We sat down with Todd Harrison, Strategic Account Manager for Metso, about the valve business and how big companies feed the smaller company supplier ecosystem.
Please excuse any typos in this hasty transcript.
Matt Register: Hey guys, welcome back to the show, Texas Business Radio. Texasbusinessradio.com is the web site. We’re down to George R. Brown Convention Center in Houston, Texas at the 2017 Valved World Americas Expo and Conference. And we’re learning a lot about the world of valves and all the industries that that applies to. Now, normally we talk about middle market business and smaller business. We’ve got a very big business in here today, that ends up putting a lot of smaller businesses to work. We’re going to talk a little bit about that. Guys, we’re glad you’re here. Go ahead and get your questions in 844-814-8144 is a 24 hour call in line. That means 24 hours, call now, call in the middle of the night. Doesn’t really matter to us. We’re going to get the experts in here to get those questions answered. Couple other ways to get in touch with us, #TBR on Twitter or go to Texasbusinessradio.com. Send us an email from there. Either way, get your questions in, we’re going to get the experts in here to get those questions answered, somebody smarter than us to get you the correct answer to those questions. I’m your host Matt Register, here as always with Jay Curry. Jay talk to me.
Jay Curry: What fun this is. I mean, this is going to be great because it’s a huge company that’s helping middle market and smaller companies. But this, this whole Valve World we’re at now is just very, very interesting, with very interesting companies from all over the world. I’ve never been to a place that had so much. It’s over 50 percent, I think from outside the US. We’ve got some good old Texas, I’m sure too. This is exciting. I can’t wait to hear your story.
Matt Register: Yeah, no doubt. Guys, if you’ve ever been to Houston, you’ve ever driven down 225, you’ve seen some of the plants. There’s, there’s a valve or two in that big pile of pipes. And one of the companies that provide a significant amount of those is called Metso, a finnish company.
Todd Harrison: That’s correct.
Matt Register: And we have Todd Harrison, Strategic Account Manager for Metso. Welcome to the show.
Todd Harrison: Thank you very much. Appreciate you having me on.
Matt Register: So Metso, what do you do? Who do you do it to?
Todd Harrison: So Metso is a major global valve manufacturer. We manufacture valves, instrumentation and actuation. Our focus, right here, today is the oil and gas industry in the Texas area. So, like you said, you get on, you get in your car, you drive out 225, what do you see? You see smokestacks everywhere, coker units, refineries, plastic plants and all that. Our goal is to help those guys keep those plants up and running.
Matt Register: And you see opportunity when you drive down that street because everyone of those pipes has valves attached to it. Right?
Todd Harrison: And unless you’re my boss, who says “How come all those valves aren’t ours.
Matt Register: That’s right. You want everyone of them. Right? So tell me a little bit, because you know in Houston the energy business has been, I think the economists refer to it as a bloodbath. Right? I mean it has been, has been tough on the upstream side. Right?
Todd Harrison: Oh, absolutely.
Matt Register: How has that affected you guys in the downstream side?
Todd Harrison: Absolutely. So our downstream market is not as fluctuating as the upstream market. And we cater to people that make gasoline’s and plastics, fertilizers and paint additives. And so as long as you’re still driving your car, as long as your kids are still playing with toys, people still need these products. The downside of it is most of these companies are owned by major oil and gas companies that have upstream and downstream operations. And when things start getting tight, what’s the first thing they do? Cut CAPEX.
Jay Curry: Sure, right.
Todd Harrison: OK. So that CAPEX get cut upstream and downstream. So we do get an effect. The swings just aren’t as big as what they see in the upstream market.
Matt Register: Well the good news is tho, pent up demand sometime, pent up maintenance sometimes ends up coming back and it ends up finding a way to even out. We were talking during the break about a significant amount of y’alls work in Texas because you guys have a significant Texas operation on the repair side…
Todd Harrison: There’s no doubt.
Matt Register: Of your business comes during scheduled and planned turnarounds of these plants but sometimes stuff breaks when, when they don’t plan on it. Right? And talk to me a little bit about that, because you guys use a significant amount of Texas mid-market businesses when things like that happen because you need product, you need product fast.
