his company’s sales to grow by 10%, Frank Salvucci Jr., CEO, Anthony Welded Products (Bakersfield, CA), believes that the industry overall will remain flat. The company is utilizing newer technologies to further enhance products and will introduce a lighter weight, more durable product in the 2nd Quarter. Salvucci says, “We are investing in capital improvements which will create greater efficiencies. Basically, we are providing our customers with more features and benefits, while holding costs.”
Not anticipating more than a 3-5% sales increase, Tom Westerhold, president, Abicor Binzel USA (Frederick, MD), is introducing a new plasma torch and a new TIG line in 2010. Westerhold believes the new introductions will help to stimulate gains in market share. “We are remaining focused,” Westerhold says. “All of us are required to have a business plan that addresses a dramatically different climate.”
| STRATEGY #8… Market Harder and Work Harder Can we possibly work harder or work smarter than we have in the past year? Most in our industry say that we can. (After all, there are always new strategies to uncover and new approaches to gain ground.) |
Ed Martin, president, ArcOne (Taunton, MA), launches new products, including eyewear, respiratory products, helmets and filters every year. The extent to which Martin believes his sales will increase is at least partially dependent upon how fast we experience a recovery. Martin says, “We all have competition attempting to unseat us. The biggest challenge is to play according to our rules and not according to everybody else’s. We are implementing our game plan. My job is to keep the attention of our entire team on that game plan.”
“The hardgoods business has been decimated,” says Phil Moroco, president and CEO, American Cap Company (Wheatland, PA). The need to replenish depleted inventories will contribute to Moroco’s projected sales increase of 20%. Moroco will continue to stress customer relationships as he creates new relationships with customers who were previously served by a more crowded field of competitors. Adding a new plastic valve guard in the 1st Quarter, he says, “We are going to see some spikes in demand during which we will need to work more closely with the customer. Communication with the distributors is even more important in order to anticipate their needs.”
Plans for an expanded marketing effort will support a 20% growth, believes Dave Kiilunen, vice president, COR-MET (Brighton, MI). Kiilunen says, “In the midst of a great business climate for three years prior to 2009, we spent the bulk of our time fulfilling customer expectations and not diversifying our customer base. Our salespeople are more aggressively pursuing the marketplace than they did in the past, and they are commanding more face time with the distributors who are focused on future growth.”
As the end-user tries to conserve dollars, Ralph Keller, president, Titan Industries (Alexandria, PA), finds his rehab activity slower, but still anticipates sales of rehabbed tanks to increase, resulting in a 10-20% increase in overall sales. Keller explains, “People are working smarter. We are staying in touch with them, asking for feedback and tailoring our response to them to meet their requirements.” In the midst of a facility upgrade, Keller is planning on a 5,000-sq.-ft. addition and the purchase of a two-acre lot for additional storage by the 3rd Quarter.
The time spent on the road in order to create more face time with distributor partners is increasing for Jimmy Walker Jr., president, Saf-T-Cart (Clarksdale, MS). Walker indicates that at least initially, the replenishing of inventories will help to support an overall 15% growth in sales. While on the road, he says, “We are listening and asking questions. We must continually look for new ways to perform better, cut expenses, cut labor and increase productivity.”
Michael Trueba, president, MPT Industries (Dover, NJ), says that most of his company’s revenue has historically been generated from niche markets unrelated to our industry. He believes that he can grow sales related to the gases and welding markets by 10-15%. “We are pursuing this market more aggressively.” The company will explore new packaging, offering applicators or bulk packaging which will save the customer money.
Based on current RFP activity, Dan Templeton, vice president of sales and marketing, TOMCO2 Equipment Company (Loganville, GA), expects his traditional tank business to pick up in the 2nd Quarter, and to see an overall increase of 10-15%. Templeton says, “2009 was a humbling experience for many of us. We have realized just how appreciative we are of our customers and realize the importance of appreciating when business is good.”
