Eaton officials acknowledge that they may have been a bit behind the curve in reacting to the decline in the oil and gas market. The global conglomerate uses distributors to service both offshore oil production and onshore sectors—including fracking for natural gas—with a variety of hydraulic and industrial hose lines and related fittings and accessories.
“When the oil and gas market started to take the precipitous decline last year, we really didn't react to it very quickly just for the fact when a lot of the business goes through distribution, you don't necessarily see it right away,” said Scott Campbell, Eaton product marketing manager for fluid conveyance.
Eaton supports a lot of OEMs in the agriculture and construction markets, he said, so it is closer to the markets in getting information, but in oil and gas that isn't the case. “We get the information through distributor partners,” he said. “No. 1, it's not necessarily the most up-to-date information. The accuracy is not very good because we're depending on a channel partner to get the information.”
So when it started to become clear that the oil and gas markets it served began to fall, the purchases from distributors Eaton uses in such regions as Oklahoma, Texas and California were off substantially, according to Campbell.
Products impacted included higher pressure premium products for onshore and offshore applications; Synflex subsea oil and gas bundle hose lines; high pressure spiral hydraulic hoses, fittings and adaptors; braided hose for equipment used for fracking; and industrial hoses, also used in fracking.
“We've seen decreases in sales on those types of products across the board,” he said, “whether used in subsea oil and gas, exploration, or even onshore fracking.”
Despite the downturn, Eaton still sees oil and gas as being an important market to continue to support, Campbell said. Efforts will continue to gain needed certifications that are required for its products used in the sector.
Eaton also is investing in corrosion resistant products and carbon-steel lines that play a key role in some applications. He said Eaton introduced its Dura-Kote brand plating on hose fittings and adaptors in North America, with many of those products used in the oil and gas industry.
The company also has invested in adding inventory at its Van Wert, Ohio, facility for its Walterscheid-brand metric tube fittings that also are popular in oil and gas uses.
Of course, Eaton, like the others, doesn't know when that upturn eventually will come.
“For 2016, we are gearing up that maintenance orders (will grow) for oil platforms or onshore fracking equipment,” he said. “We are seeing a pickup in terms of those orders. But in terms of supporting new builds, they have just been non-existent.”
Chris Sweeney, Rubber & Plastics News staff, contributed to this report.