Distributors Seize Opportunity For Growth

Optimism is on the rise for many GAWDA distributors, and it's easy to see why. Construction projects are flourishing in many areas of the country, with a number of distributors reporting that their customers are busier than ever. In other regions, growing medical and bioscience facilities are creating opportunities that distributors are quick to seize. New product lines, new hires and new facilities or expansions at distributor companies over the last few years have proved their worth, and many GAWDA members plan to continue that trend this year.

However, it isn't entirely a matter of “letting the good times roll.” Increasing costs—in the form of still-elevated fuel costs, escalating insurance premiums and skyrocketing raw materials costs that drive up product prices—continue to present a challenge, and many distributors foresee a possible economic slowdown on the horizon. However, GAWDA members are working hard and relying on a variety of strategies to position themselves well for whatever the future might hold.

In our Fifth Annual Business Forecast, Welding & Gases Today interviewed distributors across the United States about their success strategies for the coming year. While certain regions continue to lag economically, 86% of distributors surveyed expect to realize an increase in 2007, while an additional 9% expect sales to remain level. Overall, distributors should realize an average growth of 9% in 2007. For welding and gases distributors, momentum is definitely growing.

Eastern Zone Distributors Pursue New Avenues
Varying local economies are resulting in a mixed bag for distributors in GAWDA's Eastern Zone. Overall growth in the region is forecasted at 7%. For many Eastern distributors, the challenge is finding ways to evolve in a shrinking industrial market, and that's just what these GAWDA members are doing by embracing strategies as varied as offering welder training, introducing non-welding-related product lines, and even selling in cyberspace.

“We will be recruiting salespeople through trade schools, local newspaper ads and headhunting organizations.” Christopher Leahy Airweld   “Our main source of growth is getting out there, pounding the pavement and getting in front of customers.” Josh Groner Wilson Products   “We find our best employees through referrals from current employees.” James E. Madison Prest-O-Sales and Service   “Our biggest challenge will be keeping up with technology, since many of us Baby Boomers don't have the technological skills that young people do.” Adam Shaw Woonsocket Supply Company   “Equipment sales on the Internet are a challenge. When customers don't have to pay sales tax, I'm already at an 8% price disadvantage.” Michael Krupnicki Mahany Welding Supply Company   “We're going to focus more on legwork and monitoring new local construction projects.” Eric Wunschel Independent Welding Supply Corporation   “I'm looking into the costs of hardware and software to add online ordering to our Web site.” Wayne Rapine G&E Welding Supply Company   “For hiring customer service, IT or administrative personnel, we have better luck with online job resources than newspaper ads.” Bob Goodliffe J.W. Goodliffe & Son/ Cyberweld.com   “Remodeling our showroom encouraged our customers to look more closely around the store and discover products they didn't realize we offered.” Pete Matarese Liberty Supply   “Adding on to our propane filling area will give us more room for cylinder storage and alleviate bottlenecks.” Michael Higgins Abbott Welding Supply Company   “Targeting the local cryo freezer market is at the top of our priority list this year.” Bo Martin Middlesex Gases & Technologies

“We'll see a modest increase, 7% to low double digits,” says Christopher Leahy, president of Airweld (Farmingdale, NY). “That will be driven by cost recovery and price increases, as well as new business and some construction projects in the area.” Airweld will continue to focus on efficiencies, such as refining trucking routes and cutting down on energy consumption in its facilities. Leahy anticipates the biggest challenge will be keeping employees working at peak performance levels. “We'll have some incentive programs for our people to put a bit more money in their pockets, or maybe win a prize, like a trip to somewhere warm and sunny. If they enjoy their jobs, they'll do a good job for our customers, and that translates into higher sales.”

An influx of new business into the Lehigh Valley will drive a 10-12% sales increase for Wilson Products (Easton, PA). “The main source of our growth comes from just getting out there,” says Vice President Josh Groner. “We're pounding the pavement, taking care of existing customers and trying to grow those accounts, and looking for new customers. It's old-fashioned, but it works.” Wilson Products will focus on growing profitable sales while minimizing costs. “We make sure people we buy from are billing us correctly, and we're as efficient as possible in our fill room. We want to run the tightest ship possible, with minimal waste.”

Prest-O-Sales and Service (Long Island City, NY) will see a 5% sales increase thanks to growth in the healthcare segment and specialty gas sales. A possible plant expansion lies on the horizon, says President James E. Madison. “Our branch location has gotten to the point where it makes sense to have some fill capacity out there.” The biggest challenge remains growing the business with quality accounts. “Finding customers is easy. Finding quality ones that are going to value our service and pay us—that's the hard part.”

