By Mike Boyer
The Cincinnati Enquirer
HARRISON - Gary Heeman sees a big future in air power.
Not aircraft, but air compressors and related items.
Heeman, president of Campbell Hausfeld Air Products, Harrison maker of air compressors and air-powered tools, wants to double the company's business in the next five years.
Campbell Hausfeld is owned by Cleveland-based Scott Fetzer Co., which is part of Warren Buffett's Berkshire Hathaway Inc. holding company and doesn't publicly report revenues and earnings.
Debbie Felts assembles a pedestal sump pump at Wayne's Water Systems in Harrison|
(Ernest Coleman photo)
| ZOOM |
But the company, which has operated here for 167 years, has annual revenues of about $350 million, so its growth plans would push it well above the half-billion-dollar mark.
Campbell began producing air compressors and air-powered tools in the 1940s. It is a leading supplier to the commercial, contractor and do-it-yourself segments of the roughly $1 billion annual pneumatic products market, which also includes industrial and municipal applications.
The company has one of the broadest product ranges in the market, including paint sprayers, power rollers, pressure washers and welders as well as compressors, air tool accessories, nailers, inflators and tire repair products.
It supplies products under the Campbell Hausfeld brand to Home Depot, Wal-Mart and Tractor Supply chains. And it also has an extensive private-label business. For example, it makes Home Depot's Husky brand compressors and several brands for the Grainger industrial supply house.
Room to grow
But Heeman sees plenty of room for growth.
"Maybe only 10 percent of single-family homeowners have air compressors. Over a period of five to 10 years, we'd like to double that penetration to 20 percent," said Heeman, who has had the dual role as president of Campbell Hausfeld Air Products and its sister company, Wayne Water Systems, manufacturer of sump and utility pumps, for the last year.
"To do that, we'll have to change our product mix, make the product more user-friendly and educate consumers on the variety of air product uses and how they can make their life easier."
The company's efforts have already gotten notice. At last year's National Hardware Show, Popular Mechanics magazine presented one of its "Editor's Choice" awards to the company's Vertizonal, a space-saving compressor that can be stored and operated in either the vertical or horizontal position.
"One of our biggest challenges is trying to convince people why they need air products," Heeman said.
The easiest entry point is tire inflators. Campbell Hausfeld has been selling tire inflators for about 12 years and thinks that it is the largest supplier in the world with more than 50 percent market share.
"Whether you live in a home or an apartment, you have need for air for inflation whether it's car tires, truck tires or bicycle tires," he said.
The company's product line stretches from commercial units to battery and foot-operated units selling for less than $10.
Strategy in place
Campbell Hausfeld, which employs about 600 in Harrison, has a three-pronged growth strategy:
Expanding penetration within its existing retail channels such as Home Depot and Wal-Mart.
Developing new retail channels to include other mass-market retailers such as grocery chains, drugstores and even department stores.
Developing new product categories that take air-powered products beyond the traditional market of contractors, commercial enterprises and dedicated do-it-yourselfer.
One example is Campbell Hausfeld's recent move into tire repair products and automotive accessories in general.
In the last year, the company has introduced 120 new accessories aimed at the tire-repair market, and that number will double in the next year-and-a half, Heeman said.
One item, for example, is a digital tire gauge introduced at a trade show in November.
The company hopes to capitalize on the increased attention on proper tire inflation for safety and fuel economy.
The move to new categories such as tire repair and auto accessories also reflects a fundamental shift in the company's approach.
"I think, in the past, we've been more product junkies," Heeman said.
"We've viewed ourselves as a company that makes air compressors and air tools."
But in developing the company's long-range growth plan a year ago, managers began to focus on customers - not the tools themselves.
As part of that cultural shift, the company literally cut the (power) cord and began looking at other products such as gas and battery powered tools.
"That was a big change," Hilarie Meyer, director of marketing, said.
Added Heeman: "Not tying ourselves to a piece of powered equipment opens up the type of product categories you get into and the type of distribution channels."
The move caused the company to shift its product development structure.
The company used to have product managers focused on specific sales channels. Now they are aligned on customer segments.
"For example, our air tools business has four product managers - one focused on the do-it-yourselfers, one on contractor applications, one on spray-painting applications and one focused on gift promotional applications," Heeman said.
On the Web
The company is also doing more consumer research and marketing and using its 4-year-old Web site, www.chpower.com, for consumer feedback.
"We get about 100,000 unique visitors a month to our Web site," said Meyer, many of them consumers looking for parts and accessories.
Campbell's new approach is reflected in the company's Harrison staffing.
The firm no longer does final assembly of compressors in Harrison, although the plant machines and assembles the compressor pumps.
The final assembly is done at the company's other manufacturing plant in Leitchfield, Ky.
In 1991, Scott Fetter moved a Wayne Water Pump assembly to Harrison hoping to capitalize on synergies with Campbell Hausfeld.
"We've added people in our office, product development and sales staffs. In our air-tool business here, we have 43 people in research, design and marketing that weren't here 10 years ago," Heeman said.
Campbell Hausfeld also has expanded through joint ventures. More than a decade ago, it teamed with Japanese company Anest Iwata called Powerex which produces "pure air" systems for hospitals, laboratories and other institutions.
The firm has established joint ventures to tap the Japanese and Chinese compressor markets.
Although Campbell Hausfeld traditionally hasn't made acquisitions, Heeman said the company is looking at buying products and companies to aid its growth plans.
"We're not going to do an acquisition just for the sake of it," he said. Rather, he said, Campbell was interested in well-run businesses with good brand names that will help fill out its product niches.
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