In 1926, Paulsen Spence developed a new kind of pressure regulator that not only changed steam industry standards but also formed the basis of an enormously successful business. Today, NewYork-based Spence Engineering Company carries on the visionary founder’s creative legacy. Further, the innovative organization is boosting sales by targeting niche and international markets, Dan Harvey reports.
In an era of automated control systems and process technologies, Spence Engineering Company, a leading manufacturer of steam and fluid control devices, specializes in self-contained regulators for pipe connection sizes that range from a half-inch to 12 inches and require no external power source.
As the Walden, N.Y.-based company points out, engineers and designers often overlook less complex and more cost-effective systems and deploy more expensive and complicated products that are installation and maintenance intensive. True, some HVAC and process applications work best with automated control options, such as those provided by pneumatic or electrically actuated control valves. But, in many situations, pilot-operated steam regulators, such as those that Spence provides, represent a viable low-cost, low-maintenance alternative.
With its broad and versatile product range, Spence Engineering can cover all bases. Offerings include pilot- and direct-operated pressure and temperature regulators; pneumatically and electrically actuated control valves; safety relief valves for steam, air and industrial gas service; condensate pumps; desuperheaters; noise suppression products; thermodynamic, mechanical and sanitary steam traps; fabricate and cast strainers; butterfly, check and triple duty valves, and suction diffusers.
Spence Engineering was established in 1926 by Paulsen Spence, during an era when pressure reducing valves, while offering acceptable performance, lacked accuracy and speed. Further, existing valves often seized up or required substantial maintenance. Those factors drove a demand for a more effective regulator. In response, Paulsen Spence, who began his career as a manufacturer’s representative selling pressure-reducing valves, designed the first closed, pilot-operated, diaphragm actuated regulator. This revolutionary pressure regulator (the Spence Type ED) changed the way energy producers supplied low-pressure steam to customers and provided the desired accuracy and pressure control. Subsequently, pilot-operated regulators became the steam industry standard as far as reducing pressure and exercising control. Today, this steam reduction and distribution method remains one of the most accurate methods of HVAC and process control.
“After inventing this pilot-operated regulator, Spence patented the technology, and everyone has copied it ever since,” informs Spence Engineering’s Vice President of Sales and Marketing Joseph Moran.
Eventually, Paulsen Spence patented more than 60 inventions including the Type ED packless main valve with external pressure pilot, Type T14 temperature sensing pilot, Types T124 and T134 combination pressure and temperature control pilots, Type Q back pressure pilot, Type N differential pressure pilot, Types P and Type F46 pump pressure pilots and various pneumatic pilots. As Moran indicates, the inventor’s pilot-operated pressure and temperature regulators provided the blueprints for many of the externally pilot-operated regulators manufactured throughout the world. Despite some changes to the materials and configurations, the overall design and operating principals of his inventions remain the same.
CENTURY OF CONTINUOUS GROWTH
After patenting his first design, Spence partnered with Leon Dexter, the owner and operator of the Rider-Ericsson Engine Company who agreed to share his Walden-based production facility. Throughout the late 1920s and mid 1930s, as Spence’s business steadily grew, he expanded his product line to include a full complement of pilot-operated and direct-acting regulators for pressure, temperature and backpressure control, as well as desuperheaters and strainers.
By 1939, Spence regulator sales surpassed Rider-Ericsson products and Paulsen Spence purchased Dexter’s plant and manufacturing equipment. By this time, Spence regulators were used extensively in manufacturing facilities throughout the United States. According to the company, by the early 1960s, Spence Engineering Company owned half of the market for pilot-operated steam regulators. In 1967, the company moved to its current 79,000-square-foot location in Walden.
In 1984, Spence Engineering was sold to Watts Industries, a well-established valve manufacturer that enjoyed a strong presence in the HVAC market. During the next 10 years, Spence sales rose from $6.7 million to $14 million. In recent years, the company solidified its position in the HVAC and industrial process markets by developing several innovative, cost-efficient products. These included the Type “J” Series Pneumatic Control Valve (1986) and the “Nova” NFT Series Variable Orifice Steam Traps (1992). The latter was the first U.S.-made free float stream trap. In 2001, the company introduced the CDH Series patented thermostatic sanitary steam trap and, in 2006, it began offering the “CoMBo” CME series, the industry’s first condensate measuring elbow thermostatic steam trap.