Sales will be level for All Gas and Welding Supply (Monticello, NY). “I think the problems we've experienced with petroleum over the last couple of years have dampened the economy substantially,” says President Walter K. Taylor. “We saw it in a lot of the industries we touch. Customers backed off from other purchases due to the expense of petroleum to heat their buildings and run their vehicles. With interest rates up and the housing industry down, I expect that trend to continue.” Over the next year, Taylor will expand the company's HVAC department and plans to grow the propane and fuel oil side of the business. “We're pricing our HVAC better in order to attract the fuels that go with it.”

“There's just not a lot going on in the local economy as far as the welding supply business is concerned,” says Woonsocket Supply Company (Woonsocket, RI) President Adam Shaw, who anticipates his company's sales will be level or down by 5-10%. The company may add some new products, but otherwise will hold fast and focus on serving its customers. “We try to cater to our customers and provide whatever they can use or whatever we can conceivably put in our line to generate business.”

Sales will be up by 10% at Mahany Welding Supply Company (Rochester, NY). “Inflation is going to drive half of that,” says President Michael Krupnicki. “The other half will be our good, hard-working efforts.” The shrinkage of the local economy provides a continual challenge for the company. “We have to focus our attention on selling a wider variety of products to existing customers and going deeper within those accounts.” One very successful avenue for Mahany Welding Supply Company has been the welding training programs it offers on site, prompting a possible expansion of its training facility this year. “Several colleges use our facility and instructors, and we're going to keep reaching out to different organizations to raise awareness of welding in general and what our company has to offer.”

“There will be a spurt of new construction this year, especially in downtown Manhattan,” says Independent Welding Supply Corporation (Bronx, NY) President Eric Wunschel. “On the basis of that, I think we'll be up 5%.” Wunschel will focus on “legwork”—getting out to see customers and making sure he has local construction projects covered so the company can get its foot in the door. Rising prices continue to be an obstacle. “In the city here, it's a very tough market. There's a lot of competition, but we try to keep our prices fair.”

Pent-up demand should drive a 5-10% increase at G&E Welding Supply Company (New Castle, DE). “A lot of the plants in the area have been pulling the purse strings shut,” says President Wayne Rapine. “But things they've been putting off started to catch up to them in 2006.” A goal for 2007 is to expand the company's online capabilities. “We've had a Web site for a couple of years, but I feel like we've been pretending the Internet's not there. A few of our bigger customers want to be able to go online to access inventory numbers and place orders, so we're looking into that. It's a market we can't ignore.”

Online capabilities are a major force behind the success of J.W. Goodliffe & Son/Cyberweld.com (Linden, NJ). President Bob Goodliffe predicts an 8% increase in gas sales and a 15% increase in hardgoods; the former will be driven in part by the hiring of a new salesperson in 2006, while the latter is a function of J.W. Goodliffe & Son's remarkable Internet growth. “We went live on the Internet in June 2000, and now 85% of our revenue comes via the Internet, all of which is hardgoods. It's really revolutionized us.” He adds, “Approximately 95% of all retail purchasing is still done in local stores, so there's still a huge number of potential new buyers coming into the online market. Our growth on the Internet is a function of having a good reputation and being well positioned, but it's also a function of just being there, because that market is going to continue to grow as people become more comfortable with buying online.”

Liberty Supply (Leominster, MA) President Pete Matarese predicts growth of 10-15% due to his fabricating customers' increasing workloads. In 2006, in preparation for his 20th anniversary, Matarese took the advice of his son and daughter and had the store's showroom retail space remodeled. The interior was repainted, and the store's six-foot-high racks were replaced with four-foot-high racks, allowing customers to view the entire store from a single vantage point. The company also installed a new floor, counters and computers. “I was dead set against the idea of remodeling, but I guess an old dog can learn new tricks,” says Matarese. “The comments from customers and the increased counter business have been marvelous.”

“Industry in our area is starting to regain momentum, and I'm hoping that will carry us to a good year,” says Abbott Welding Supply Company (Olean, NY) President Michael Higgins, who predicts growth of 4% for 2007. In late 2006, the company expanded to its propane filling area to allow for more cylinder storage. Maintaining profitability remains a challenge. “We're working on getting more for what we sell as opposed to just focusing on cost. But we're always looking at ways to reduce our expenses. We recently installed new lights that will save us money on electricity. Small projects like that help us cut corners here and there.”

