Powell Valve continues strong,

independent valve industry position

BY MORRIS R. BESCHLOSS

PVF and economic analyst

When I first entered the valve industry on October 1, 1956, I learned quickly that five dynamo companies carried the industry’s most hallowed brands:

• Crane
• Walworth
• Lunkenheimer
• Jenkins
• Powell.

Today, Powell continues as a full-line domestically based and independent inheritor of the original valve leadership group.

Powell is remarkable in many ways. The original William Powell Company was founded in Cincinnati, Ohio, in 1846, and has continued to produce an ever-expanding line of bronze, iron and steel gate, globe and check, as well as ball valves. It also features one of the world’s most comprehensive lines of cryogenic valves in a wide range of sizes and material.

Powell Valve has endured a Civil War, World Wars I and II, and the Korean and Vietnam Wars. Powell rebuilt after floods, U.S. economic disaster in the Great Depression, and fierce foreign competition to help put men on the moon. Whether it was the “Manhattan Project,” projects on U.S. nuclear submarines, pulp and paper mills, or the harshness of cryogenic use, Powell Valve has a long tradition of quality in temperatures from -425 F to 1,500 F and pressures from Class 125 to 4500.

Powell’s market base is the industrial user: petrochemical, industrial gas, pulp and paper, pharmaceutical, hydrocarbon processing, food processing, mining, power generation, pipeline, chemical and mechanical construction. Powell has formed business partnerships with industrial distributors, end-users, contractors, and a&e’s in the U.S. and around the world. Business partnerships formed on competitively priced products, on-time delivery, service and the tradition of product reliability.

Powell’s network of support and product availability is seldom matched. Powell claims the most complete multi-turn product line from a single source manufacturer. Powell’s products are of the highest-quality standards and are produced with modern manufacturing technology and astute materials sourcing, with strategic purchasing and financial ventures in place.

Powell’s diverse products and services, industry knowledge, project capabilities and reputation, coupled with its high-quality distribution network, offer a win-win arrangement where the distributor, end-user, contractor and manufacturer can all benefit.

The William Powell Company has made a commitment to the pvf industry to increase growth and market share, with quality competitive products and services on-time delivery. The company has made this a global commitment.

Powell’s end user customers have to react quickly to the demands that are placed on them to expand their businesses by implementing increased capacity and introducing new products into the market place at low cost and fast turnaround times. Powell has addressed its customers’ needs by increasing finished product inventory to over $25,000,000 in the U.S. and with inventory hubs in Asia and Europe.

Powell also used its valve knowledge and expertise to construct a modification facility in the U.S. to assist customers with their needs such as automation, trim changes, end connection changes, additional quality inspections and special service pressure testing requirements, field service, etc...

My own lengthy valve industry involvement has allowed me to be personally acquainted with the outstanding leadership of this great company, which has had only nine CEOs in its 162-year history.

Dave Forker, a former Powell Board chairman, brought me on the board of the Valve Manufacturers Association in 1964. The late Andy Coombe, whose family held controlling interest in Powell for several generations, was on my executive committee when I became chairman/president of the vma in 1970.

But Randy Cowart, who has guided Powell through its most precarious times for the past 22 years, has perpetuated his company’s leadership when others had lost their previously exalted positions. Therefore, I’m privileged to present the following exclusive interview with an illustrious industry associate.

Beschloss: Randy, yours is one of our industry’s great success stories. From working for a pvf distributor in Florida, you are now Powell’s majority stockholder. You must be very proud of this singular accomplishment.

Cowart: I was lucky, early, to work with and be exposed to some great people in distribution, manufacturing and end user customers. From my beginning days working for Gordon Helms and Eddie Parker at Parker Helms Supply Co. through my long career at Powell Valve, I have met many wonderful people and I am fortunate to call most of them my friends. I have to also mention and thank my parents for giving me the best experience a kid could ever have.

Beschloss: You have expanded your family’s interest in the future of Powell by bringing your son, Brandy, into the management structure. Could you tell us about his activities?

Cowart: I have two super children. Carmen, my daughter, is a great athlete and enjoyed a very successful, All-American career at the University of Florida. Brandy attended Ohio University, (baseball, business and economics) and Xavier, mba. Brandy was brought up through Powell. Like most of us, he started out working in one of our warehouses, and then moved up through outside sales.

Brandy is responsible for both domestic and global sales’ organizations. Powell’s sales are approximately 60% North America and 40% international. He is responsible for product expansion as well. As part of Brandy’s corporate responsibilities as executive vice president, he has taken the reigns of our it department to make our systems totally customer friendly, both for internal and external customers.

Beschloss: Please tell us about your continuing manufacturing installations in Cincinnati and South Carolina.

