Monday 20 August 2012

Davis Controls Ltd. - Embracing Non-Core Technologies & Markets

We have described ourselves as a ‘Distributor of Process Controls and Industrial Instrumentation’, and this ‘Distribution’ model has always been at the center of how we go to market.  That’s not to say that we have always been single minded in our sales and marketing philosophy. Through the years, we have considered other business models in an effort to expand our core competencies, broaden our base and increase our footprint.  For reasons that made perfect sense to us at the time, we have tried to push the envelope by exploring new initiatives, including;

Embracing non-core technologies and markets:    We have always been conscious of the fact that each time we solve an industrial application problem with one of our high tech solutions, one consequence of solving the problem, unless it is an OEM solution, is that the application is no longer a sales opportunity.  We then have to find a new problem to solve for the next sale.  In the late 80’s we made the conscious decision to identify and add a premium line of industrial consumable products to our mix, where the product, in the course of doing its job, is consumed and needs to be replaced.  A solution that the better it works, the more new ones are required.  Such is the case, for example, with industrial lubricants and compressed air/gas filters.

At the same time that we were looking for an Industrial consumable to sell to our customer base, Lubrication Engineers Inc. in Fort Worth, Texas was looking for an Industrial Distribution partner to take responsibility for the sales and marketing activities of their technologically advanced lubricants in Canada.  LE is confident that “No other brand of petroleum lubricating oil whatsoever, regardless of price, will be found superior in condition to Lubrication Engineers products at the end of any given period of use”.

Given these and other synergies, we launched the partnership in 1990, but it wasn’t long before we realized that our Automation and Process specialists were not the right people to ask to sell high performance lubricants and that this task was better suited to Mechanical Engineers, who have a professional interest in moving parts and who understand friction, and Chemical Engineers, who can relate to molecular structure and chemical bonds and how these are affected by application conditions, such as temperature, moisture and others.

In 1993, Lubrication Engineers of Canada Ltd. was created as a separate corporate entity, with its own dedicated sales team of engineers and tribologists and is now a successful enterprise selling millions of dollars of the world's finest lubricants in Canada.  Lubrication Engineers combine the best paraffinic and synthetic base oils with proprietary additive technology to offer the highest possible level of performance. Designed to exceed the specifications and capabilities of ordinary commercial grade products, Lubrication Engineers problem-solving lubricants will increase user profitability by providing:

·         Longer equipment life: less capital expenditures

·         Extended service intervals: reduced lubricant consumption

·         Improved reliability: less unscheduled downtime

·         Reduced energy consumption: less friction losses

·         Environmental advantages: facilitate ISO 14000 implementation

Lubrication Engineers of Canada shares physical office and warehouse space with Davis Controls Ltd. as well as Accounting, Marketing and Warehousing services and IT & telephony infrastructure and support.

The second important exclusive Distribution appointment Davis Controls received for an Industrial Consumable product, at least for Eastern Canada, was from Parker Hannifin, for their Balston branded industrial filtration products.  Parker offers a wide range of Balston products for industrial applications including:  Compressed Air Filters, Sample Filters, Vacuum Pump Inlet and Exhaust Filters, High Efficiency Liquid Filters, Filters for Hospital Applications, Natural Gas Filters, 0.01 Membrane Filters, Steam and Sterile Air Filters for Food Industry, Nitrogen Gas Generation Systems and Compressed Air Dryers.

The addition of Balston filters to our product offering has not only opened many new doors for us (i.e. hospital steam applications – for sterile surgical packs), it has provided one more solution for us to present to existing customers (i.e. 99.99% sterile air for the Food Industry).

In hindsight, the decision to add high tech, industrial consumables to our product mix has proven to be a winning strategy.  In my next blog release, I will tell you about some of our other strategic ideas for growth, not all of which have turned out to be the unqualified success that Lubrication Engineers and Balston have been.