Graham Corp

Source: Manufacturing Digital

Date :25/05/2007 09:11:47

Graham Corp: One Cool Company

Written and produced by James Buchanan & Patrick Harlow

New York firm specializes in products that reduce the heat turned up by its customers

For a company that specializes in products that remove heat, Graham Corporation’s sales for the year are warming up nicely.

So far in 2007 the company has announced $13.8 million in new contracts, and according to the company’s third quarter 2007 earnings report, sales for the quarter (which ended on March 31) are at $14.5 million. This represents an increase of 7.4 percent over the same time period last year.

Further, for the first nine months of the fiscal year, Graham Corporation is reporting net sales of $45 million, which represents an increase of 14.5 percent over the same time last year.

So then, what is driving these sales? Vacuum and heat transfer technology.

Graham Corporation designs and builds vacuum and heat transfer equipment for process industries throughout the world. Products include liquid ring vacuum pumps, surface condensers, and heat exchangers.

The principle markets served by the company include chemical, petrochemical, petroleum refining, and electric power generating industries. The company’s products are also used for diverse applications such as metal refining, pulp and paper processing, shipbuilding, water heating, refrigeration, desalination, and food processing.

Founded in 1941 by Harold M. Graham and Frederick D. Berkeley, the company is based in Batavia, N.Y., with a production plant that includes modern engineering, manufacturing, and research and development facilities.

The company’s products are marketed through a combination of direct company sales engineers and independent sales representatives located worldwide. The effectiveness of its strategy to serve a world market can be seen in its recent contracts to sell three surface condensers worth $3.5 million to two international clients.

The first is an ammonia production facility in Trinidad, which has ordered a titanium-tubed surface condenser. The order was placed by a German engineering, procurement and construction contractor and is the fifth surface condenser order of this type in 12 years, for what the company describes in a press release as Trinidad’s booming petrochemical industry.

The second two condensers were ordered by a Japanese turbomachinery equipment manufacturer for installation in a petrochemical production complex in Thailand.

In a March 28 press release, Jim Lines, president and CEO of Graham, said “Our backlog continues to grow at a healthy pace with strong future prospects in our sales pipeline. We are seeing some slowing in the pace of future projects due to rising raw material costs as well as personnel resource constraints within the industry, including at the end-users, engineering, procurement and construction contractors, and other critical equipment providers.”

Lines goes on to add, “To mitigate our own capacity constraints and maximize profitability, we continue to assess and accept each order based on evaluating several criteria, including the customer relationship and margin potential.”

Graham also provides a number of value-added benefits to its customers that include:

Application appraisal – Engineering or sales specialists will survey a client’s processes in order to develop strategies on how to best apply the company’s equipment.

Personnel training – The company will provide onsite and in-house seminars to teach customers how to operate, apply, maintain and service Graham products.

Facility startup–Engineers are made available by the company to help supervise the installation and, startup, and to instruct operating personnel.

Equipment service – Service engineers are available to travel anywhere in the world to service the company’s products.

Production and application facilities – The company’s R&D department and production test floor will work with customers on special projects that require laboratory or prototype work.

Of its fully functional production test floor, the company says, “When an application is specialized, or if you require a witnessed performance test, Graham has the facilities to perform pilot or full scale testing. This assures [its customers] of reliable performance once the equipment is installed in [the client’s] application.”

The company further states that having all of the major components of its vacuum products built by Graham provides its customers with the benefits of ease of project coordination. This is due to the creation a single point of contact for the engineering, manufacturing, testing, and after-market support of the product.

Graham also markets itself as a sound investment as it is a publicly traded company. In its third quarter 2007 filing the company lists the following as investment considerations:

Well respected global brand

Strong reputation for engineering know-how and solutions oriented problem solving

Significant global positioning in the oil refining, electrical power generation and chemical processing markets

Established sales and engineering operations in China

An experienced and talented team.

Future growth strategies include:

Expanding sales and engineering operations to serve emerging economies, especially Asia and the Middle East

Enlarging engineering and manufacturing capacity through automation and global expansion

Leverage global strength to develop a broader international footprint

Assessing selective acquisitions opportunities and strategic partnerships to expand its customer base.