“We try for an increase of between 5% and 10% of same-store sales,” says Bo Martin, president and CEO of Middlesex Gases & Technologies (Everett, MA). “Our goal is that the gases will be in the 10% range and welding equipment and supplies probably closer to a 3-5% increase.” Part of what will be driving that increase is the booming life sciences market in eastern Massachusetts, including a number of major universities and pharmaceutical companies like Bristol-Myers Squibb, which in 2006 announced it would construct a $700 million plant in Devens. Middlesex Gases & Technologies opened a new branch in Warwick, Rhode Island, in 2006, and expects to grow its customer base there. In 2007, the company will expand its liquid nitrogen operations and target the cryogenic freezer market.

Southeastern Zone Distributors Express Cautious Optimism
Many distributors in the Southeast report that this year should be another good one in a series of them. 90% of Southeastern Zone distributors anticipate an increase, while the remaining 10% plan to remain steady. Overall growth in the region should be at 9%, which distributors will realize through introducing new product lines and upgrading facilities, working to control costs, and relying on good, old-fashioned customer service.

“We're growing harder into safety and industrial supply lines to get more market share in each account.” Chet Mann Central Welding & Industrial Supply   “Implementing cylinder tracking will help streamline our customers' ordering process.” John Norton Specialty Gases Southeast   “Upgrading our cylinder fill technology will improve the throughput in our plant.” Andrew Cichocki National Welders Supply   “We're going to be more focused on our cost of doing business, regularly reviewing expenses to keep them to a bare minimum.” Danny Hagan Logan Hagan Welding Supply   “By adding dock space and bulk tanks, we will expand our manufacturing capability.” John Hill Willard C. Starcher Inc.   “Instituting a delivery charge to most of our customers will help us absorb cost increases.” Bill Collins Rebel Welding & Industrial Supply   “We've added new product lines, including machine tools and industrial chemicals.” Tony Powell Welders Depot of Tennessee

“The people we're doing business with are very busy, and they're giving us an optimistic forecast,” says Chet Mann, vice president of Central Welding & Industrial Supply (Sanford, NC). The busy local economy, combined with expansion of Central Welding & Industrial Supply's product lines, should produce a 5-10% increase. “We're growing harder into safety and industrial supply lines that complement the welding and gases product lines, trying to get a bit more market share in each account.” The biggest challenges will be controlling costs and fighting industry consolidation. “We work hard on efficiencies and we're joining various associations to work together with other distributors so we can stay competitive against national contracts.”

“The last three years have been terrific for us, so we're anticipating a 15% increase, which is half of what we did last year,” says John Norton, president of Specialty Gases Southeast (Suwanee, GA). The company has invested in new technology, including cylinder tracking and bar coding, and added nitrogen and argon microbulk to its product offerings. In late 2006, Specialty Gases Southeast broke ground for an expanded 19,000 sq. ft. facility, including office, showroom and warehouse space, which should be complete by mid-2007. “It's bigger than we need, but we decided to go ahead and spend the money because it will save us from having to expand again in the near future.”

Welding Equipment & Supply Company (Rome, GA) hopes to see sales go up by as much as 20%. “We've been calling on a lot of new accounts, and we've had a lot of customers call us,” says President Steve Minshew. “There's a lot of construction in our area, as well as several environmental cleanup projects with which we've been involved.” Last year, the company hired two outside salespeople, including one in a territory Welding Equipment & Supply Company previously had not covered, which already is producing results. Now the major challenge is managing the growth the company is experiencing while limited in terms of physical space. “We need to expand or find a new location. That definitely is going to be addressed soon.”

“Sales will be slightly up, by 3-4%, but I don't think it's really growth. I think it's continued inflation,” says Alex Bryant, president of Weld Direct (Jacksonville, FL). A continual challenge for the company is finding young people to hire. “We're on the lookout and trying to be more aware of where to find potential hires, but it's very difficult. Many young people are looking for a larger organization.”

National Welders Supply (Charlotte, NC) expects a 7% sales increase. “We've agreed on a strategic plan and focused on our core business, improving our productivity and making sure we're doing all the right things to get paid by our customers and that they see the value in what we do,” says President and CEO Andrew Cichocki. The company is in the process of improving its cylinder gas supply chain by upgrading several facilities to incorporate faster fill technology, and Cichocki expects to see modest staff increases this year, mainly inside salespeople, customer service representatives and drivers. “Our core business focus is delivering our cylinder gases and safety products correctly the first time and having plenty of representation in front of the customer.”

