Posted by Matt Register

Matt Register: Hey guys, welcome back to the show, Texas Business Radio. Texasbusinessradio.com is the web site. Get your calls in 844-814-8144 is our 24 hour call in line. 24 hours, get your calls in, we’re going to get the experts on here to get them answered. I’m your host Matt Register, here as always with Jim Curry in the co-host chair. Jay what’s going on?

Jay Curry: Well, you know Matt, we all know here in Texas that the oil and gas business has been struggling. And it’s great to sit down and find some, some quality leadership that can tell and help us understand how you, how you get through this come out stronger. And I think N.K. going to give us a good story about that. A lot of good, best practices, things you need to do in down times.

Matt Register: Yeah. No doubt. No doubt. You know, a couple of weeks ago we were at Valve World. Valve World Americas there at the George R. Brown Convention Center in Houston. And met a tremendous amount of very, very good companies and Cornerstone Valve is one of them. So, we invited him here into the studio because they have a story about how they have chosen to weather the current oilfield downturn and emerge on the other side a much stronger company. So, we have N.K. Gupta, who’s the CEO, here in the studio. N.K. welcome to the show sir.

N.K. Gupta: Thank you. Great to be here.

Matt Register: So tell me about Cornerstone Valve. What do you do? Who do you do it to?

N.K. Gupta: Cornerstone Valve has been in business since 1990. Primarily in the upstream offshore markets. Extremely niche product for severe service applications. For applications where you cannot use a standard off the shelf product and this project, this product is engineered to customer needs. So we sit with customers, are standard project is; the customer calls us or sits with us and tells us their problems. Whether it is the media, it is a flow, it is the temperature. Whatever the problems they are having. Whether the valves and the line, the current valve and the line has been failing. So we provide them solutions.

Matt Register: So it starts with the customer having a problem, having a need for a valve and there is nothing on the market that will satisfy that need. You guys have the engineering, you have the expertise to be able to figure out how you need to manufacture this valve to where it will solve that problem. Correct?

N.K. Gupta: Absolutely right.

Matt Register: Okay but you predominately do this for the upstream oil and gas market. Correct?

N.K. Gupta: We have been doing it primarily for the upstream market.

Matt Register: Well, I don’t know if you know this but the last couple of years that’s been down a little bit. Right?

N.K. Gupta: Actually, I guess so, if you say so.

Jay Curry: Yeah, right.

Matt Register: So, you know, everybody has been feeling some pain in that space. Right? And you guys operating in this. Tell me a little bit about exactly what you did for that market and how that downturn has impacted it.

N.K. Gupta: Well, that accommodating to that, the market swing, wasn’t easy for me personally. As you know, I had acquired the company back in 2013 and I had high hopes and great things on my wish list for the company.

Matt Register: Sure.

N.K. Gupta: At Cornerstone, as a brand, as a product was great in the market place and nobody, including me, knew about the market, how the market is going to go down, go down. So, when the downturn hit, 2014, I could not, I didn’t believe it. I thought its going to come back. Its going to be a six month…

Matt Register: Sure.

N.K. Gupta: It’s going to be, it’s going to go down and come back up. So it took us a little while but eventually we had no option but to accommodate our manpower. We had to accommodate a lot of other things to survive. So we had to go in a survival mode.

Jay Curry: So, there were an awful lot of people who were in the same boat. Right? You’re thinking it’s going to be a typical downturn, six months your back up but you move pretty quickly in recognizing after the six months that you need to make some serious stuff. Tell us about that?

N.K. Gupta: Well, having gone through a few downturns before that, I knew if it doesn’t come back in six months, you know, and you do not make adjustments to your company, the organization, you are dead in water. A manufacturing company needs a lot more than just cutting manpower.

Matt Register: Sure.

N.K. Gupta: Of course, manpower is the biggest expense but there is a lot more to cutting. So you have to do, you have to get to the chopping table one by one and you have to do it in a systematic order. You cannot just do it haphazardly. So it takes time, it takes patience. You know, it takes the skill.

Jay Curry: You got to do it right. Right?

N.K. Gupta: You have to do it right because you don’t want to kill the company. You cannot kill a brand that has taken 27 years to build in one day.

