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FAB 40: BTD and the quest for continued diversification
Minnesota fabricator asks some big questions, mainly about getting even bigger
- By Tim Heston
- June 12, 2014
- Article
- Shop Management
In April Chris Kambeitz, business development manager for Detroit Lakes, Minn.-based BTD, met with company leaders to look at the growth potential of various markets, and he asked some big questions: What’s the total annual spending pie of outsourced metal fabricated products in [insert market], and how big is BTD’s slice? Are there new or related markets where BTD could expand? Does that market demand some of our core competencies, especially our signature rapid ramp-up of new part programs?
“We’re digging into what we’re capturing now and what’s available in the market,” Kambeitz said. “What could we capture with the manufacturing technology we have, or new technology? What’s within reach?”
The goal, like for many others on the FAB 40, is about diversification. “We’re trying to mitigate risk—not only on our customers’ end, but our own as well—by serving many industries, from energy and industrial to agriculture, construction, recreation, and lawn and garden,” Kambeitz said. “We don’t want to be too heavy in any one market, because we always know that one market might take a dip.”
The fabricator actually grew during the Great Recession, thanks in part to customers consolidating their supplier bases. As Kambeitz explained, many OEM customers turned to BTD (owned by Otter Tail, a publicly traded manufacturing group) as a resource to help pare down their supplier base. This growth rate peaked in 2012. In that year alone the fabricator grew by $50 million. “Last year we took a little bit of a step back, but every year we’ve grown. It’s been fun, and it’s been a challenge.”
He added that helping this growth has been the company’s rapid approach to part program launches. “We have a pretty good reputation with the leaders of certain industries,” Kambeitz said. “We help them be the first to market, which obviously helps both us and them.”
Principal revenue drivers over the past year have included the recreational vehicle as well as lawn and garden markets. The weakest is the mining sector. The company also has expanded its processing-expertise sandbox beyond typical metal fabrication to include brake disc and heat-shield production, both of which employ production stamping and welding.
In the recent past the agricultural equipment players had ramped up significantly. “But this year they’re taking a more cautious approach,” Kambeitz said. “Farming has been good, so the agriculture market hasn’t been bad by any means. But listening to their outlooks, it seems they’re being a little more cautious. So we’re going in with the same thinking. Just like any sector, there are ups and downs, and agriculture has been on a strong upswing. We’re preparing ourselves for a tick down, because it’s been so good for so long.”
BTD’s leaders are considering growth options, through an acquisition, a partnership opportunity with another manufacturer, or by opening a new plant. Kambeitz added, though, that if the company does open a new plant, it wouldn’t make the move to support just one product or one customer. “We’re not going to put a plant up or buy somebody for one customer. We need multiple customers in multiple industries producing multiple things.”
It circles back, like so much else in this business, to diversification.
About the Author
Tim Heston
2135 Point Blvd
Elgin, IL 60123
815-381-1314
Tim Heston, The Fabricator's senior editor, has covered the metal fabrication industry since 1998, starting his career at the American Welding Society's Welding Journal. Since then he has covered the full range of metal fabrication processes, from stamping, bending, and cutting to grinding and polishing. He joined The Fabricator's staff in October 2007.
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The Fabricator is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The Fabricator has served the industry since 1970.
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