Power transmission has seen somewhat upbeat and positive results this year, and more of the same is expected down the road, according to a recent sampling of distributor and manufacturer opinion.
“We’re planning on a strong fiscal year ‘15 and we’re making plans to continue the growth path that we are on,” said Chris Bursack, director of marketing for the ISC Companies, an industrial distributor headquartered in Plymouth, Minnesota.
For Bursack and ISC, power transmission growth has had little to do with newer industries. Rather, the more traditional markets—oil and gas, for example—have continued to be profitable, along with other more traditional PT industries, Bursack added.
“Food processing is a very strong market here in Minnesota,” Bursack explained. “Printing has been a strong market [but] not what it once was. But we are still participating. [As] you grow and diversify into individual market segments, you find yourself becoming less and less dependent on any one or two markets.”
Pamela Kan is president of the Bishop-Wisecarver Group, which offers specialty manufacturing, engineering, and guidance solutions (linear guides and complete actuation) among its services. In discussing some of its long-standing customers for power transmission, Kan pointed to packaging, medical, semiconductor, measuring, food, machinery, conveyor and woodworking as key examples. Bishop Wisecarver is also active in energy.
“The energy market on the whole is growing, due to investment in new technologies,” Kan said. “There are also R&D companies, universities, and research facilities that we’re working with in the energy sector.”
Bursack emphasized how ISC’s menu of value-added services has become more diversified.
“We have diversified so much over the last few years with our machining capabilities, our fabrication capabilities … So we’re able to offer a broader mix of services,” he explained. “Beyond that, we then have the opportunity to combine those products and services—doing some assemblies and things like that. We are then able to deliver a lot more value to our customers.”
John Newman, vice president of sales/America for BDI, counts food and beverage, paper, forest products, mining, and petro-chemical among the company’s strong PT customers.
Newman explained that when customers review BDI’s menu of value-added services, they are often sold on one major point:
“BDI’s value proposition is centered on providing solutions that result in documented cost savings for our customers,” Newman said. “Not to throw around slogans and buzzwords, but our commitment to ‘Success Made Easier’ is about reducing our customers’ overall cost of operation.”
BDI preaches the importance of overall value and not just a low purchase price, Newman explained. The company focuses on power transmission products that will last longer and that don’t break down when a customer can least afford it.
“There’s no doubt that purchase price is a significant part of the equation,” he said. “But when it all shakes out, if you deliver a bearing that costs half as much but you have to change it out twice as often, that savings in the unit price is completely eliminated by labor costs and loss of production that come with that lower-quality product.”
Successful value-added features have, in part, contributed to a more educated customer base, as Kan points out.
“Customers are better educated, thanks in large part to the Internet, association participation, and value-added education provided by the larger OEM customers [to sell more of their products],” she said. “[So] it is not as challenging to introduce products to educated customers because they are more inclined to be on the lookout for new technologies due to the demands being placed on them for cost reduction, savings, [and so forth].”
On the manufacturing side, Brian Berg, manager of marketing for process industries at The Timken Company, explained that his organization sees immense opportunities in power transmission.
“The power transmission segment for Timken has been one of our fastest-growing segments over the last couple of years,” he said. “It has been the fastest-growing segment for us primarily due to acquisitions. As we look forward to where we expect our power transmission business to be, we expect it to be a growth engine for the company. We expect our power transmission business to grow in a range of 15%-plus over the next couple of years.”
Those acquisitions have included Philadelphia Gear, Standard Machine, and the Schulz Group, among others.
Like Bursack and ISC, Berg describes much the same situation for power transmission and related industries at Timken.
“What we are doing is going deeper into our target segments. So it’s not necessarily new customers or new markets. It is really an expansion of the markets that we’ve been focused on for a while,” he explained.
Historically strong markets for Timken, he added, have included mining, metals, power generation, cement, and aggregate, among others.
However, wind power is a somewhat new industry that is attracting the attention of PT companies.
“We’re definitely engaged in the wind energy space,” Newman explained. “When you look at a combination of our geographical footprint and our supplier offerings, there is a lot of intersection with wind. A wind turbine is a highly mechanical device. You have a large gearbox, a large main shaft. There are bearings in the gearbox and a coupling that holds it all together.”
Berg and his Timken colleagues are also doing more in this area as they see greater demand for larger wind machines and the necessary gearboxes, roller bearings, and other PT services.
“Clearly, there is a commitment globally that is driving some pretty significant expansion in wind energy,” Berg said. “There are some pretty interesting trends going on in wind energy that are very favorable for [us].”
One thing that hasn’t changed for Bursack and ISC is the effectiveness of service and the personal touch. ISC has been most successful, he explained, when it invites customers, current and prospective, to visit ISC’s facilities. There, customers can get an up-close look at the menu of services ISC can offer.
“One of the ways we’ve been successful is if we can actually get the customer in to see our facilities and actually see what we can do rather than just telling them and bringing in literature,” Bursack explained. “When they see what we are doing, everything seems to fall into place.”
While there is general optimism about power transmission and its related product lines, Kan expressed her concern about some of these traditional power transmission markets.
“I see traditional PT-related markets declining in growth in some regions, especially along the coasts,” Kan said.
At BDI, Newman is still pragmatic.
“PT is a mature industry, but it’s changing and growing … and it’s very competitive,” he said. “There’s plenty of competition out there, and that certainly [affects] margins and pricing.”