In May of 2016, Business in Focus wrote about CLIMAX Portable and Machining Welding Systems. At the time, it was celebrating its fiftieth anniversary. There has since been a lot of progress, and once again, we had the pleasure of speaking with the Corporate Vice President of Sales and Marketing Dave Baker and President and Chief Executive Officer Tom Cunningham.
Business at CLIMAX is booming. “We have invested several million dollars in our global rental equipment fleet and rental operations. In the past three years, we have launched more than sixty new standard products across all our brands,” says Tom.
In addition to tackling twenty-five to thirty custom design projects each year, CLIMAX has increased its manufacturing capacity by more than twenty-five percent and invested in new factory equipment and technology, all in the U.S.
Commercial operations from the U.S. were decentralized two years ago, as CLIMAX opened regional headquarters for the Asia-Pacific region in Singapore, the Middle East in Dubai, and the UK in Stockport, in addition to existing German headquarters serving Europe. Last year, it opened a satellite sales office in Johannesburg to serve the continent of Africa. More offices are expected to open this year.
“We have added to our direct sales and customer service teams in all these regions. Additionally, since our decentralization, we have more than doubled our global network of factory-authorized reps. We’ve also doubled the number of global rental depot locations and invested several million dollars in additional rental fleet,” says Tom.
The cultivation of new business, development of strategic accounts, and overall care of its customers in these regions have gone very well. The aim is to provide complete, end-to-end, local service everywhere the company operates. At this point, it has achieved this, and each region is now fully capable and forecasting twenty to thirty percent annual sales growth.
All these initiatives encompass parts of its three-phase investment plan. Two years ago, CLIMAX was only beginning the first stage. Now it has upwards of eighty-five sales locations in fifty-four countries, and twenty-nine rental locations.
With the recent market upturn, CLIMAX is increasing its pace of investment. Of note is that the company has been able to fund all this new investment out of operating cash flow and has not taken on debt. As I write, CLIMAX is at the halfway point of its third phase.
The rental business has been growing since 2013 due to CLIMAX’s continued investment. In just the past year, new rental locations have been added in Vancouver, Toronto, Chicago, Philadelphia, Aberdeen, and Johannesburg. Further locations opened in the countries of Kuwait, Qatar, and Saudi Arabia and more are to come.
“It’s no secret that global markets have experienced a lot of uncertainty in recent years, and customers who want to grow their business but can’t justify the capital purchase rely on rentals. Rentals have also been a great way to showcase many of the new products we have released in recent years. By increasing our fleet and the number of rental locations, it’s never been easier to rent our products, which is why we have seen our rental business grow exponentially in recent years,” says Dave.
Sixty standard products have been launched in the last three years. CLIMAX’s most recent pioneering product is the FF5300 flange facer designed to repair or resurface flanges. There is nothing else on the market as powerful, easy-to-use, versatile, cost-effective, durable, and safe. The worldwide demand for this has quickly outstripped CLIMAX ability to manufacture it, so another shift in production was needed, expanding its U.S. supplier base and beefing up inventories.
Success with the FF5300 follows closely on the heels of the triumphant release of the SPEED FACER line of outside-diameter (OD) mounted flange facers from H&S Tool. The line was developed using a combination of core technologies from both CLIMAX and H&S Tool, which CLIMAX acquired in 2015.
“A true meeting of the minds helped to fuse CLIMAX and H&S Tool into the one team we are today,” says Tom. Customers love SPEED FACERS because they are easy to use with an automated feed system for ‘Hands-Free’ machining. More additions to the SPEED FACER product family will be added this year.
Other products introduced from H&S Tool are the new inside-diameter (ID) mounted pipe cutting and end prep tools. “In the word of one customer who tried the new PB6 POWER BEVELER for the first time: ‘This thing is a beast!’ It more than tripled the rate at which he could prep pipes. Similarly, the BOILER GUN™ family has the best power-to-weight ratio in the industry, in addition to being easy to use, and highly durable even under harsh conditions,” says Tom.