During these years, Spence was able to broaden its product line and improve its manufacturing capabilities through significant acquisitions and improvements. In 1989, the company acquired the Nicholson Steam Trap line of industrial and process steam traps. A year later, it took over the manufacture of safety relief valves from Watts Industries’ Canadian division. In 1998, Spence purchased the Ashcroft line of temperature regulators. The following year, the company underwent ownership change when CIRCOR International of Burlington, Mass. acquired Watts Industries’ HVAC, oil, gas and instrumentation divisions.
“We now manufacture and sell our steam specialty components under the Spence Engineering, Nicholson Steam Trap, Spence Strainers International and Rockwood Swendemen brand name
after CIRCOR purchased all of the companies and made them divisions of the corporation,” informs Moran, adding that Spence itself acquired the Rockwood Swendeman line of cryogenic safety relief valves in 2001.
TAKING TRADITION INTO THE NEW CENTURY
All of the changes have helped Spence Engineering continue its founder’s legacy of innovation. “We’ve recently developed a lot of sanitary steam traps and control valves for use in the biotech/pharmaceuticals industry,” reports Moran. “Also, we just came out with a state-of-the art condensate pump that has been a huge success.”
Spence Engineering developed this P3-Piston Power Pump series of non-electric condensate pumps in response to increasing energy costs. “It’s based on a spring-less dual-piston design that no one else has,” Moran points out.
With this unique design, the pumps condensate much more reliably, efficiently and cost-effectively than current spring-action, non-electric pumps and centrifugal pumps, enabling customers to realize the benefits of returning condensate. According to the company, previous designs used a spring-snap mechanism to shift valve positions, while the P3 accomplishes the shift with the dualpiston design that acts as a spool selector valve. Further, the spring-less design solved the biggest problem inherent in other designs: spring failure. There is no spring to break and only minimal pivot points. This reduces friction and wear, resulting in fewer problems with stalling or sticking. The P3 is designed specifically to remove condensate under all operating conditions, including remote locations, low pressure and vacuum systems, and high capacity process applications such as heat exchangers.
STREAMLINED FOR INCREASED GROWTH
Spence Engineering manufactures its products at its 79,000-square-foot Walden plant, which is ISO: 9001, ASME, PED and TUV certified. “We have about 127 employees, including a design engineering group that comes up with new ideas and designs that are changing industry standards,” says Moran.
In 2005, Spence Engineering incorporated Six Sigma lean manufacturing practices into its production processes. “Since then, we have become one of the industry leaders as far as lean activities,” says Moran. “Implementation has allowed us to achieve lower costs and generate a lot of extra space. These factors have greatly contributed to our new products and equipment. In general, lean has streamlined our business.”
Spence Engineering is supported by an enormous sales network with locations throughout the United States, Europe, Asia, the Middle East and in Central and South America. “We have one of the strongest representative/distributor networks in the U.S. and Latin America,” comments Moran.
Spence maintains a strong presence in the HVAC industry. Its regulators are used in heating systems, institutions, public utilities, district heating systems, process systems and major industrial plants. Products have been placed in high-profile locations such as the Sears Tower, Time-Warner Center and Rockefeller Center and are used by major corporations such as Ford Motor Company, General Motors and DuPont. “We’re also very strong in the Latin American market and we’ve experienced substantial growth in China and Southeast Asia,” adds Moran.
In addition, in response to the recent economic situation, the company is expanding its coverage. “We’ve been spending a lot of our time and resources on the niche markets, such as the biotech/pharmaceuticals industry, which is a strong high-margin business, and we’re targeting the international marketplace, to establish the same kind of reputation that we enjoy in the United States,” says Moran.
Moreover, Spence Engineering intends to keep coming out with innovative products that are far more technologically advanced than competitors’ offerings. “Niche markets, international activity and new products are the three elements that have increased our sales,” says Moran, adding that in the past two years sales increased $2 million each year. “By the end of last year, we were at $33 million.”
But it’s the company’s high quality products that truly set it apart. Spence Engineering’s remarkable ability to envision and then create innovative products in a mature industry not only places it far out in front of the competition but also serves as a testament to its creative founder.