Joe Venice & Paul Crowell with Mid-America Machine joins us to talk about the machining business.
Please excuse any typos in this hasty transcript.
Matt Register: Thank you, guys. Welcome back to the show. Texas Business Radio. Texasbusinessradio.com is the website. 844.814.8144 is the 24 hour call-in line. Get your calls in. We’re going to get the experts all in here to answer, and we are down here to 46th Turbomachinery & 33rd Pump Symposia brought to you by the Turbo Lab at the Texas A&M University down here at the George R. Brown Convention Center. We’re talking rotating equipment, compressors, pumps, gear boxes. Anything that goes round and round is showcased here at the show. I’m your host
Matt Register. Jay Curry had something better to do this weekend. We’re going to catch up with him next weekend, but in the meantime we’re having a ball here at the show talking to guys who make, repair any kind of rotating equipment of all shapes, sizes and flavors. Mid-America Machine, Inc. is out of Kentucky. They make parts for compressors of all kinds of shapes. So we have Paul Crowell, who’s the president and owner, and Joe Venice who is the sales and marketing director. Welcome to the show, guys.
Paul Crowell: Thank you. Nice to be here.
Matt Register: So, Paul, talk to me. Mid-America Machine. What do you do? Who do you do it to?
Paul Crowell: We make centrifugal air compressor parts. We also repair centrifugal air compressor parts. Really, we do it for just about anybody that needs that done.
Matt Register: Now, very simply, because some of our listeners aren’t in the air compressor business. We’re talking about really big air compressors. We’re talking about very precision parts that turn very, very, very quickly, right? So some of the gears that go into these air compressors you guys manufacture. Talk to me a little bit about that process.
Paul Crowell: Yeah, the compressors you’re talking about, you don’t carry one home in the trunk of your car.
Matt Register: No, not at all, right?
Paul Crowell: Right. They run large plants and they make a lot of air. The gearing in them is aircraft quality gearing. They’re AGMA 12 standards, they run at high speed. The pinions are turned by bull gear. Bull gear run anywhere from 1,500 to 3,500 operating [inaudible 00:02:38] somewhere in that range. And the pinions turn anywhere from 12,000 RPMs to 90,000 RPMs just depending on what sizes.
Matt Register: Now, when something’s turning that fast the precision on these things had to be … Any imprecision introduces vibration into it, correct?
Paul Crowell: That’s correct.
Matt Register: How does that change your manufacturing process knowing that these things had to be ultra precise?
Paul Crowell: Everything on the pinion has to be … it has to be nearly perfect. The gearing … Of course, we don’t make the gear tooth ourself, but we make the rest of the shaft, but the gearing, it’s one of the most critical parts of the compressor. It’s got to be right.
Matt Register: It’s got to be right.
Paul Crowell: That’s right.
Matt Register: Who are you making these parts for?
Joe Venice: We make these for companies all over the world that are actually going out to the end users and repairing their machines. We’re really not the guys that go to the very end users, we’re the guys that go to the service providers.
Matt Register: Got you. And make spare parts for them, enable to put into their-
Joe Venice: Repair and make centrifugal parts for those.
Matt Register: What have you seen over the last couple of years economically? Has demand increased, decreased? What is it that you’re seeing?
Paul Crowell: Really, last couple of years has been kind of straight line, I guess. Most of this year’s been pretty good for us. The last couple of months seems like it slowed down some, but we’re seeing a … looks like maybe a turn coming up. I think 2018 I believe will be good.
Matt Register: In a downturn typically repair markets increase, right? When people are not buying new equipment they’re repairing their old equipment. How much of that impacts you guys?
Joe Venice: Oh, a great deal. This is such a cyclical business that a lot of these machines are repaired every five to seven to eight years on overhaul. Things that you do eight years ago are just now coming back around to do again. When nobody’s buying new equipment everybody’s investing in repairing the equipment that they’ve got. They go to the service provider, and the service provider then comes to us.
Matt Register: Makes a whole lot of sense. Now, you guys are in Mayfield, Kentucky. Correct?
Paul Crowell: That’s correct.
Matt Register: So talk to us a little bit about how you guys operate out of Kentucky, being also a significant amount of your market is, what, nationwide?
Paul Crowell: Worldwide.
Matt Register: Worldwide. Talk to me about the opportunity to be able get materials and services that you need out of Mayfield, Kentucky.
Paul Crowell: Well, that’s really not a big problem. Any material, or anything we need, we’ve got suppliers that can supply that.
Matt Register: Just get it to you.
Paul Crowell: And get it to us, yeah.
Joe Venice: We’re fortunate enough to have at our facility, there in Western Kentucky. At one time there was a large OEM located there in our facility. They closed shop and moved away. There was an excess amount of people that needed jobs that had great, vast knowledge of-
Matt Register: Sure, you had the expertise there.
Joe Venice: We had the expertise already there to do the work, and the machinist had already been doing the work for the OEM in some instances. Those people needed jobs, needed places to go. That’s how a lot of companies have formed in Mayfield, Kentucky.
Matt Register: Makes a whole lot of sense. I love it. Mid-America Machine out of Mayfield, Kentucky. Midamericamachine.com is the website. We’re talking to Paul Crowell who’s the president and Joe Venice who’s the sales manager of Mid-America Machine. Thank you very much for joining us, guys.
Paul Crowell: Okay. Good to be here. Thank you.
Matt Register: Alright, we got to take a quick break. We’re going to be back with a whole lot more from the 46th Turbomachinery & 33rd Pump Symposia down here at the George R. Brown Convention Center. We’ll be back.
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In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.