A difficult local economy will leave Tri-State Oxygen's (Ashland, KY) sales level this year. “We've lost many plants, and there's nothing moving back in to replace the companies that have either gone out of business or moved out of the area,” says Vice President Robert Clay Sr. In an effort to keep sales up, Tri-State Oxygen is expanding its territory. “We had a 60-mile radius, but now we have moved to 80 to 100. As a result, we've been able to pick up some business from colleges and hospitals in the area.” If the territory expansion effort proves successful, the company may add sales positions.

Rebel Welding & Industrial Supply (Vicksburg, MS) should see 10% sales growth. “We've heard about some additional facilities that may be coming into our area, but nothing has been announced yet,” says President Bill Collins. “Anything involving construction, fabrication or manufacturing would be a good change.” The biggest challenge will be staying competitive in the local market. “I'm going to continue to offer my customers a good product and good service at a reasonable price. All three things go together.”

Sales will grow by 10-15% for Willard C. Starcher Inc. (Spencer, WV), primarily due to an increase in regional oil and gas exploration. “We anticipate expanding our facilities and our manufacturing capability,” says President John Hill. “We need additional dock space and bulk tanks.” The company currently is fully staffed, although Hill may add employees in the near future. “We're not doing anything different to attract new employees. This is a small rural community, and in most cases we're well aware of who is in the market looking for a job.”

“We anticipate business getting a little bit better even than 2006, which was a good year,” says Danny Hagan, vice president of Logan Hagan Welding Supply (Statesboro, GA). Hagan predicts a 5% sales increase thanks to an influx of new small businesses opening in the area. “We've been fortunate to pick up some new customers. They like that we've been here a while and we're stable.” In the coming year, Logan Hagan Welding Supply will invest in upgrading its computer system.

Sales will be up by 10-12% for Welders Depot of Tennessee (Loudon, TN) due to the introduction of new products. “We've broadened the base of a number of product lines we carry, like machine tools and industrial chemicals, to increase our core business,” says Chief Manager Tony Powell, “and we hope to add a premium line of welding equipment.” The company's focus for the coming year is on solutions-based selling. “We need to show customers that there are choices in the marketplace that can save them money, and that we are offering them.”

Hard-Won Growth in the Central Zone
Predictions for 2007 are varied for distributors in the Central Zone. While 92% expect to see a sales increase, a number express concerns about finding good employees, escalating industry consolidation or difficult local economies. However, these distributors refuse to sit idly by, instead stepping up their sales efforts, streamlining their operations, and adding new products to their lineup in order to realize overall regional growth of 7%.

“Ethanol plants and a biodiesel plant have been built in our area, which has been very beneficial for us.” Loren Huber Huber Supply Company   “We're centralizing our locations and will begin filling some of our own gases.” Scott Stears Midwest Welding Supply   “As local manufacturers look for ways to cut costs, we've seen our automation business continue to grow.” Michael D. Clay Miller Welding Supply Company   “We are introducing propane at several of our locations.” Fred Semenik Inweld Corp.   “We focus on making sure we have the right people on the bus, but knowing how to do that is our number one challenge.” Charlie Wright Wright Brothers Inc.   “We are getting more aggressive in the propane market and hope to spend more time in the abrasives market.” Mark Falconer Williams Industrial Supply   “We're hustling to find new accounts and get more out of the accounts we have by broadening our product offering.” Barry Nanz Trade & Industrial Supply   “We are getting into the beverage carbon dioxide market, which allows us to offset some of the ups and downs of the welding business.” Pat Garten Sutton-Garten Company

Sales will be up by 5% at Huber Supply Company (Mason City, IA) thanks to a stepped-up sales effort that began in mid-2006. “We've been making phone calls and introducing ourselves, asking potential customers if they would like a rep to stop in,” says President Loren Huber. “We've gained several customers as a result.” The company went through a change of ownership in November 2005 as Huber and his son, Vice President Doug Huber, bought out Loren Huber's brothers and sister, and since then it's been all systems go. “Several ethanol plants have been built around us, and we're doing business with their maintenance departments. With the plants looking to expand again, all the arrows are pointing up for us.”

Weld Specialty Supply (Milwaukee, WI) expects to realize a 10-15% sales increase due to a favorable local economy. The company adds a minimum of two to three new employees per year to keep up with growth, but finding them is a constant challenge. “We've improved our benefits package and increased our starting salary,” says Vice President Bob Lang. “We need to make sure we're on an even playing field, not only with competitors, but with the industry in general.”

