Scott DeBaldo & Joseph Lesak of Neuman & Esser work with oil and gas companies to meet their compression needs.
Please excuse any typos in this hasty transcript.
Matt Register: And welcome back to the show, Texas Business Radio,texasbusinessradio.com is the website. We are down here, not in our normal studio, we’re down here at the George R. Brown Convention Center at the 47th Turbomachinery, 34th Pump Symposium. This turbo show has been put on by Texas A&M, the turbo lab over at Texas A&M, which is a part of the mechanical engineering department over there. And we’re talking about rotating equipment. We’re talking about gear boxes, and pumps, and turbines, and compressors, and all kinds of things that go around and round. And I’m telling you, it has more to do with the economy in Texas than you realize. This is a big show. It’s a lot of … there’s a lot of dollars in the economy that come through this show, a lot more than I think most people certainly realize. I’m your host, Matt Register. Jay Curry had to step out, he’s gonna join us here in a little bit. In the meantime, we’re gonna talk a little bit about compressors. NEA Compressors is a German company. They’re here in the United States. They’re making turbines, they’re solving … they’re making compressors, they’re solving compressor problems. We have Scott DeBaldo, which is the president, and we have Joseph Lesak, who’s a key account manager, from NEA Compressors. Welcome to the show, guys.
Joseph Lesak: Thank you, Matt.
Matt Register: So tell us a little bit about your company. What do you do, and who do you do it to?
Scott DeBaldo: First, it’s Neumann and Esser. NEA is Neumann and Esser of Aachen, which is out of Germany.
Matt Register: Oh okay, got it.
Scott DeBaldo: NE is where we make the actually reciprocating compressors for the API 618 compression industry, along with high speed compression. What we do here in Houston market is we work with a lot of major oil and gas and EPC industry to satisfy their compression needs on high spec, high customized compression packaging.
Matt Register: Well let’s simplify it real quick. What do these compressors actually do, right? What is it you’re compressing?
Joseph Lesak: In Texas they’d say it pretty simple, they just mash gas. But it’s not that simple with what we do in the industry, because there’s a lot of different gasses especially in the downstream side, which is a lot of the companies that are here. The end users, they have, you know, gasses that are a little more complex to gas … I mean, to compress. You know, hydrogens and nitrogens are pretty simple, but when they get into different mixtures, that’s kind of where our expertise comes into play where you have to be able to be a pretty flexible company with, you know, good designs and able to, you know, work with the customer, with their specifications. And of course then you have the midstream, upstream side, which is, well of course, big dogs with pipelines and natural gas, so you better be able to, you know, help those customers as well and that’s a whole different industry that we actually do and have been having fun doing that one, because it’s just been really hot right now.
Matt Register: So the German company that makes these compressors, opened an American division to be able to get into the American oil and gas business, right?
Joseph Lesak: That’s correct.
Matt Register: How long have you guys been in the United States, operating as Neumann and Esser?
Scott DeBaldo: We opened in 1992 here in Houston. We’re still based in the Houston area now, with our headquarters in Katy, Texas. We have about 70, 75 employees. You know, nearly half the staff is probably mechanical, electrical engineers focuses on taking that compression solution in Germany, which I just the compressor itself, the bare shaft, we call it. And then we bring it over here and we basically build up the entire customized package around it based on customer specifications by the EPCs or end users.
Matt Register: So customers rarely come to you and know exactly what it is they want. They come to you with a problem, and you gotta figure out, how do we solve this problem for them, right? That’s where the engineering staff comes into place, right?
Scott DeBaldo: A lot of the end users typically have relatively fixed specifications. I mean, that’s where we excel is when you have a downstream or a midstream customer who knows exactly the style and the robustness and their liability they want. And the easy side of it is, suction pressure gas, discharge pressure gas, it’s all the ancillary equipment around it, you know, that you build in for safety, for performance, that makes it a not off the shelf solution and that you have to have an experienced and knowledgeable engineers to satisfy.
Matt Register: Sure, well you gotta have a lot of experience and a lot of education to be able to figure out, how do we solve this unique problem, right? How do we solve this problem. And if it was something they can get off the shelf, you would not need to be here, right?
Scott DeBaldo: Yeah. There are a lot of people that do the off the shelf and they do a great job at it, it’s just not an area we focus on and sometimes I refer in our company that you know, we almost bring in, if you want to think about it, the engine, the compressor from Germany, and then we almost turn ourselves into west coast choppers kind of model. We build up the highly customized hot rod around it for that customer that really needs an advanced solution.
Matt Register: So your customers, when do they know it’s time to pick up the phone and call you, right? Do they wait until that off the shelf solution didn’t work? Or do they understand this is something weird, we need some help.
Joseph Lesak: A lot of times the projects are kind of, you know, longer lead thought out of what they’re trying to do, expansion. You know, they might have some need to move gas pretty quickly, you know, so, or they just have a problem or an issue, like they needed to bottleneck something. So what we do, and that also comes into play, other part of our company is the after market servicing parts and the revamps. You know, they might … we have … we’re an OEM owner of a lot of old legacy equipment.
Matt Register: Oh, I got it.
Joseph Lesak: And-
Matt Register: So you end up taking a refurb and, you know, remake it and send it back out after repair, right?
Joseph Lesak: Right. And then sometimes we may have to add one of our newer compressors to kinda add to what they already have, to you know, help them, you know, de-bottlenecking or just they have a problem with existing equipment.
Matt Register: Interesting. Now what is the easiest way. Somebody wants to learn more about you guys, what’s the easiest way to do that?
Scott DeBaldo: Actually, attend turbo pump symposium. This is put on Texas A&M. You also have a great school up in Oklahoma State that does a lot of the rotating equipment symposiums as well. Certainly you can go to our website, neumannesser.com, neumann-esser.com.
Matt Register: Neumann-esser.com, and we will have that link right from texasbuisnessradio.com if you’re driving and can’t take notes. Interesting stuff. Scott DeBaldo is the president of Neumann and Esser USA and Joseph Lesak is a key account manager for Neumann and Esser. Thank you gentlemen for joining us.
Scott DeBaldo: Thank you very much.
Joseph Lesak: Thank you.
Matt Register: Alright, have a great show. Unfortunately we are out of time, I need to go take a break and pay some of our bills. We’ll be back right after this with a whole lot more from the George R. Brown at the Turbomachinery Show. 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.