In 2017, CLIMAX also launched the entire next-generation portfolio of CALDER advanced valve testing systems, including the HydroPro™ hydrostatic testing systems, console and the SmarTest™ computerized data acquisition and control system. Since then, CLIMAX has added twelve new testers to the HydroPro lineup, in addition to more than a dozen custom designed products.
CLIMAX also introduced a pioneering new product to the valve testing industry: the CALDER Turn-Around-Tester (TAT). The TAT is set to transform the industry as it makes valve testing portable, just as CLIMAX made machine tools portable fifty years ago.
“CALDER valve testers are uniquely modular, giving customers the ability to expand and evolve their valve testing capability as their business grows. Also unrivaled in the valve testing industry, every CALDER component is OEM-certified to the maximum pressure specification of the system, for enhanced user safety, quality, and durability,” says Dave.
Innovation and expertise are cornerstones of the continued success of CLIMAX, and Tom says that CLIMAX competes with its products but wins with its people. Attracting, retaining, and developing the best talent is an essential aspect of the business plan. Many new employees are referrals from current employees, and the company is very selective about who is chosen.
CLIMAX strives to be a great place to work and measures this via employee surveys. Every employee, regardless of role or level in the organization, has an individual development plan developed by the employee and manager, to plan two to five-year goals of how that employee will fine-tune skills and capabilities in the desired direction.
“Having top-notch people is especially important in the management ranks because those people are responsible for the performance and development of others and of whole teams and, ultimately, for delivering the results the business needs,” says Tom.
CLIMAX has excellent leaders and managers at every level, in every function, everywhere in the world. The magnetic attraction of talent, combined with a management team that genuinely cares about the progress of its staff and crafting careers, and is serious about performance and results, is the core of it all.
The mission is to deliver an ‘outrageously good’ customer experience every time. It does not spend much time worrying about political environments or marketplace trends. Rather, it focuses all its energy on customers and supporting their efforts.
“We like shining a light on our customers’ successes with our products and our offering of unrivaled products and end-to-end solutions. We have a decentralized marketing effort, led by our local sales leaders and supported by our corporate headquarters. Doing this allows us to provide relevant and localized content to our customers,” says Dave.
Tom says that it has been a joy to work with the private equity firm Industrial Growth Partners (IGP). IGP is focused and buys only mid-market firms that manufacture highly-engineered products, have a distinct competitive advantage, and room to grow and create value.
IGP stays away from paper mills, information technology companies, grocery stores, and the like. Instead, its efforts are squarely on understanding the CLIMAX business in detail, pooling information and insights from similar businesses, and offering genuinely useful advice and assistance.
“We’ve had IGP specialists come into CLIMAX and do short-term focused projects in manufacturing and other areas, and this kind of spot help has proven to be extremely beneficial. IGP is in the business of building enduring great businesses, with sound fundamentals and real value creation. They take businesses like CLIMAX and work closely with the management team to make the business even better,” says Tom.
The company has recently expanded the manufacturing footprint of the plant by twenty percent, brought on another working shift, and installed further production infrastructure and automated manufacturing technology. This additional manufacturing capacity serves all of CLIMAX’s product lines, including its portfolio of CALDER advanced valve-testing machines and its industry-leading line of auto bore welders under the Bortech brand. Auto bore welders lay down a weld atop a worn bore hole or pivot joint. This weld can then be machined back to the original specified shape.
“The need for this additional manufacturing capacity is required to keep pace with rapidly increasing demand for our products worldwide. It’s a true testament to the outstanding people behind our products and our commitment to manufacturing in the USA, where over ninety-nine percent of CLIMAX products are built in Newberg, Oregon and Wadsworth, Ohio and that we go out of our way to source components and materials from U.S.-based manufacturers,” says Tom.