Over the last year, Midwest Welding Supply (Chicago, IL) has been in the process of a major reorganization, centralizing many of its operations under one roof and relocating several branches in the name of efficiency, reduced costs and competitiveness. Says President Scott Stears, “We've done a lot of modernizing, including a new Web site, new facilities, and new marketing and advertising, and we're going to start filling some of our own gases. We're going through the whole company, top to bottom.” Those efforts, along with a favorable economy, should come together to the tune of a 10-15% sales increase for the company.

Mid-East Supply & Machine Co. (Fairfield, IL) will see a 15% increase due to a flourishing oil field industry. Vice President Chris Medler anticipates that one of the company's biggest challenges will be vendors having product on back order. “It makes us lose sales,” he says. “We're in a small town, and if we don't have the product when our customers need it, they'll drive an hour and a half to find it elsewhere.”

Port Huron Welding Supply Inc. (Port Huron, MI) President Dennis Nicholson predicts a 5% increase. “People are a little gun shy here in Michigan because, with so many job losses, we're not attracting a lot of new business at present. But people should start coming around after the first of the year.” Nicholson anticipates that his biggest challenge will be finding new markets. “Right now we're looking at where else we can get into a niche market. We don't have specific plans yet, but we're working with our salespeople and drivers to give us ideas of where we could make some end runs.”

The Michigan economy will prove the greatest challenge for South Park Welding Supplies (Marysville, MI). Says Vice President Louis A. Darczy, “Our sales numbers in fall 2006 were 3% back from where we were year-to-date in 2005, and I estimate we'll be down by 3% again in 2007.” Difficulties in the automotive industry have dampened the regional economy, and even though South Park Welding Supplies doesn't work directly with the auto industry, the company has felt the effects as customers, uncertain of their future, have reduced their spending on welding equipment. The company may add some new products, but Darczy plans to maintain South Park's focus on welding and welding-related products. “We're not trying to be a complete hardware store.”

A bioscience boom in western Michigan will drive a sales increase of 3-8% for Miller Welding Supply Company (Grand Rapids, MI). “Medical complex after medical complex is being built,” says President Michael D. Clay. A major focus for the company is automation, which accounts for 40% of Miller Welding Supply's sales and will continue to drive growth in 2007. The company's western Michigan location has shielded it to some degree from the troubles afflicting the automotive industry, but it hasn't escaped entirely. “The west side of the state has diversified, but the manufacturing sector for the automotive Big Three is still a major presence here, so what happens at Ford, GM and Chrysler trickles down to our customers,” says Clay. “Through automation, we help keep the Tier One and Tier Two suppliers competitive by finding better ways to do old jobs.”

Sales will be up by 12-18% at Inweld Corp. (Indianapolis, IN), says Executive Vice President and COO Fred Semenik. “We have some special projects going on here in the city, including a new stadium and airport terminal being built, plus a lot of new warehouses.” With all the additional business, the company may add two new sales positions in mid-year. One of Inweld's biggest challenges will be national account consolidation. “It's very difficult for an independent welding distributor to compete for larger accounts when other companies can offer programs throughout the country,” says Semenik. “We're joining buying groups and associations to develop relationships with distributors in other regions.”

Wright Brothers Inc. (Cincinnati, OH) expects sales to go up by 2%. “The strength that was in the economy in 2006 should bridge over to 2007,” says CEO Charlie Wright. “There still seems to be growth potential.” Wright plans to add positions in sales and transportation this year to keep up with demand. The company also plans to upgrade its facilities. “We put new offices in place in 2003, and we're going to expand those in 2007,” says Wright. “We want to offer an environment that stimulates and allows our employees to grow.”

Williams Industrial Supply (Duluth, MN) President Mark Falconer expects to see sales go up by 5-10% due to growth in the gas industry. The company will expand further in the propane market and perhaps in the abrasives market as well, and is looking at the possibility of relocating and expanding a couple of locations. “We're trying to come up with ideas for how we can become a better, full-grounded supplier to our customers,” says Falconer. “We do meetings and training for our customers to teach them about regulatory concerns, and we've acquired some service contracts with customers to minimize their downtime. We want our customers to know we offer services they can rely on that they can't get elsewhere.”

Sales will be up by 7-10% for Trade & Industrial Supply (Lawrenceburg, IN). “We'll be out there hustling for new accounts and getting more out of the accounts we have,” says President Barry Nanz. The company will introduce additional consumable items as well as new industrial products, such as cutting tools and abrasives, to broaden its product offering for customers, and will add at least one inside salesperson, outside salesperson and driver.