“We need to spend more face-to-face time with customers,” says Lance Looper, national account manager, Gas Equipment Company (Houston, TX). “We need to remind them that we have weathered the storm and that we are improving our partnering efforts by having the product that our customers need, when they need it. People have lost focus on what their job is, because they have been doing several jobs, but they are not as busy as they think they are.” Expecting sales to be up by 10% in 2010 and to increase by 20% in 2011, Looper introduced a new stainless steel global valve product late in 2009 and will introduce the full line by the 2nd Quarter. He says, “It’s an all stainless steel family of products as opposed to bronze. It’s a cleaner, less rugged look for the customer.”
A continual emphasis on custom work will support a 10% growth in sales for Dennis Richardson, vice president of sales and marketing, Thermco Instrument Corporation (LaPorte, IN). Richardson is focused on reaching out to his customers, customizing mixers for special pressure/special voltages, while keeping an eye on meeting various regulations.
“More project-related work is coming back, yielding a 5-10% increase in sales,” says Dennis Nelson, president, Midalloy (Fenton, MO). The company has invested in customer service enhancements and in the maintaining of a large inventory in order to maintain same-day shipments. Nelson says, “We are making more calls. And making more calls in an expanded region.”
| 74% OF SUPPLIERS expect sales to increase anywhere from 1% to 40% at an average rate of 9.7%. |
Mike Hopsicker, president, Ray Murray (Lee, MA), indicates that sales will be up by 5-10% as he explores new product introductions and a continual emphasis on customer service and customer care relations. “My emphasis is on making sure that we continue to keep the
customer first in everything that we do. It is critical that our entire organization understands what our customers’ needs are.”
While he used to spend 10% of his time traveling, Dino D’Onofrio, vice president, Generant, (Butler, NJ), is now spending 40% of his time traveling. D’Onofrio expects sales to increase by 5%, driven in part by replenishing dwindled inventories. He says, “We are reconnecting with customers.” Those customers will be further supported in 2010 with an enhanced Web site.
“When distributors catch a cold, we catch a cold,” says Guy Rowland, president, Air Liquide America Specialty Gases (Plumsteadville, PA). He expects to begin gaining momentum during the second half of the year, ending with a sales growth of up to 3%. New product introductions in the 2nd Quarter will help to fill in distributors’ portfolios and enhance their ability to compete.
Reaching out and continually communicating with customers in order to help them find ways to serve their customers is a key to success in 2010. Rusty Franklin, vice president of sales and marketing, Sellstrom Manufacturing Co. (Palatine, IL), says, “We must continually create a conduit of trust and confidence so that our distribution channel sees us as their business partner and sees us as a mechanism for their growth.” Expecting marginal growth of 1-3% during the second half of the year, Franklin will focus on new products and the industries that show promise. New products on the drawing board for 2010 include new auto-darkening technology.
As new budgets are approved, Jerry Blake, sales manager, PSI Industries (Norcross, GA), expects 1st Quarter sales to increase, but he also expects the rest of the year to be very similar to 2009. Blake says, “Historically, most of my sales are generated from the Southeast. In 2010, I will extend the region that I am focusing on, state by state.” Blake will spend more face-to-face time with distributors in contiguous states and also rely on an enhanced Web site to be completed by mid-summer.
A large contract which did not end until July 2009 spared David Day, CEO, American Standard Manufacturing (Central Bridge, NY), from experiencing the downturn that many of us experienced in 2009. Looking ahead, he does anticipate a decline in his 2010 numbers. “We will just work harder. It’s what we do. It’s an American thing, pun intended.” The company will introduce new products to an expanded base of customers. It is also exploring ways to reduce freight costs. Day says, “The keys to our success are our relationships and the service we provide in support of those relationships.”
After experiencing a slight increase in sales during 2009, Linda Weir-Enegren, president, LS Industries (Wichita, KS), expects sales to remain at least level. She says, “It has never been more important to be a better partner to our customers who may have fewer dollars in their pockets.” The company is updating its line of electronic components, which will create better efficiencies for its customers. To increase its own efficiencies, the company is making greater use of technology to make optimal use of larger production runs.
| STRATEGY #9… Have the Product Make the Sale Inventory is cash. And in this environment, no one wants to leave cash on the shelf. In an environment in which inventories are stripped to the bone, those who have available product to meet demand will capture the sale. |
Even as inventories must be replenished, A.J. Schenk, vice president of sales, Intercon Enterprises (Blaine, WA), expects sales to remain level. Schenk is assessing each of his product lines as the company introduces enhancements, improving on its ability to meet demand as it occurs.
