Wilo continues to expand in North America

BY MARY JO MARTIN

Editorial director

Wilo AG, which is now comprised of 45 companies on four continents that employ in excess of 5,000 people, was originally founded as a maker of brass and copper products by Louis Oplaender in 1872. In 1928, his son, Wilhelm, was awarded the first patent for a circULating pump. Fast-forwarding to 1984, Wilo acquires the French manufacturer Pompes Salmson, which had the same product portfolio and size as Wilo and was -- and still is -- a market leader in France. This led to the company becoming one of the world’s largest manufacturers of wet rotor technology.

Today, Wilo manufactures and assembles its products from eight locations around the world. For the North American operations Wilo AG has founded an extra subdivision called Wilo Nord Amerika GmbH which is unprecedented in the company and underlines the importance of the North American customers for the group. Wilo has assembly/warehousing facilities in Chicago, Thomasville Ga., and Calgary.

In two short years, the North American operations have grown from a “vision” to a reality that includes 55+ employees. In the clear water products and hvac markets, president William “Bill” Lowe is supported by vice president-sales and marketing Sheldon Schiffner and vice president-training and technical services Steve Thompson C.E.T. The sewage products division is run by Terry Rouse with vice presidents Encil Webster for municipal sales and Jed Pratt for industrial sales.

The North American business currently services residential pump products, commercial pump products, municipal pump products, sewage pumps and mixers. Wilo’s recent purchase of Mother and Platt in India will allow the company in future to expand into the split case pump market as well as the vertical turbine pump market.

Today, Wilo AG is still privately owned by the Oplaender family headed by Dr. Jochen Oplander, the founder’s grandson -- and succession planning in place will ensure that the company will continue under fourth-generation family members Jan and Felix Oplaender.

Recently, editorial director Mary Jo Martin interviewed the president of Wilo usa and Canada Bill Lowe to learn more about the company’s North American operations and future plans.

MJM: With operations in Europe, Asia and North America, what efforts does Wilo make with r&d to manufacture products that meet the needs of different countries with differing standards?

Lowe: Our North American product offering is a prime example of Wilo’s flexibility. Every single pump you see in North America has been re-engineered to meet North American requirements. Things such as flange sizes, UL (ULC) approvals, assembly bolts and electrical requirements are all modified to meet North American needs.

To be a global manufacturer, you must make even your most sophisticated equipment user friendly in all markets. It would be of little value if we engineered the best pumps in the world but they were not user friendly for a contractor in, say, New York. From the day we began planning for our entry into North America, we began looking at what the “end user” expects from us.

MJM: Describe the leadership at Wilo in North America, and their philosophy regarding customers, employees and operations. Is the leadership actively involved and accessible?

Lowe: Globally, Wilo is known as a “family” business. We all have titles and roles within the company, but at the end of the day we all sit down as equals. What impressed me most about Wilo when I was considering joining this family was their concern for the people that work within the company.

As we developed a business plan, one of the most important questions we asked ourselves was how many people will we employ? The bottom line is as important to Wilo as it is to any business, but people are the reason for the business. If we do not enhance the lives of our friends, families, co-workers and customers, then we have missed the point of being a business.

MJM: Who are your primary customers?

Lowe: Wilo AG has a global policy that all products for residential and commercial building services are sold through wholesale distribution. For this reason, in the U.S. and Canada all hvac products are distributed strictly through wholesale distribution.

MJM: How are your sales divided between residential and commercial?

Lowe: Wilo is a very diverse company, strong in both residential and commercial markets. The recent introduction of our top s commercial wet rotor circulators has been an instant hit with school boards, hospital boards and extended care facilities around the continent. While our residential circulators have always been widely accepted, we’re one of only two companies that manufacture a commercial wet rotor circulator.

MJM: Do you go to market with independent representatives or a factory sales force?

Lowe: Our distribution is through independent representative organizations that are supervised by our network of regional managers. I have always believed that independent representative organizations offer a manufacturer the best opportunity to form partnerships at the wholesale level. Our group of select representative companies are very technical, well trained on Wilo products and well accepted amongst their peers. The strength of our company is in our ability to supply our representatives with the tools they need to market our products with pride. They are part of our family.

MJM: Where are your North American warehouses that handle distribution? Approximately how much inventory do you typically have on hand?

Lowe: Our three North American facilities are involved in the assembly and testing of our products. In Chicago, we assemble and test our inline pumps for the commercial hvac market. Calgary is home to our assembly and testing facility for water well pumps. The Thomasville, Ga., facility handles the assembly and testing of sewage pumps up to 1,000 hp. We also have a new factory under construction in Thomasville that will be open in June. It will be equipped with one of the most modern pump test facilities you can find in North America.

Wilo maintains parts and product inventory levels that allow us to offer the quickest deliveries in the industry.

MJM: How has Wilo changed to correspond with changes in the industry as a whole?

Lowe: Wilo is a technology leader in the industry. Our global operations run state-of-the-art IT and business solutions. Through our international website, customers can access easy-to-use service tips, order parts for product repair and make selection of new products. In North America we are in the process of establishing electronic order entry and purchasing systems that tie directly into our global systems.