Cowart: Cincinnati, Ohio, is our headquarters. The only manufacturing activity in Cincinnati is our bronze foundry, which pours all castings for our bronze valve line as well as cryogenic valves. Orangeburg, S.C., manufactures our bronze, cryogenic, 2-inch and smaller stainless and high-alloy products. Manning, S.C., manufactures carbon steels, stainless steel and high-alloy valves. We have a plant in Manning that does extensive valve actuation and built-to-order customer modifications. This plant has a very high reputation with many of our country’s largest electric power companies, engineering companies, construction companies, as well as the U.S. Department of Energy.

Our entire U.S. valve inventory is warehoused in South Carolina. As you mentioned, our ready-to-ship from stock inventory is over $25 million.

Beschloss: Please discuss your overseas facilities and your controls for maintaining your domestic high standards.

Cowart: Powell’s controls on both our international plant(s) manufacturing as well as the supply chain of miscellaneous components, fasteners, packing, gaskets, paint (which is low lead) is unwavering. Powell is an engineering-based company. All designs and specifications start in engineering and are managed by our Engineering and Quality Group. Powell owns all tools and patterns that are used to cast, forge or machine our valves. The manufacturing process and quality process is very tightly controlled.

Powell’s customers demand and get tier-one quality products with the cost advantages of low-cost country labor. We have facilities in Romania, India, Italy, Taiwan and China. We are in construction of a new plant in China right now. Also, we are building a new international office in China that will consolidate our administrative people, manufacturing management, quality group and engineering.

Beschloss: Since Powell has always been a great advocate of pvf distribution, could you update us on its comprehensiveness and the frequency of staying in touch with these distributors.

Cowart: Distribution is the heart and soul of The Wm. Powell Company. We have distribution relationships that are more than 100 years old. I work with distribution daily. I’m also in contact with end user customers daily in support of our distributors.

Beschloss: Could you please expand on your sales force, including the number of inside sales members and regional managers, if any.

Cowart: Brandy’s inside sales team is made up of 12 guys and gals. We also have a capital project quotation team. In North America we have five regional managers. We also have six very good sales agents. Globally, we have two sales managers and sales agents in most industrial countries or world’s regions.

Beschloss: What is the extent of your marketing activities? Advertisements, public relations, catalogues, mailings?

Cowart: We support, as charter members, the Valve Manufacturers Association, the Valve Repair and Modification Council, the api (American Petroleum Institute) and the mss (Manufacturers Specification Society). We advertise in The Wholesaler, Supply House Times, Valve World, Stainless Steel World, Power Engineering and Chemical Publications. We have complete product catalogs and specialty product catalogs. We print catalogs in English, Spanish and Chinese. We also do special promotion mailings.

Brandy continues to expand our advertising and marketing budget.

Beschloss: Has export become a significant component of your overall business? If so, what part of the world provides you with the best growth opportunities?

Cowart: Our international sales continue to grow. Most of our international sales today come from the Middle East, India, Mexico, South America, Indonesia and China. We see this growth continuing. Energy and refining products have done well in small regions of Africa. Our sales in Western Europe are disappointing. We have several excellent end user customers that are building grass root plants in Russia in the near future.

Beschloss: Since your extensive product line is tailor-made for today’s booming pvf sector, has the impact of its growth had a significant impact on your sales revenues?

Cowart: Business has been very good. This period reminds me of the industrial growth in the 70s when the U.S. and Japan were the drivers. Today the growth is driven by the industrial revolution in China and India. It looks like this activity will be strong through 2009.

Beschloss: As a major participant at all levels of this massive industrial segment, are there any major plans to provide Powell with even greater growth acceleration?

Cowart: We are focused on adding several new products. Some of these are close to being on the market. This list is made up of pipe-line valves, quarter turn products and special products for the pulp and paper industry. Powell has a strategy to increase market penetration in several areas in the U.S. and Canada as well as regions in the world. Our goal is to continue to manufacture high-quality products of excellent engineering design complete with great customer service.

It’s as simple as that.

Beschloss: I’ve noted that the luster of the Powell name has lost none of its sheen. Does it continue to provide you with a significant advantage at all levels of the distribution channel?

Cowart: I would have to say that we have to earn our value each and every day. What gives us an advantage is our management’s accessibility and our proven reputation in working with distributors to add value to their service to the end user. We have always chosen to work with our distributors, not against them. We want to be our distributor’s “favorite” manufacturer relationship.

Beschloss: Despite the frequent buyout offers you have received, is there any interest in a possible company sale?

Cowart: I am contacted very often from all types of interested people. Powell is a great brand name that is known and respected around the world. Powell’s business continues to grow, we are profitable and we have no debt. Our shareholders are enthusiastic about the company’s future.

Beschloss: We are probably in the greatest growth surge the pvf industry has ever seen. Do you expect this to continue for some time to come?

Cowart: The global demand for pvf is at a record pace. The demand for electric power is high in developed countries and the developing regions. New refineries, chemical plants, pulp and paper mills are in the works. Oil and gas exploration is hot in the U.S. and tar sands activity in Canada is “wide open!” This will not change in the short term.