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Legg expects to continue growth under ContiTech

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Photo by RPN photo by Mike McNulty From left, Jan Faerber and Ron Marler of Legg discuss the latest developments at the company with Michael Hogle of Hoffmeyer Co. at ContiTech's hospitality suite.

Executives at ContiTech A.G.'s North American operations want the business to grow quickly in the U.S. during the next two years without sacrificing quality, and are looking to expand the firm within three to five years.

That's the primary goal of Christoph Seeger, market director for ContiTech Conveyor Belt North America, and Jan Faerber, the new president of Legg Co. Inc., which ContiTech acquired July 1.

With the Legg deal completed, the company has several plants on the continent: one in Mexico that makes flat belts for the industrial and mining sectors and six in Halstead, Kan., all part of Legg, which produces agriculture belts and a wide range of belting for the industrial market.

"It's not just agriculture belting at Legg," Seeger said. "We make plenty of heavy duty belts at the plant." And eventually that capability will create a wider avenue for ContiTech to make greater headway in a number of industries, he said.

Legg expanded its complex of small plants to a combined 100,000 square feet in 2012 when it added a 25,000-sq.-ft. factory to house a new 110-inch, four-roll inverted L-calender.

"Since Jan. 1, we have been able to make 96-inch wide belting," Seeger said at the NIBA—The Belting Association conference, held Sept. 12-15 in San Antonio. "We are now on the same page with Fenner Dunlop and Veyance and plan to make a greater effort go after more mining business in the U.S. and Canada."

He said ContiTech, which is adapting its strategies to the U.S. market, is in a good position to do so in North America because its well-tested, highly successful Fire Sentinel fire resistant belts are available for mines.

Improved service

Christoph Seeger sees great potential for growth at newly acquired Legg.

ContiTech completed work on a customer service center at its North American headquarters in Montvale, N.J., that will service customers across the continent.

Previously, the company only operated a premium service unit at its Northeim, Germany, location, where its parent company is based.

"We are very happy to support our customers' needs by having our glues, adhesives and lagging materials in stock (in the U.S.) and ready for shipment in a timely manner," Seeger said.

The company recently added a splicing kit center in Mexico and is now able to make any kind of kits for customers on a non-exclusive basis.

It also is expanding its sales force across the board in North America, according to Seeger, but remains very focused on its distributors. The firm is attempting to expand that network in the region.

"We've always worked well with and are very loyal to distributors," he said.

The company relies on exclusive pacts with distributors for its ContiTech offerings, but Legg's belts primarily have been a second source for distributors over the years.

"Legg is a good option for distributors who don't want an exclusive contract but need a second-source supplier," he said. "It is non-exclusive with a couple of exceptions—two or three (exclusive contracts) in the U.S. and three in Canada," Seeger said.

ContiTech's plan "is not to own a bunch of service centers," he said, but rather to work with distributors on that end of the business. "We're strong in manufacturing, not distribution and on the service center end. That's where they come in."

Smooth transition

The transition from a Legg operation to one operated by ContiTech is going smoothly, according to Ron Marler, former vice president and co-owner of Legg and current consultant to the company. "ContiTech took good care of our employees."

He said ContiTech opened up some new markets for Legg.

"It's teamwork," Faerber said. "We want to do what Legg has done for the last 20 years."

One gradual change that will occur at Legg's plant in Halstead will be the production of ContiTech belts, Seeger said. "We are being very cautious on when we'll start because we want to ensure the compounds we use meet our standards."

The Halstead complex, which employs about 105, has enough space available to add equipment that can produce the ContiTech brand of belts along with the Legg brands, he said.

Legg has had a strong presence in agricultural belting for many years. Faerber hopes to grow that end of the business.

"We're not No. 1 yet in the ag business," Seeger said, "but that's our goal."

On the flat belt end of the business, the combined company focuses on the cement, power plant, port handling, steel, paper and pulp sectors.

"We expect to grow in the North American market," he said. "I'd like to double sales in the next two years. We want to close the gap with Veyance and Fenner Dunlop."