“Equipment sales have been very good,” says Sutton-Garten Company (Indianapolis, IN) President Pat Garten. “Some of the technology makes machines easier to use, which makes the employment pool for welders that much better for our customers.” Garten expects to see a 3-5% sales increase. Contributing to the increase will be the company's recent entry into the beverage carbon dioxide market. “It's a nice addition because it's not affected by the welding business at all and it gives us a new market,” says Garten.

Southwestern Zone Distributors Focus on Managing Growth
Booming oil and construction markets are among the forces driving growth for distributors in the Southwestern Zone. 80% of Southwestern distributors will experience an increase, with overall regional growth at 10%. For many distributors in the region, managing growth is a primary challenge, and among the initiatives they're taking are adding branches, improving employee training and, above all, taking care of current customers.

“We're looking at acquisitions to grow the business.” John S. Whiting ETOX   “Our biggest concern is making sure we have enough products and people to service our current clients who are so busy.” Janice Bandy Metroplex Service Welding Supply   “We purchased 700 cylinders that we had been leasing or renting, which will cut down on overhead.” Larry Sharp Blanks Welding Supply   “We jump through hoops to make sure our customers get what they need.” Bennie Fullerton Fullerton Hydrotest Inc. dba Fullerton Welding Supply   “We don't plan to add new products, but we will be reinforcing the products we brought out in 2005 and 2006.” Ned Lane Cee Kay Supply   “An increased outside sales effort and a new store location will drive our growth.” Ira Kleinman Arkansas Welding Supply

The East Texas economy, driven by gas and oil pipelines and drilling, will lead ETOX (Tyler, TX) to a 20% sales increase. “We're looking for acquisitions right now to grow the business,” says President and CEO John S. Whiting. In 2006, the company built a new location in Nacogdoches, Texas, and in 2007 the Palestine, Texas, branch will move into a new building. Last year ETOX completed the expansion of its corporate headquarters from 2,500 sq. ft. to over 5,000 sq. ft., including a new, state-of-the-art training room where up to 34 salespeople can be trained at a time. “We bring in all our salespeople, branch managers, counter salespeople and some route drivers for training on new products every two months,” says Whiting.

National Welding Supply Company Inc. (New Iberia, LA) expects a 15% sales increase due to a booming domestic oil industry. “It's a challenge to keep up with all the bulk installations we're doing,” says President Michael Dempsey. In contrast to the positive economic news, however, Dempsey currently is in the midst of welding fume litigation. “I have a good lawyer, and we're handling them one case at a time.”

“We're out in the middle of oil rig country, so our business has picked up,” says Carroll Welding Supply (Abilene, TX) President David Carroll. That pick-up in business should lead the company to a 5% sales increase this year. Carroll predicts that DOT regulations will continue to be among his company's biggest challenges. “With the hazmat endorsement for a commercial driver's license, it's hard to hire drivers. It takes weeks, sometimes months, to get the endorsement. It's like trying to get through the swamp and the alligators are after you at the same time.”

Sales will be down by 15% this year at Schad & Pulte Welding Supply (Gainesville, TX) due to a challenging local economy. In part to combat that expected decline, the company joined a buying group and will add hand tools to its product offering. Schad & Pulte Welding Supply will increase the hands-on training it provides customers in order to compete more effectively with large chains that appeal to the do-it-yourself market. A major challenge will continue to be maintaining experienced employees. “It's difficult for us to attract new employees because the oil fields are busy and they're paying well,” says Manager Derrick Campbell.

Larry Sharp, president of Blanks Welding Supply (Fort Worth, TX), predicts a minimum of 20% growth for his company, based on new customers. “I advertise a little bit, and I call on people. But most of my business that walks in the door is through word of mouth.” In 2006, Sharp purchased 700 cylinders that he previously had been leasing, which will cut down on overhead in 2007, and he expects to hire a full-time outside salesperson in the spring. The biggest challenge will be managing the growth. “I don't intend to increase my number of employees significantly, but I intend to increase productivity and efficiency. That will come by teaching my employees to do several different jobs.”

Sales at Metroplex Service Welding Supply (Fort Worth, TX) will remain level after a 30% increase in 2006. “We have a lot of pipelines in Texas, as well as construction due to the fallout from Katrina and Rita,” says President Janice Bandy, “but I suspect that is going to level off this year.” Bandy's strategy is to focus on current customers who are experiencing their own explosive growth, rather than chase after new business. “In the lean years, those customers are the ones who are going to keep us busy.” Metroplex Service Welding Supply constructed a new branch in Burleson, Texas, in 2006, and added new staff to be ready for the store's end-of-year opening.

