UCT Exhibitor Spotlight: Kem-Tron’s About Face

By Erin Nelsen, Online Editor | September 2010 Vol. 65 No. 9
A worker welds parts of a prototype hydraulic mud mixing machine at Kem-Tron's headquarters in Houston, TX.

Editor’s note: As we prepare for UCT’s first show in its Houston home territory in four years, Underground Construction will be spotlighting some of the Houston-based companies who teach, exhibit and do business at UCT. For information about attending or exhibiting at UCT, contact Karen Francis at kfrancis@oildom.com or go to http://uctonline.com.

In 2009, integrated systems manufacturer Kem-Tron barely broke even. Despite a market that’s flat in more ways than one, the company’s president says that as of September 2010 revenue has already matched the full year totals for 2009, with 30% growth expected by the end of the year. What made the difference?

The first challenge was to stop the bleeding, as the worldwide recession took its toll. President Michael Rai Anderson, P.E, explains, “We definitely saw a big impact from the economic downturn. Revenue was down about 40% from our 2008 high. So we came into 2010 knowing we needed to focus on rightsizing the company.”

Rightsizing meant determining which markets showed promise, and which were a waste of resources. Then the same analysis was turned on products and even the industries the manufacturer served. “We’d had kind of a shotgun approach in targeting geographical areas and industries, and we cut back.” The end result was fewer products offered in fewer markets and promoted to just two industries.

Cutting Back To Find The Sweet Spot
“We decided to focus on conventional drilling in oil and gas markets and HDD in underground and infrastructure markets. Geographically, we’re targeting six areas,” including North America, Russia, India and South America.

Cutting back isn’t usually the strategy that spurs a company to rapid growth, but for Kem-Tron it seems to be working.

Anderson admits the approach is counterintuitive.“It’s not easy to go to the board and say, we need to drop products, markets, and industries in order to succeed. But we’ve already achieved the same revenue as last year’s total right now in September, and we’re on track for a 30% increase in revenue. We’re going from breaking even in 2009 to a 20% profit margin.”

With the company’s focus newly defined, the next step was messaging to communicate that focus to the market. “We had to define our core competency, define a message that’s both marketable and memorable. We’re building a name-brand identity for our equipment.”