Todd Harrison: Yeah, Right. We depend on our reps and distributors to keep inventory here in the Texas Gulf Coast. So as these plants get their operation and their capital expenditures cut, they have to keep these units up and running. Right? Which means more day to day maintenance. So that’s why we have the service center here in Houston. We support all the Texas, in Texas operations where our valves are install. We also partner with distributors and Reps. Companies like Rosson, who is a good strong company from Houston, been around since 50’s. Branches in Texas, in Corpus, branches in Beaumont, Deer Park, Freeport. You know anywhere where there’s a chemical plant, you can find these guys and they’ll have inventory. Inventory of our vales. So when that company, when that ExxonMobile needs another valve, they’re the guys that get the phone call, they’re the guys that are putting actuation on it, customizing it and getting it out the door.
Matt Register: No, absolutely and solving their problem. Now, oil field and energy is not the only place you guys have valves. I find it fascinating because we tell companies all the time, diversify what you’re doing. Right? If you’re in one single industry, you’re running a risk that industry is going to have a downturn. And expanded into another one and even more so, you know, on product lines. You know, diversify all of that. You guys are into well more than energy. Tell me a little bit about what else you guys are placing valves in.
Todd Harrison: That’s exactly right. So one of our biggest industries and one of the places that we grew as a brand over the over the last 50 plus years is pulp and paper. So some of the very difficult applications within that process, especially pulping the wood, require some very, very tough valves. And we make those valves and have been supplying valves in that industry for 50 plus years.
Matt Register: Well and I tell you, you know, as you talk about moving product through pipes that is something different than just water. Right? All the sudden you have to put… There’s a lot more technology that goes into them than, than, than your faucet at your house. Right?
Todd Harrison: Yeah, there’s no doubt about it. So if you look at a chlorine application for example. Specific clean specifications, specific materials those valves need to be made out of; Hastelloys, alloy 20, monels. That’s a completely different valve than say is at the water fountain over the restroom, you know, down the corner. So…
Matt Register: No doubt. And it takes a whole lot of, of, of industry knowledge. It takes a whole lot of, of engineering ability to be able to get the right product for the right application. Right?
Todd Harrison: Correct. Yeah. And so they expect guys like us to have that industry knowledge. So we’re not having to call somebody else to ask thoose kind of questions. We, we go and see our customers and share our information with them and they share their requirements with us. We put that together and form a plan. Sometimes those strategic partnerships become, you know, something that be on paper. Supported by these local reps and distributors. And give those guys the kind of business, the kind of service they need on an ongoing basis.
Matt Register: Well, one thing I learned during the break, that I didn’t realize is, you guys have a significant presence in the mining industry, in rock crushing industry and that’s out of San Antonio. Right?
Todd Harrison: Exactly. We have a big rock crushing operation out of San Antonio and those guys can really do some incredible things. They can, they can crush, like a car in like in 30 seconds flat or something unbelievable like that. It goes from a full car to a pile of metal at the end of the day.
Matt Register: Yeah. No doubt. Todd Harrison, Strategic Account Manager for Metso. Todd, thank you very much for joining us.
Todd Harrison: Hey, I appreciate you guys. I Absolutely enjoyed it.
Matt Register: So, what is the easiest way for somebody to get in touch with you, should they want to?
Todd Harrison: So, www.metso.com/valves. We have a operation here in Houston 281-445-9989. Feel free to give us a call and we can help you out with whatever you need.
Matt Register: All right, wonderful. Thank you very much for joining us. Guys, we’re gonna have to go to a break. We are going to have links to everybody we’re talking to, right there from Texasbusinessradio.com. And that Web site, if you do have a chance to take notes, www.metso.com/valves. Right?
Todd Harrison: Backslash valves. That’s correct.
Matt Register: All right, guys we’re going to have a link right there from Texasbusinessradio.com. However, we got to go pay some of our own bills. So we’ll be right back. We’re going to take a quick break. We’re going to be right back with a whole lot more from the 2017 Valve World Americas Expo and Conference, here at the George R. Brown Convention Center in Houston. We’ll be back right after this.
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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.