“If you build it, they will come.”
That oft-quoted bit of pop-culture philosophy originated in a movie about baseball, but it sometimes applies to manufacturing business ventures that fulfill needs that conventional wisdom didn’t even know existed. Take GEA PHE Systems North America for instance. The enterprise realized that a supply chain that relied on European sources was not cost-efficient: Retrofitting an existing plant would have unacceptable limitations. So the company erected its own 268,000-square-foot plant – the only facility of its kind in North America – built for the express purpose of manufacturing plate heat exchangers that weigh as much as 37 tons and featuring its industry’s largest multi-cylinder press.
“Local sourcing of a highly engineered product, tailored to specific customer needs, makes us cost-competitive without compromising quality,” notes Lutz Wolf, president and chief executive officer of the North American subsidiary of the GEA Group, which is one of the largest global system providers of food and energy process solutions. “Like us, our competition has ties to a European parent manufacturer; but, unlike us, they rely on getting most of their parts from overseas. In addition to the time and costs related to overseas shipping, for the past three years the Euro has been constantly up and down, relative to the American dollar. By building a facility dedicated to manufacturing our plate heat exchangers in the United States [York, Pa.], we provide the highest quality product with stable pricing. This helps customers minimize their capital costs.”
German-based GEA Ecoflex had sold plate heat exchangers to the North American market for decades before opening its first U.S. sales office in Louisville, Ky. in 1998. In 2005, GEA acquired FlatPlate Inc. and WTT America, longstanding manufacturers of premier brazed plate heat exchangers. The purchases enabled the organization to establish a domestic manufacturing base. In the busy year of 2008, GEA combined all three companies and became GEA PHE Systems North America. Headquartered in York, and employing 130 people, it acquired ViEX, a Toronto, Canada-based manufacturer of fully welded plate heat exchangers.
The company now had the capability to make a complete range of gasketed, fully welded and brazed plate heat exchangers. The importance of this type of heat exchanger depends upon the application, but there’s a basic concept involved: The plates are stacked in such a way as to allow a liquid or gas to flow between every other plate. The plates then transfer the heat from that medium to the gas or liquid in the other plate gaps.
There was still one more step. To make a full range of plate heat exchangers, built domestically and with the flexibility to switch easily from one type to another, the company needed to either expand its facilities or build a new one. GEA PHE opted for the latter.
“In looking for a plant to make our unique heat exchangers, it would have been tough to modify any existing facility,” notes Jon Paulos, manager of business development and marketing services. “Our largest heat exchangers weigh 37 tons, and in the final quality test, we fill it with water, so that’s more like 40 tons when full.”
Further, the company needed unique things not easily found: a reinforced concrete floor that could support that weight and an overhead crane capable of lifting it, along with special ramping and doors tall enough to move a 37-ton heat exchanger out of the building. It made sense to make the capital investment to do it right the first time. And the decision is paying off. “We haven’t slowed down significantly,” says Paulos. “Even during the economic downturn, we’ve grown our product line with five new models, and we’ve landed some significant new projects.”
And then there’s the 25,000-ton press, which makes the heat exchanger plates. It took several months to assemble in place, and it weighs so much that it rests 10 feet below floor level, on 30 feet of reinforced concrete. The press is distinguished not just by the pressing force it can apply, but also by its unique capabilities. A multi-cylinder design, as opposed to one large cylinder common to other designs, provides for the flexibility to make heat exchanger plates in a variety of sizes, faster than any in the industry, while requiring only a single operator. In addition, Paulos notes, “We’re doing completely oil-free pressing. That’s particularly important for gasket plates. If there’s even a little bit of oil left on the plate, the heat exchanger could potentially leak. Our press not only produces a plate faster but, since there’s no need to manually clean it, there’s virtually no risk of a quality failure.”
GEA GOES AMERICAN
“Strategically, what we did was ‘Americanize’ an established international industrial design process and supply chain,” Wolf says. “First, we had to study the American market and make appropriate engineering adjustments, including something as simple as specifications stated in feet and inches instead of meters and millimeters. Then, while a small part of our portfolio, less than 10 percent, is still imported from Europe, we’ve made the commitment to not only build in America, but also to buy from American suppliers. That’s something a lot of our customers appreciate. Local sourcing and manufacturing close to our customers not only provides higher quality products and services, it also gives us a more robust and reliable supply chain to react to special customer requests.”