MJM: Can you share with readers the types of training that you offer and why this is such an important benefit?

Lowe: Our corporate tag line is “Pumpen Intelligenz.” While this tag line reflects our overall corporate philosophy, it is best reflected through our commitment to education. At Wilo, we manufacture pump solutions that are unique to the market. It was no accident that the third person hired by Wilo USA was our vice president-training and technical services.

In order for our customers to appreciate what we do differently and better than our competitors, it is our obligation to teach them. As anyone who attends a “Wilo Brain” training session will attest, we do not just teach them about Wilo, we teach them about systems and how our products enhance the overall performance of the system. I invite anyone -- contractor, wholesaler, engineer -- to attend a Wilo Brain session either in Chicago or Calgary. Or if you have a group of 10 or more, we will bring the “Brain Box” and our training to you.

MJM: What are some of the other ways that you work to educate and solidify your relationships with customers?

Lowe: We invest heavily in training our representative organizations. This year, we will be equipping each company with a dedicated trainer who is able to conduct local “lunch and learn” as well as two-hour hour “Mini Wilo Brain” sessions. Our “Train the Trainer” philosophy is global in nature and is demonstrated through the number of training staff we have globally -- 68 people! Now that’s Pumpen Intelligenz.

We have also recently invested in eight Wilo Brain Boxes, a systems education tool that teaches about the basic components of the system, how they work, and what happens when they don’t work. Of course, the Brain Box has our name on it and our pump, but the purpose of this tool is to train customers on hydronic system design. Our Brain Boxes are circulated throughout the U.S. and Canada with stops at technical schools, trade shows and Wilo Brain training sessions.

MJM: How have customers’ expectations changed in recent years?

Lowe: I have been selling hydronic heating equipment in North America for almost 30 years. In the early days, the desire for education on new systems and methods was present, but the opportunity to apply new technologies was rare. Now the demand for better system design, coupled with a real need for improved system efficiency, is forcing manufacturers to create superior equipment and training methods.

The thirst for knowledge plays a key role in contemporary business partnerships. Wholesale companies select their business partners based on features and benefits rather than price. As everyone looks to improve margins, it is being realized that manufacturers must be able to add value to our customer. Our customer’s customer relies on the wholesaler to keep them educated and profitable. We must help our customer to be knowledgeable, not just on our products but also on system design in general.

MJM: With so many sources of competition, how does Wilo differentiate itself in the marketplace?

Lowe: It is Wilo’s dedication to “Pumpen Intelligenz” that makes us different. We dedicate 3% of gross annual revenue back into research and development. In Dortmund, Germany, and Aubigny, France, we have over 200,000 square feet of space dedicated just to product development and systems design. We have in excess of 80 people working on new technologies. As I stated, with this commitment to product innovation comes the necessity for market education. I only hope that each and every one of your readers gets the chance to visit a Wilo Brain Centre at one of our global manufacturing facilities and see how “Pumpen Intelligenz” translates into quality control and pride of manufacturing.

MJM: What have been some of your most recent product introductions?

Lowe: This is an interesting question. We are currently launching a new product line per month all of which are exciting. Many of these products are improvements to currently existing competitor’s products. If I had to select the most exciting new products, I would have to start with the Stratos. We have been selling this product in Europe for six years and are now making the necessary modifications to make the product usable in North America. The Stratos is unique in that it offers up to 80% energy savings compared to traditionally accepted hvac circulating pumps and comes with all the different ways of settings which make your system more efficient. In this day and age when we are all trying to protect the environment, the Stratos will become the circulator of choice to anyone designing energy efficient buildings.

MJM: What products are you best known for?

Lowe: Traditionally, the name Wilo has been recognized as the leader in wet rotor pump technologies but recent expansions and acquisitions are making us recognized as a leading supplier of fluid handling products. Our sewage mixers are considered to be the best in the world and as this secret spreads across North America our image will change. Globally, the name Wilo is recognized as a manufacturer of superior engineered high-quality products.

MJM: Are you comfortable sharing information on the growth Wilo is experiencing?

Lowe: In 1999, Wilo AG reported sales of $650 million; six short years later, we have surpassed the $1-billion mark in annual turnover. Many companies can show this sales increase, but few can say they did this while increasing the number of employees by more than 80% and at the same time increasing corporate profits.

MJM: What are your growth projections/plans for the future in the North American market?

Lowe: North America is a tough market. We have very strong competitors that manufacture very good products. None of these manufacturers are going broke or surrendering any market share to us. We are experiencing good solid growth through increase in overall market size. Our highly innovative product design will help us to be recognized as the technology leader in pump design and application. The next several years will see us grow at a healthy, but steady, pace while our competitors continue their path of success. Our commitment to North America will continue as we are planning for an Eastern U.S. facility, a Western U.S. facility, and an Eastern Canada facility, followed by a second North American factory.

Yes, you heard that right, Wilo is a company that is building factories in North America. We expect to have a staff of 450 people by the end of 2009.

For additional information, visit www.wilo-na.com.