Elkhart, Indiana-based NIBCO has come a long way from its beginnings in 1904 as a manufacturer of brass keys for musical instruments.
Today, the valve, fittings and flow-control products manufacturer has grown to nine U.S. manufacturing facilities and five distribution centers and employs 2,200 people, while offering more than 30,000 SKUs to its customers. Spanning five generations of family leadership and associate ownership, NIBCO remains privately-held and is positioned for growth in a global marketplace. In the last two years, NIBCO has expanded its footprint with the acquisitions of Sure Seal and Webstone, further expanding its reach in the industrial and hydronics markets.
pme recently visited NIBCO world headquarters in Elkhart and talked with President and COO Steve Malm and Senior Vice President of Sales Ashley Martin (who represents the fifth generation of family ownership) about a variety of topics, including the company’s large investment in research and testing, its current expansion projects, the Webstone acquisition, plus its views on the industry and NIBCO’s future.
pme: What does the current landscape in the industry look like?
SM: We see a pretty good building environment in the near-term. Housing starts are tracking with household formations, so that trend is improving. We’re seeing data that suggests 1.5 million household formations a year through 2020, which is much better than the 900,000 average the last five years. The nonresidential construction recovery is nearly complete and the remodeling and repair market is strong.
pme: What trends are you seeing throughout the industry?
AM: Technology has taken off. Anything that helps shorten labor time or makes it easier for installers is popular. For us, press has gained momentum and PE-RT and PEX have made it so much easier for contractors. We’re also seeing the hydronics market taking off. That’s an area that’s doing very well for us since we’ve been in the market with Webstone.
SM: One of the mega-trends we are seeing is the difficulty in securing labor at any level. It’s hard to find good people. Any product that makes installation less time-intensive is going to be successful for us. We are expanding into different materials with our press valves and fittings line for gas and ACR applications. PE-RT and PEX are changing the way you plumb a house. Our Webstone products cut down on the number of components used in a hydronics system, reducing the number of potential leak paths. Any technology that makes it so the contractor spends less time and labor is what people want.
pme: How is NIBCO addressing the labor shortage?
AM: Labor is tight. More and more people are retiring and not as many people are going into the workforce. The shortage will continue. That’s why we have a sales-training program to bring young people into the industry and we are big supporters of ASA’s Women in Industry. Fifty percent of the labor market is women, but our industry is a little different. That’s a huge pool of people to find talented and quality people from.
pme: What was attractive to NIBCO about acquiring Webstone?
AM: It was a perfect marriage for us. We’re well-known for providing valve and fittings solutions in the industry and the Webstone acquisition allows us to become involved on the hydronics side, which they are known for.
SM: It’s the scale in general. By combining the niche of a smaller, specialized business with the resources and distribution network of a larger company, we can deliver more innovation at higher levels of service and support for customers.
pme: How do your expansion plans ($100 million capital investment over the last four years) factor into your manufacturing facilities and DCs?
SM: Bottom line, re-investing in the future of our American manufacturing facilities means re-investing in America. In total, we are adding 350,000 square feet to our manufacturing facilities in Greensboro, Georgia (already operational), Goshen, Indiana (opened in February), Blytheville, Arkansas and our Stuarts Draft, Virginia location that will be operational in 2019. This allows us to expand our capacity, develop next-generation manufacturing technologies and launch new products.
pme: What advantages does the DARE (Development and Applied Research Engineering) lab in Elkhart give NIBCO?
SM: It helps us make better decisions and acquire the best possible information about the products we manufacture. We do our own testing there. We don’t lose time sending products out to third parties. We are free to test as many products as we have to in order to learn more. There is that old saying, know what you test and test what you know. We’re able to run tests and learn about these products and their capabilities in real-time as we work through the product-development process.
pme: What sets NIBCO apart from the pack?
AM: We just did a brand study and the results show we’re the No. 1 brand in terms of rough plumbing. We think that’s because of our long 113-year history of innovating and manufacturing high-quality products. Also, we’re here in the U.S. Our plants are here and that gives us the ability to react faster to situations and it gives our customers high service levels (more than 98% fill rates) and short lead times.
Another difference-maker for us is we have a factory-direct salesforce of 75 outside salespeople (NIBCO uses manufacturers rep firms for Webstone and for certain specialty channels). They can focus on NIBCO full-time in NIBCO markets with NIBCO customers. We’ve continued to add to our salesforce even during the recession when we established our sales-training program. We also have specific commercial sales managers who work with engineers to make sure NIBCO products are specified in designs.
SM: Our customer-service and technical service teams are second to none. We answer the phone in 20 seconds or less — a real person, not a computer-generated voice. Customers count on our easy accessibility and product expertise.
pme: What does Made in the USA mean to NIBCO?
AM: Back in the 1990s and 2000s companies were looking to go offshore, but we made the conscious decision to not do that. We believe in products being made in America. We believe in our associates here and we are able to thrive because we make products in the United States (92% of all NIBCO products are manufactured in the U.S.). We have a motto here that our biggest asset is our NIBCO associates. They have helped us grow and have allowed us to stay in the U.S. It’s a key strategic area for us and we don’t see that changing anytime in the future. We will continue to improve what we are doing here in the U.S.
pme: What does the future hold for NIBCO?
AM: In the short-term, we’ve acquired two companies in the past two years and we’ve expanded our product offerings. We see a lot of continued growth in the short-term. In the long-term, we’re going to continue to invest in our plants and future as we continue to make quality products for our customers.
SM: It’s hard to say how the industry is going to change, but it will change. As long as we are actively working on continuous improvement and keep changing with the needs of our customers in mind we will be fine. We are up to the challenge.