Opportunity with a capital 'O': Norres North America getting back on track

SAN DIEGO, Calif.—From the outside, the Norres North America unit of Germany-based Norres Baggerman Group probably looked like it was firing on all cylinders in 2022.

The South Bend, Ind.-based producer and supplier of polyurethane hose, ducting and high-temperature exhaust hose moved into a brand new 53,000-sq.-ft. factory that more than doubled the size of the nearby 20,000-sq.-ft. plant it replaced.

It moved into the new factory only eight years after being established as the Norres U.S. subsidiary. Its German parent was founded in 1889 and, besides urethanes, had a reputation for manufacturing high-quality hose lines from other materials, including silicone, thermoplastic elastomers, PVC, polyethylene and EVA.

Additionally, Norres North America had access to products brought into the company when Norres in 2021 acquired the Dutch Baggerman Group and its range of rubber and thermoplastic specialty hoses, as well as couplings and other accessories.

But things at Norres North America weren't necessarily as good as it may have seemed, according to Cullen Sharp, who came on staff as vice president of operations in August 2022, just a few months after the new South Bend factory became operational.

When he started, the subsidiary had just eight to 10 people on staff. That number at one point dropped to just five, before growing back to the current level of 18. As Sharp built the roster back up, he and the mostly new team have worked to rebuild the fortunes—and reputation—of the hose producer.

Sharp had no background in the hose industry. His previous experience was in the laundry industry, and he's been learning about hoses for the past two years.

And he's quick to admit that it wasn't hoses that drew him to the challenge, but rather the Norres organization as a whole and the opportunity he saw.

"Opportunity" definitely is Sharp's favorite word, as he used it numerous times while enthusiastically discussing the activities of the Norres North America business.

"Norres is a young company here in the United States. This is an opportunity for me to jump into something with which I can grow," he told Rubber News during the NAHAD Annual Convention, held April 27-30 in San Diego.

"It gave me a lot of opportunities. I'm a fairly high energy person, so there was a lot of progress going on inside of it. A lot of things that are changing and need to be changed, and already have changed. It was an opportunity for me to get on the ground floor of an opportunity that has a lot of growth potential within it."

What he found when he joined Norres was a wide range of areas in need of improvement.

"We weren't the sales organization that we needed to be," Sharp said. "We kind of had issues all throughout, and really it was an opportunity for me to bring a team together that would drive it in new directions."

That includes Brian Cook and Bob Besse, who both joined in February as operations manager and vice president of sales and marketing, respectively. And in March, Norres alum Kyle Norris returned after two years as business development manager.

"The company runs a little more efficiently today. We're a little more sales focused than we were before," Sharp said. "We're working on improving our customer service, which is a big part of what we're doing, and allows us to grow into the market even further.

"Prior to bringing those guys on board we were limited by our leadership."

Sharp is equally enthusiastic about the "opportunity" he sees with the June 2023 sale of the Norres Baggerman Group by investment giant Triton Partners to middle market investment firm Nalka DACH Investments S.A. SICAF-RAIF, which has offices in Germany and Sweden.

"They've kind of injected new energy into the acquisition," Sharp said of Nalka DACH Investments. "They've been an active PE (owner) from the beginning. They invested in (Norres), especially in the North American market, where they see a ton of growth potential for our organization. And we're going after that both organically and through acquisition."

North America is getting that focus because of the untapped potential there for Norres.

"It's one of the largest hose industries in the world, and we haven't really done a great job in the past of targeting those sectors and making sure that we're in it," Sharp said. "We're a player in this market but we're certainly not a big one. And there's a lot of opportunities for us to grow here. And they're prepared to make the investments to get there, which is a big piece for us."

The Norres North America executive said the new owners are very active investors that typically hold onto their acquisitions longer than the normal PE cycle. That is another reason for the upfront investments that are designed to get the business moving in the right direction.

Sharp also is excited to work with new Norres Baggerman interim CEO Albert Cordewener, who has big expectations for growth of the company brand in North America.

And the size of those expectations?

"We are looking to double the size of the organization here in North America in the next three years," said Sharp, without disclosing current revenues. "And really, from there, additionally doubling the organization after those three years, and their No. 1 question is how fast can we do it? They're prepared to invest and make that the path forward."

That path also will include an investment in people along with the capital going into the factory, which touts four hose production lines. With the work force at 18, Sharp expects that to reach 20-25 by the end of July.

"We have a really high quality product," Sharp said. "We needed a better culture as an organization, and first and foremost, what I was hired to do was bring out the culture and bring in the right people who will help grow this brand.

Norris, who previously had worked three and a half years for Norres, stayed in the hose industry during his absence, working for a plastics hose firm in North Carolina. He returned because he was excited about the changes Sharp was putting in place.

"I'm competitive like him, so I was looking forward to the opportunity to be a disrupter in the U.S. hose market," Norris told Rubber News at NAHAD. "And I truly believe that we're positioned to do that now, whereas before not so much."

The quality of the products Norres manufactures also was key in luring Norris back.

"While there are similar products in material out there, our product does rise above," he said. "For people who are really passionate about the hose industry—or really want the best product—ours really stands above.

"Coming back, I knew with the product and the changes that we could leave a good, strong mark."

In his role, Norris will concentrate on outside sales, and be the person who is face-to-face with the customer on-site, in meetings, at trade shows and doing product training with their sales people.

On the contrary, Besse brings no hose experience. He does bring decades of experience in industrial sales and marketing. He also has worked in industries that have gone through consolidations, as the hydraulic and industrial hose market is in the midst of, particularly on the distribution level.

"You're seeing generational businesses being sold, consolidation happening, people buying up the distribution channels," Besse said. "I've been in other industries that have gone through that. I had that experience selling into and marketing into this. I found that exciting. I really enjoy the relationships that come along with it. Relationships with distributors, with OE partners. Whoever it might be. So that is intriguing to me."

The challenge that Norres presented, Besse said, was how do they grow the company. The German parent has a lot of product and experience, and the North American business needed to determine "from what we could do to what we should do in the North American market."

He said he is fascinated by the hose industry and its niches and interesting applications. "It's one of those products that you don't know it's there until you get involved, and suddenly I'm seeing hose everywhere," Besse said.

During his first week on the job, he decided Norres had to sign back up to exhibit at the NAHAD convention, so the team could meet potential customers up close and personal.

"I have been pleasantly surprised by the folks we've been interacting with, by the conversations that we've had, and walking away with the opportunities that we're going to have out of this," Besse said at NAHAD. "They were very curious about where our company was going, the product lines that we've had and the changes there have been."

The Norres officials said they owned their shortcomings, and sent the message that they were determined to improve on those going forward.

"We recognize where we were," Sharp said, "and we weren't the organization that we should have been. We didn't treat our customers the way that we should have."

The feedback from NAHAD distributors, he believes, is that they are willing to give Norres another try.

"I think it speaks to our product. If it wasn't a great product, it would be difficult in this industry for us to gain it back," the VP of operations said. "The one thing that Norres has always stood on regardless with what was going on in the organization itself, is we have a really high quality polyurethane product. And that shows in the market. We see it everyday."

And Sharp, of course, sees that as a "great opportunity for us."