Only 14 years old, Andron Stainless Corporation has demonstrated remarkable resiliency in adapting to global-force changes in its market place. The key word for the South Carolina-based enterprise has been customization. But quality and customer service have been equally important factors, as Dan Harvey reports.
Andron Stainless Corporation provides a perfect example of a new-breed U.S. company that effectively adapted to an evolving business environment, where both domestic and international factors come into play. In this particular narrative, a small company grew a sharp set of teeth that allowed it to compete in a field of larger entities.
In a nutshell, the Columbia, S.C.-headquartered organization manufactures stainless steel tube fittings, valves and accessories for customers in the food and dairy, beverage, chemical and semiconductor industries. But that shorthand profile only tells half the story. The most significant element that best encapsulates the narrative is customization, a capability the company embraced to survive. Indeed, through customization, Andron Stainless Corporation has increased its bite.
Andron entered the game in 1993 as a diminutive-but-hungry dynamo, but not long after its marketplace entrance, the rules changed. “When we started, all of the manufacturers in our industry were primarily domestic producers and, as such, we were a highly competitive company,” indicates Andron Sales Manager Jim Necastro. “But that changed rather quickly. Our competition started importing, a development that made us less competitive.”
As Tancred LoPresti, Andron’s founder and president, succinctly states, it’s hard to compete with the Chinese. “It’s now a fact of life in our business: If you need a product in quantity and on a repeat basis, then it has to come from overseas.”
In response, Necastro points out, Andron shifted its focus from standard, commodity-type fittings provided in large quantities to custom fabrications (characterized by small but significant modifications) that could be provided in reduced quantities. “If someone needs specialized pieces, then it comes from a company such as Andron,” says LoPresti.
Further, LoPresti specifies the extent of his company’s re-engineered focus: “When I first started Andron, 80 percent of the business was made-to-inventory while 20 percent was custom. Now, 70 percent of the business is custom and 30 percent is made-to-inventory.”
LoPresti founded Andron Stainless Corporation on April 1, 1993. The company’s subsequent development clearly indicates that he was no one’s April fool, as Andron would become a leader as far as service, quality and customization for stainless steel fittings
The company arose from a three-individual partnership. “I formed the company with two Canadian partners,” recalls LoPresti. At one point, all three partners worked in the same company, but they forged separate but linking paths. “I went to work for a distributor, and, in 1988, the other partners started their own business in Canada [in Mississauga, Ontario],” LoPresti relates. “Through the distributor I worked with, I became one of their customers.”
Together, they realized that it was very hard to do business with the United States, especially for small orders. “Duties and customs made it prohibitive,” explains LoPresti.
As a result, the three men decided to establish an arm within the U.S. borders. “We really didn’t care where, but I liked the South and chose South Carolina as the place to start the business,” remembers LoPresti.
The two companies are separate entities but maintain a close business relationship. In establishing the U.S. business, LoPresti worked long daily hours and weekends. Moreover, he bucked one of the universe’s natural laws – that you can’t create something from nothing. “I grew the business out of nothing, as I had no customers,” LoPresti says. “Basically, I began the business through telemarketing, calling people on the phone and trying to establish new accounts.”
It proved to be a substantial individual role transformation. “I once worked for a distributor and with established accounts. But now I was a manufacturer who would sell to distributors, and I didn’t have a customer base,” explains LoPresti.
But he persevered and got the enterprise off of the ground. However, he had to work both ends of the business. “I worked the front office, making the phone calls to secure new business, and I went out back to help train people on how to do the necessary processes, such as the polishing. The welders could simply be hired. That was the easy part. But, as far as polishing, we had to do that from scratch.”
When Andron entered the market in 1993, the main competition was three large companies that essentially owned the bulk of the U.S. market and provided fittings, valves and pumps. “Thus, I went in with the intention of being a secondary source,” says LoPresti. “That is, we would only do fittings.”
In addition, at the time, Andron was a relatively low-overhead, low-price producer. “That’s really what got us in the door,” says LoPresti. “So, after six months, we provided companies with a good resource. We got the product out at lower prices.”
But market circumstances soon underwent a substantial shift. Around the turn of the new century, one of Andron’s larger competitors began importing from the Pacific Rim. Other large market players followed suit. “In fact, the three largest companies in our market have now shut down most of their U.S. operations, as they began importing from the Pacific Rim, too,” says LoPresti.
As a result, the customer base became more price-conscious and less quality conscious. (“Unfortunately, much of the quality became substandard,” interjects LoPresti.) But Andron never lost sight of the importance of quality. As such, the company went from being one of the lowest-priced producers to one of the highest. But within this change, LoPresti recognized the keys to differentiation. He would enhance the company’s value by offering optimal service and quality, along with its customization capabilities.
This hurt the company for a few years, but its commitment is starting to pay off. “We’re recouping and becoming successful, specifically because the large competitors shut down their manufacturing, which left a void that we chose to fill,” says LoPresti.
In recent years, the company has experienced a modest but respectable and steady average annual growth rate in the 10 percent range. Because of the growth, the company needed to relocate from its original 10,000-square-foot facility into a new 25,000-square-foot facility that boasts state-of-the-art capabilities. Located in South Carolina, the new Andron plant includes CNC milling and turning equipment and three welding stations. Polishing is accomplished manually by highly experienced and competent employees (in all, the company has 40 workers).
“We also have an engineering department wherein we plan all customization,” says LoPresti. “A customer can send us what’s essentially a stick drawing and, by the end of the day, we’ll provide them with a finished 2D or 3D approval drawing. The customer then can make any changes they deem necessary, but in five days or less, we’ll be able to provide them with a product based on the drawing.”
Currently, the company offers a complete line of fittings, valves, tubings and accessories – all of which it’s willing to customize. “We can manufacture custom parts to a customer’s exact specifications,” informs LoPresti. “If they’re looking for something we don’t have in stock, we can usually make it to order in less than a week.”
This is in keeping with Andron’s strong focus on customer service. “If you’d survey our customers, I’m sure they’d say that what they most like about us is the service and quality we offer, as well as the fact that we can get everything to them on time,” says LoPresti. “We like to brag that we can get the product out faster than the competition can provide a quote.”
Further, the company manufactures its products with the highest-quality raw materials. “We work primarily with stainless steel, but we use other metals such as hastelloy, titanium and aluminum,” says LoPresti.
Specific products the company provides include clamp fittings, sanitary weld fittings, industrial weld fittings, bevel seat, eyeline fittings, schedule 5 clamp fittings, tubing and hangars, valves and sight glasses, sanitary strainers, gaskets, and high viscosity pumps.
Eyeing the Future
Looking ahead, Andron is focusing on further product development in sanitary strainers and sanitary pumps by entering into joint ventures with other companies. “We’re really moving forward in that direction, although there’s no hard contract that states that we’ve entered into joint ventures,” explains LoPresti. “These represent growing markets, so we’re looking at new avenues and developing new configurations.”
Strainers and pumps are only two examples of new niches that Andron Stainless Corporation is exploring. The company is always looking at new ways it can provide a valued service that isn’t readily available. “We keep trying to do the difficult things that some of our competitors wouldn’t even consider,” says Necastro.
That’s why LoPresti considers his company a problem solver. With its excellent engineering and sales staff, it provides solutions that aren’t immediately apparent. In this way, it will be a formidable force and an adaptive presence in a business environment that always threatens to reinvent itself.