“This is a hot area right now,” says General Welding Supply Inc. (Lovington, NM) Corporate Secretary Rhonda Beal. “It's a challenge even keeping up with the growth. It's just like it was back in the oil boom days.” Beal predicts an increase of 20% for the company, based on increased opportunities as new business continues to move into the region. A focus for the coming year will be improving inventory control. “We need to be careful about controlling our spending based on supply and demand.”

Construction activity will drive a 6% sales increase for Cee Kay Supply (St. Louis, MO). “A couple of casinos are being built, the Chrysler plant in town is going through a total refurbishment, and the power plants are going through a turnaround,” says President Ned Lane. Lane hopes to add two new branches this year, as well as two new outside salespeople. In 2006, Cee Kay Supply created a trainee position, designed to expose new employees to different aspects of the company's operations. “Our hope is that new employees will spend a month in each department, and at the end of a year we'll figure out which position best suits their talents.”

Fullerton Hydrotest Inc. dba Fullerton Welding Supply (Inola, OK) will see 20% growth. “With God's continued blessings, we're going to be doing the same things we always do,” says President Bennie Fullerton. “We take very good care of our customers and make sure they know we appreciate them. We try to jump through hoops to make sure they get what they need.” Fullerton hints that the company has some new projects “in the works” that will help broaden its customer base, but details haven't been settled yet. The company may add another route driver and additional in-store help.

Change is in the air at Arkansas Welding Supply (Hot Springs, AR), and that momentum will lead the company to a 5-10% sales increase. Driving the growth will be a new branch location opening in early 2007 and an increased outside sales effort, including a new outside salesperson hired in late 2006. The company also plans to add a branch manager and a truck driver this year. “We've been stagnant for a while,” says President Ira Kleinman. “But we had a change in top management in 2005, and we have a growth-focused team now. This is a changing organization.”

Western Zone Distributors Seize Opportunities
Although distributors in the Western Zone predict the biggest gains this year—with 82% of distributors expecting an increase, and 11% regional growth overall—many of them also express concerns that the tide is about to change, citing the slowing housing market, rising interest rates and eroding local business as harbingers. However, they are focused on taking advantage of the opportunities currently before them in order to keep their businesses strong, no matter what might be around the corner.

“We are looking for more innovative ways to use technology, to reduce the need for additional staff.” Ron Adkins Valley Welders Supply   “We've worked to build relationships with local schools and universities to get students interested in joining the welding supply industry.” Robert Chris Craig California Tool & Welding Supply   “We're picking up new industrial products like compressors and air tools.” Patrick Wilke Sierra Welding Supply Company   “By providing our customers with fast turnaround, we're more likely to receive additional business from them.” Jim Moore Fire King of Seattle   “Finding personnel is our biggest hurdle. It recently took us five months to find a qualified driver.” Jerry Thompson Coastal Containment and Welding Supplies   “We cross-train our employees, so everyone has a basic knowledge of every department.” Willie Watt Gem State Welders Supply   “We are doubling our shop size to accommodate our recent growth.” James Wooldridge Pacific CA Systems

Sales will be up by at least 8% for Valley Welders Supply (Billings, MT). “A lot of companies that have not been able to spend money on their facilities for the last few years are now able to do so,” says President Ron Adkins. In 2006, the company launched an initiative to open stores in new markets, including Sidney and Bozeman, Montana, and will continue that initiative in 2007 and beyond. “A team of employees regularly scouts new locations, looking for markets where we think there would be an opportunity.” Part of what motivates the company's employees is that Valley Welders Supply has been 100% employee-owned since 1948. “The longer our employees are here and the more they see the benefits of employee ownership, the more enthusiastic they become.”

Robert Chris Craig, owner/manager of California Tool & Welding Supply (Riverside, CA), anticipates that his company's growth will slow this year; however, he will still see sales growth of 20-25%. “In the last 24 to 30 months, we and others in Southern California have been experiencing 60% and 70% sales increases, but I see that changing very quickly, especially with the changes in interest rates and the housing market.” In late 2006, California Tool & Welding Supply purchased a new branch location, and is looking into a new facility for its Reno-Sparks, Nevada, location. The company recently extended its micro-bulk lines and CO2 distribution in preparation for 2007.