Jay Curry: And on the other side though, you have new opportunities you recognized. You know, this may be down for a while. So we need to go somewhere else.

Matt Register: Well, you know Jay, it’s funny. You know, we talk to companies all the time. When we were at the Turbo Machinery Show last year. Right?

Jay Curry: A big show.

Matt Register: We had two classes of companies that were in the room. Right? One class, they just, they were hunkered down trying to survive. And they were fighting for the little bit of scraps that was out there in the market. Right? And then you had the companies that decided that, “we’re going to attack a different market, we’re going to develop new products, we’re going to do something different”. You know doing the same…

Jay Curry: We got to get out of our box.

Matt Register: That’s it. We’ve got to get outside. Who else needs our skill set? How can we apply that skill set to other, other, other products? How can we apply our products to other industries? Right? And those guys were doing great. Now you guys did something very similar to that and I want to talk about this. This is what makes this so interesting is you guys started developing your way out of this downturn. Right?

N.K. Gupta: Definitely. So one thing when you go to a downturn, you have to be flexible. You cannot be rigid. You have to say, you wake up in the morning and say “What different can I do today?” That’s number one.

Matt Register: Well, cause doing the same thing isn’t an option anymore. Right?

N.K. Gupta: It’s not going to get you anywhere.

Matt Register: Sure.

N.K. Gupta: Number two, you have to look out at the marketplace and call for help. They are great people in the market and they are, they will help you if they can. Number three, you have to look internally and see what differently you can do; product wise, technology wise, skill wise. And if you can develop that at, at, and at what cost. Those are things that are extremely important. Now for Cornerstone being a brand, well-known brand and having a huge image in the marketplace, you cannot do something that will kill that. You have to keep your core competency.

Matt Register: Sure.

Jay Curry: You have to compliment that.

N.K. Gupta: You can not deter from that. But within the limits of the core competency, what else can you do? That’s what you’ve got to find.

Matt Register: Sure.

N.K. Gupta: That’s something that you have not done for the twenty seven years. What else, what gap you can find and that’s what you have to do.

Matt Register: So, you guys ended up, we were talking during the break, developing additional techniques and additional products you can do for really the same customer base. Right?

N.K. Gupta: That is right. Absolutely.

Matt Register: And you also ended up moving into a new market you didn’t, you weren’t in before. Now, it is still upstream but in the LNG market. Correct?

N.K. Gupta: Yes. We went into the LNG market. We, we had talked about that market about a year back, didn’t do anything because of the cost element.

Matt Register: Sure.

N.K. Gupta: 2016 was miserable. We had to do something. Something had to break. We decided, everybody decided that we are going to go for this market. We were successful in launching a great product for this market, for the LNG product and the people in the industry welcomed that product. That was a huge success.

Matt Register: Good.

Jay Curry: That’s an example of getting out of the box though. That’s what I’m talking about. I mean you…

N.K. Gupta: Absolutely.

Jay Curry: You, a lot of people would do that and couldn’t pull it off. But you were very smart in staying with your reputation and staying with what you’ve done well but finding a different place to market it. Congratulations. That’s quite a story.

N.K. Gupta: Patience, core competency, you know, believing in yourself. Those are some of the elements.

Jay Curry: A little sweat, hard work.

Matt Register: A little bit of hard work too.

N.K. Gupta: Yeah.

Matt Register: N.K. Gupta is the CEO of Cornerstone Valve. I want to thank you very much for joining us.

Jay Curry: Great story.

N.K. Gupta: Thank you Matt.

Matt Register: You know this is, this is why we’re doing the show. Right? I mean weathering a downturn is not easy for anybody, especially in a middle market company, small company, middle market company, it doesn’t matter. It is tougher for you guys than it is for a big multinational company to survive. And this is exactly why we’re doing it. They’re very innovative guys out there that are figuring out ways to continue their, their operations, continue their company, regardless of what their market has done to them. Right? At no fault of their own. This is easier said than done. N.K. Gupta, CEO, Cornerstone Valve. Cornerstonevalved.com is the web site. We have to go pay some bills. We go to take a break. We’re going to be back right after this with a whole lot more. We’re just getting warmed up. Don’t go anywhere. We’ll see you on the other side of the break.

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About the Author
Matt Register

Matt Register

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.

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