In a normal year, it's one thing to relocate a headquarters, bring an expanded plant and a newly constructed facility to full operational efficiency, hire a new team of finance and IT specialists, and launch a fire-resistant conveyor belt for the coal mining industry.
It's another to do it during a recession.
That's the situation Cassandra Pan faced when she became president of Fenner Dunlop Americas midway through 2009.
But she and her team overcame any obstacles they encountered because Fenner P.L.C.'s North American manufacturing operation is strong from within and has a dedicated work force, she said.
As for the recession itself, which was the biggest problem all companies faced last year, Pan said that “when others see crisis, we see opportunities.” That period of adversity “enabled us to fully understand and appreciate the core values of our business, which are the loyalty and quality of our customers, distributors, employees and business partners.”
Meeting customer criteria was and is an important factor, according to Al Bonneau, senior vice president, industrial division. He said satisfying customer needs always has been important to Fenner Dunlop, and “that's exactly what we do—we meet those needs.”
The company was focused on striking a healthy balance between meeting customers' expectations and operating performance, according to Pan. “In addition, we strengthened internal communication with our work force to keep them abreast of our challenges and performance and got their support through this difficult time.”
Strong mining sector
Discussing Fenner Dunlop Americas at NIBA—The Belting Association's annual convention, held Sept. 18-21 in Phoenix, Pan not only looked back at 2009, but at where the company is today and toward the future.
What started out as a poor 2009 turn-ed into a year of rapid recovery for Fenner P.L.C's North American belting business, she said. The environment for the firm's conveyor belting operation remained strong, especially in the coal mining sector.
Improvement in the mining market was propelled partially by the implementation of the Mine Safety and Health Administration's higher fire-resistant standard for underground belting. That regulation meant numerous underground mines across the land needed new belts.
“Our new Fire Boss range of products combine safety and durability for our coal customers,” Pan said. “This has been a great success and underpinned our operating performance in 2009.
“Although the industrial belting market demand was still sluggish, overall our North American business has performed well and contributed to Fenner Group's success.”
In November 2009, Fenner Dunlop Americas moved its corporate offices to Pittsburgh from Scottdale, Ga., because Pittsburgh is the heart of one of the company's largest coal mining sectors and the site puts it in closer communication with its customers, Pan said.
The center of the firm's belt service operation is an hour east of the city and the new headquarters is within driving distance from its manufacturing operations on Ontario and Ohio. The only drawback to the move was the loss of some experienced and loyal personnel from Atlanta, she said, and it was without a doubt the toughest decision management had to make.
Because of that, Fenner Dunlop Americas had to hire a new team of finance and IT personnel in Pittsburgh.
Bucking the trend
Fenner Dunlop Americas has invested more than $200 million in its operation in the last three years.
The bulk of it has gone toward construction of a textile fabric weaving and treating plant in Lavonia, Ga., expansion of its Port Clinton, Ohio, conveyor belt factory, and the purchase of service businesses.
“Now we have a fully integrated conveying solution starting from yarn pre-paration to belt manufacturing, installation and maintenance,” Pan said.
Equally important, she said, “unlike our competitors who invested heavily abroad—mainly in China, India and South America—we have made major investments in North America to upgrade our manufacturing capability and technology instead.”
When companies are making belts overseas for customers in the U.S., they're guessing what the customers really need, Bonneau said. “Our production plants are right here. We're close enough to get it right” and provide prompt service.
Fenner Dunlop focuses strictly on the customer, both Pan and Bonneau said. “We believe in thinking global but acting local,” according to Pan. “Conveyor belting is a bulky and heavy material to transport, and changing currency and freight costs could jeopardize the economics of the foreign supply base.”
In the long run, Fenner Dunlop saves customers time and money by manufacturing belts in North America and providing service capabilities, Bonneau said.
The company's other competitive advantage is being able to deal quickly with the ever-changing needs of customers at both the service and technical application levels.
“Having total control over the design and manufacturing process of fabric and belting are so critical to the quality assurance of our products,” Pan said.
She said the operation's state-of-the-art production facilities in Lavonia, Ga., for fabric weaving and treating, and Port Clinton, for belts, have strengthened the firm's competitive advantage with both customers and in the marketplace.
Fenner Dunlop's strong distribution network, spanning through the U.S., Canada and Mexico, is a big part of the company's current success, Bonneau said.
“It's an extremely strong group,” he said. “They install, splice and service belting. You can make the best belt in the world, but if it's not installed and spliced properly by trained technicians, it won't do you any good.
“We also own 10 service operations so we have excellent in-house competency. I believe we have the strongest distribution and service operations in the world.”
Looking ahead, the Fenner Dunlop officials believe the North American market will continue to improve. All indicators suggest that the coal mining market will remain steady while the industrial sector should be better than last year.
“We are operating at high efficiency and are more flexible now to respond to cyclical changes in the marketplace,” Pan said.
“South America is a huge market and fast growing. We don't have a manufacturing facility there, but we have a strong service operation in Chile and we are expanding rapidly,” she said. “We have recently appointed a highly respected industry veteran, Peter Klaus, as president (of the South American operation) and I am very optimistic about our future there.”
Overall, Bonneau said, the company's national accounts business is quite strong and that's a good indicator for the future.
Pan said the company is now in a position to offer customers a full “conveying solution, belts plus service plus components.” Its future plan is to focus on “value creation for our customers and explore win-win partnerships and benefits based on our Total Cost of Ownership concept.
“We believe that we will only increase our profitability and success if we can provide, measure and improve safety and conveying performance to our customers.” The firm plans to do that by integrating TCO with its Life Cycle Management concept.
When the company's customers are more profitable and successful because of Fenner Dunlop's programs and innovations, “we expect them to share that value with us,” Pan said.