Lee Van Boxtel, general manager, Weldcraft (Appleton, WI), is focusing on his company being the easiest to do business with in an environment that will be very similar to 2009’s. He says, “I will try to capitalize on our ability to deliver product. We are trying to deliver product which meets everyone’s price point.”
Expecting 2010 to be level with 2009, Fred Lueck, president, Mid-West Instrument (Sterling Heights, MI), will continue to reduce delivery time cycles. He says, “In 2010, we would like to further shrink delivery times by 50%. It is a matter of getting smarter and getting to know our customers’ businesses better.”
Maintaining a healthy inventory and providing JIT deliveries will support sales growth of 10%, says Jim Bennett, president, Cyl-Tec Inc. (Aurora, IL). “In order to cut pricing for our products and expand on our customer service offerings, we are continually re-examining our costs. The company plans on adding an e-commerce component to its Web site by mid-year.
| STRATEGY #10… Preparing for Recovery If we cannot anticipate a robust (however we define robust) recovery until 2011, then it is wise to invest our efforts and capital to become stronger and better as the economy improves. Rest assured, no one is resting on their laurels awaiting a return of 2008 sales numbers. And those of us who invest in our companies today are doing so in anticipation of tomorrow. |
Stuart Jara, president, Taylor-Wharton International (Mechanicsburg, PA), is planning to remain as efficient as possible under 2009 conditions. He says, “There’s overcapacity in the market, and our customers are making decisions around minimizing capital expense. They are not yet seeking to maximize utilization rates or efficiencies. They are managing their cap-ex in the same way that we all are.” Improvements in cycle time and inventory reductions while meeting customer demand are important. Taylor-Wharton is planning for two years ahead. Jara adds, “Given the current and expected market conditions, there’s no room for errors. We have clear accountability for each step of our process.”
As it relates to our industry, Rich Dippolito, vice president, Carbide Industries LLC (Louisville, KY), is expecting the year to be level with 2009. An emphasis on safety presentations and safe handling procedures for calcium carbide, along with increased emphasis on their plant infrastructure, is the company’s primary focus for the year.
Mike Brown, president, Acme Cryogenics (Allentown, PA), anticipates a gradual improvement which will result in a revenue growth of 8-12%. He says, “Like other companies, we have initiated a number of changes in response to 2009. We are managing employment numbers, and we are looking at initia- tives apart from our standard products and services, which will result in new product introductions during the 1st Quarter, adding value to our distributor partners’ operations.” Brown is positioning his company to best benefit from long-term strategic opportunities as the economy improves. He adds, “We will come out of this downturn as a better company than we were when we entered it.”
While retaining his liquid cylinder repair base and even expanding on it, Jonathan Brown, president, US Tank & Cryogenic Equipment (Lewisburg, TN), notes that there are hundreds of cylinders that require repair, with no place to put them. “When business does pick up, we will have a (heck) of a year.” Brown anticipates a 5-10% increase in 2010. With plans to fill an executive level position, responsible for driving new product introduction and diversification of the company’s offerings, Brown is also considering the opening of a facility in the western part of the U.S.
“Investments in bar coding and enhanced inventory control systems will increase efficiencies,” says Eric Laubach, vice president of sales and marketing, Direct Wire and Cable (Denver, PA). Laubach expects the first half of the year to remain level as sales slowly trend upward during the second half. “We are thoroughly evaluating house accounts and sales territories, and we are creating the tools required to grow quickly and efficiently as the economy does turn around. We are also evaluating our warehouse locations in order to be available 24/7 and to provide one-day turnaround shipments.”
2010 can best be described as the last few legs of a marathon. Like any other long and arduous exercise, those that were the most fit at the onset of the race are now better equipped to finish. The race begun 12 months ago has taken its toll on the industry. Most of the suppliers interviewed have taken important steps within their companies in order to best meet the challenges of 2009 and the challenges that are still ahead. None have forgotten the steps they have taken to strengthen their companies and the solutions they provide the the gases and welding industry. Perhaps most important, those still running in this marathon are prepared to reach the finish line healthier and stronger than ever before.
