Story on Amerequip Corporation in the Appleton Post Crescent, May 19, 2013 (link to Post Crescent web article http://post.cr/18Zl0eQ).
Change can be good for an organization. Just ask the management team at Amerequip Corp.
A couple of years ago, executives said that if the maker of custom equipment for the lawn, landscape, agricultural and construction industries remained owned by its workers through an employee stock ownership program, the company either would have gone bankrupt or been sold.
That’s not the case today, said Mike VanderZanden, President and CEO at Amerequip, who said the company now is on a growth path with a goal of reaching $100 million in annual revenues and boosting its employment from 155 to 500 employees by 2020.
“We as a team began looking at the cost of being an ESOP company and determined that it was becoming a drain on the business,” VanderZanden said. “It just limited the amount of money we could invest back into the business.”
In February 2011, VanderZanden and about a dozen company executives purchased the business from the ESOP to keep the business locally owned.
“When it came down to it, we just have a strong commitment to our team members at Amerequip and they’re more like family now,” he said. “Our mission is to become a significant employer of choice, and what’s exciting for us now is we believe by doing the right things for our team members, we believe we will have nothing but strong profitability and financial success.”
Growth path
The company’s niche is working with some of the world’s largest power equipment manufacturers — John Deere, Caterpillar, New Holland and Case — and doing work for Oshkosh Corp.-owned McNeilus, which produces refuse trucks and cement mixers.
Amerequip is an original equipment manufacturer, which means what it produces is ready to be sold and put to use.
Where the company is focusing its strategy is doing more work for existing customers, VanderZanden said.
“When we talked about where we wanted to take the company, one way was to try and secure between 50 and 100 customers and do a variety of work for them, but we chose instead to work more closely with a few customers that are large global organizations and find ways to push deeper into each one,” he said. “The idea is providing great service to those customers, better than anyone else could do.”
Diversifying its production mix with its larger customers who make assorted equipment with varying uses, also can shield the business from downturns in the economy, VanderZanden said.
Much of what Amerequip does is in house, from painting, fabrication and assembly as well as designing and engineering products for its customers. The company recently invested about $3 million to expand and upgrade existing facilities.
“It’s what makes us unique,” VanderZanden said. “We have a lot of the capabilities of some larger OEMs but because the decision makers are on site, we can be faster on the turnaround.”
People contribute to the company’s success, VanderZanden said. It has partnered with Moraine Park Technical College to provide training to its employees, which allows them to keep their skills current.
“Continual education is a critical part of our success,” VanderZanden said. “Investing in our employees to ensure we remain on the cutting edge and relentlessly improving, is vital to our long-term strategies.”
Keeping up with economic trends and other factors that influence business operations including health care reform and the regulatory climate, is important to shaping the company’s direction.
VanderZanden said the company’s board is composed of executives from other business sectors, who provide insight on issues that could influence operations. The board also supports the model of strengthening ties and seeking opportunities with Amerequip’s major customers.
“We’ve taken the approach that as long as we focus on revenue growth and growing the business, we will be all right,” he said.
On the horizon
Tim Dorn, Vice President of Sales and Engineering at Amerequip, said building stronger ties with its pillar customers is a cornerstone of the company’s growth strategy.
“We are focusing on diversity, not only customer to customer, but within each customer,” he said.
Dorn said Amerequip’s major customers are experiencing modest but sustainable growth.
“As we look out in 2013, I think it’s going to hold tight,” he said. “We’re not expecting a major uptick because things still feel a little sensitive and people seem to want to hold off on things to see where things go, but we are working to diversify our markets to drive our own growth as best as we can.”
VanderZanden said Amerequip’s primary customers are expecting moderate growth during the next 12 to 18 months.
“Right now there is some softness as a result of the poor spring we had,” he said. “But as we look out 18 to 36 months, it’s definitely sustainable. No one is predicting double-digit growth but at least we can expect continued improvement.”