COLORADO SPRINGS, Colo.—For an industry that has been in relatively good health in recent times, participants in a panel discussing the fortunes and future of the hose sector all said that those involved in the business must be ready to embrace change.
While touching on a variety of topics, the four—representing a hose producer, couplings maker and two distributors—said what works today in business won't necessarily work in the future. They participated in the panel, “Critical Issues Facing the Hose Industry,” during the recent NAHAD annual convention in Colorado Springs.
Don Fritzinger, president of Singer Equities Inc., which operates more than 35 distribution locations under a variety of monikers, said if he looks back at his 36 years in the hose industry, the major markets now are completely different from 1980. Strong markets for industrial hose that have fallen on hard times in recent years include such mainstays as steel, coal and—most recently—the oil and gas sector.
But then there are applications such as food and beverage that remain strong, including new ones such as bottled water, a sector that he said largely was non-existent when he started in management years ago at Goodall Rubber.
“I've worked in distribution for my whole career and seen a lot of changes that have taken place over time,” Fritzinger said. “First there is a little concern on the part of those owning businesses or running departments. But change isn't that hard because we're already living it.”
Andreas Gerstenberger, executive vice president and global head of ContiTech A.G.'s global industrial fluid systems business unit, attended parent company Continental A.G.'s annual executive convention earlier this year. Conti was celebrating its most successful year in its more than 140-year history, yet the CEO chose as a theme that if the firm continues to operate in the future the way it does now—in what would be termed a prudent business model—then that likely would be detrimental to financial results five to 10 years in the future.
Conti as a company largely has been focused on automotive but has made moves in recent years to boost the percentage of its industrial business, including its purchase in 2015 of Veyance Technologies Inc.
“Although the economies are growing, if we continue to do just what we have done, I think in our business here we will have a tremendous challenge in the next five years,” Gerstenberger said.
One advantage the hose industry has is there will always be an inherent need to transfer fluids.
“We are all somehow part of this,” the ContiTech executive said. “Maybe fluids won't be so much oil in the future, but there will be gas, water and beverages. At ContiTech, we also traditionally were focused on those industries which were growing, which were oil and gas. Now all of a sudden we are being forced to wake up and say, "If we don't diversify very quickly, we have a problem.' “
Jeff Scheininger, president of Flexline, a single location distributor in New Jersey, said business owners have to look far out in the future—five to 10 years—to determine a proper course of action.
“The amount of change that we are seeing in technology, in work force capabilities, in staffing capabilities and in government regulations is such that we need to be proactive and change our organizations not based on what we will see in 12 months, but what we'll see in 60 to 72 months,” he said. “I think our industry has evolved. We've seen a ton of consolidation. We've also seen the rise of the customer as the central driver of our industries. To that extent, that's a huge change.”
As a small business operating in an industry that has its share of giants, Scheininger said Flexline has diversified by becoming a multi-channel market company. “I also think as independent entrepreneurs in business, we tend to bring a greater and more productive use to the assets that we deploy than necessarily the larger organizations,” he said.