According to Wolf, that’s one reason why GEA PHE Systems can boast that it continues to grow, even though a lot of projects were put on hold during last year’s economic downturn. But there’s another reason: “We make a great product,” Wolf emphasizes. “Plate heat exchangers are generally less expensive, easier to maintain and repair, and require less space than any other type of heat exchanger on the market. We have the versatility to make any kind of plate heat exchanger – gasketed, fully welded or brazed – from the smallest to the largest size, providing the best solution to customer needs, and built to the most diligent engineering standards, resulting in optimum performance, simplified user maintenance and the best value.”
Heat exchangers are used in a variety of industries, including power, chemical, refrigeration, marine, renewable energy, food processing and HVAC.
“Essentially, we have two kinds of markets across different industries,” explains Wolf. “One is the original equipment manufacturer [OEM] market, where we’re basically providing a commodity. If OEMs want something standard, we can get that to them, usually by the next day. If special fittings or other customization are involved, then maybe it’ll take us a few weeks to deliver an OEM solution.”
The market is project based. “We might be talking about four to six months from initial design to delivery, depending upon the scope of the project. This usually involves large applications in power plants, where you need to cool large equipment; or it involves refineries, where you need to heat or cool a liquid or gas as part of the process.”
TAKING THE SHOW ON THE ROAD
Despite what Wolf touts as the many advantages of plate heat exchangers, especially those made by GEA PHE Systems, he concedes that there is still a need to reach out to customers to communicate the value. “It costs money for a company to send their staff out to tour our facility or a trade show to learn about our equipment. With the current economy, customers can afford to send only a few people,” he says. “As such, we’ve not only gotten closer to our customers by ‘Americanizing’ our manufacturing, but we’re also taking our demonstration shows directly to them. Last April, we launched a mobile product workshop, the first fully equipped, fully working traveling plate heat exchanger workshop in our industry.”
The mobile “trade show and training” workshop started out in Houston and made its way through the Gulf Coast, a region densely populated with refineries and petrochemical processing facilities. “So far, more than 700 key people have not only to witnessed a product demonstration but also viewed the inner workings,” enthuses Wolf, adding that customers’ maintenance people can open up a heat exchanger, just to see how easy it is.
Wolf relates the road-show advantage: “The people who work with our products – and not just a few selected employees sent to a trade show – gets to see what our products can do and literally get their hands on them.”
GEA PHE Systems realizes best of both worlds and then some. Describes Wolf: “We’re by no means a new player. In fact, we’re part of a leading global engineering enterprise that boasts a long history of innovation and accomplishment. Simultaneously, we’re a local business, and that assures customers that they’re receiving the highest quality at the best possible price. We’ve heavily invested in our new manufacturing plant, and that enables us to offer a full portfolio of plate heat exchanger technologies. Further, we can customize these technologies to suit specific client requirements.”
All of that, the company believes, provides GEA PHE with capabilities unparalleled in the American heat exchanger market.
Want proof? Ask any customer. Such validation, Wolf indicates, has helped the company grow faster than any competitor.
ABOUT THE COMPANY
Within the GEA Heat Exchangers segment of the international GEA Group, GEA PHE Systems is responsible for plate heat exchanger technology. The GEA Group is a strong group of companies, with production facilities in Germany, the United States, Canada and India. It manufactures gasketed, fully welded and brazed plate heat exchangers for just about every industrial application for worldwide distribution. GEA EcoServe – the service organization of GEA PHE Systems – has customer service centers in many countries, thus providing rapid and reliable maintenance and spare parts service.
In its heat exchangers segment, GEA provides the most extensive heat exchanger offerings within its industry. These include finned tube heat exchangers, single-tube heat exchangers, Heller indirect dry cooling systems, air-cooled condensers, wet cooling towers and HVAC systems. With a turnover of more than 1.5 billion Euro and more than 7,500 employees, it is the biggest segment of GEA Group.