Heath's Welding Supply Inc. (Dublin, CA) will achieve a minimum 10% sales growth due to positive economic conditions in the region. “All my customers are getting busier,” observes President Robert M. Heath. A continuing challenge is fending off acquisition feelers, especially as the company's supplier is also one of its biggest competitors. “As a small business surrounded by big guys, we just take real good care of our customers. But even when I take away one of my supplier's customers, they have the business anyway because I buy all my gas from them. So what are they really losing?”

A downward trend related to oil and metal prices and a troubled housing market will leave sales at Sierra Welding Supply Company (Sparks, NV) level for 2007. To combat the challenge, the company is focusing on diversifying its product offerings with industrial products like compressors and air tools. A continuing challenge will be the impact of large chain stores. Says President and General Manager Patrick Wilke, “We have to make sure we bring in new products faster, make decisions faster, and work better with our customers to stay ahead.”

Sales also will be level at Western Welding (Goleta, CA). “We're in a town that has 40-year-old track houses for sale for $800,000 to $1 million, so many of the working people are leaving,” says President Tom Giffin. “We've lost a tremendous number of our industrial customers.” Part of Giffin's strategy for the next year or two is building an expanded facility at Western Welding's current location and looking for new avenues of income. “We attend equipment shows so we can see what's going on and talk to people about what works and what doesn't.”

Fire King of Seattle (Seattle, WA) provides the major gas suppliers with services relating to high pressure gas cylinder maintenance. “Our business depends on the growth the majors are experiencing in the region,” says President Jim Moore. “Our projection is that we'll be up by 10-15%.” The company's goal for 2007 is to keep the business it has and grow it a little by continuing to provide a quality product for the customer. “We focus on providing a fast turnaround, because our customers don't place orders unless they need it soon. If we can perform a project for a customer immediately, they're more apt to give us future business because they know we can handle it.”

Sales will be up by 5-6% at Hust Brothers Welding Supplies (Marysville, CA) due in part to price increases and in part to an effort to achieve further market penetration. “We want to upgrade our customers to better quality welding accessories, like gloves and caps,” says President Roy Lanza. “For instance, if they're looking at a Ford type of helmet, maybe we can talk them into a Cadillac, with better lenses.” The rising cost of health insurance continues to be a concern, especially since Lanza currently does not charge employees for the benefit. “I hope that doesn't change, but it's pretty hard to hold.”

Conditions in western Washington state are unsettled, says Coastal Containment and Welding Supplies (Aberdeen, WA) President Jerry Thompson, with some businesses leaving the area and other projects (such as a new biodiesel plant) just ramping up. “We should probably see a 15% increase, but a lot of that is going to be due to wholesale costs going up.” This year will find Coastal Containment and Welding Supplies focusing on doing its homework and paying attention to trends to provide the best possible service for its customers. Last year, the company added a larger warehouse to its facility. “We haven't expanded our product lines, but we've increased our inventory level because the lead times on a lot of products have stretched out so much.”

Willie Watt, president of Gem State Welders Supply (Twin Falls, ID), anticipates that economic conditions in his region will flatten a bit, leading to a 3-5% sales increase. “Our competitors are all very large companies, so as a small player, our selling point is service. We're going to keep beating the doors.” The biggest challenge for 2007 is maintaining profitability in the face of soaring costs. “When we get price increases, we increase our retail prices. We do delivery charges, and we've had to add fuel charges. We're trying to keep our customers happy without adding too many costs for them, but it's tough. We're making a smaller profit margin than we were a couple of years ago.”

“There's a lot of growth happening in the oil field industry, and we're supplying a lot of gases and equipment in those areas,” says James Wooldridge, president of Pacific CA Systems (Union Gap, WA). That growth will lead Pacific CA Systems to a 20-25% sales increase. To keep up, the company is in the process of adding another 10,000 sq. ft. to its facility. “We've added five or six trucks over the last year, and we'll be adding more personnel, including two or three shop positions and up to four drivers.”

A&B Supply (Lake Havasu City, AZ) is looking for a 25% increase, says President Ross Hobday. “We're very well-rounded. We own a fill plant and have a large welding supply operation, but we accent it with everything from grinding products, nuts, bolts and tools to clothing and industrial supplies, so our customer base has grown.” Hobday plans to add five new stores over the next five years, starting in January 2007. “We're in a rural area where towns are 50 to 90 miles apart, so our drivers spend two to three hours a day just getting there and back, before they even start their routes. Our salespeople have done a great job of building up the area, so we think the timing is right to add new stores.”