President, Global Pump Company/Mersino Dewatering
Many municipalities will continue to withhold projects as budgets remain a challenge. I do not think that it will be universal. There will be opportunities. Those who may be forced to put off repairs and upgrades unfortunately risk massive failures that ultimately create larger opportunities for companies positioned to respond to emergency scenarios on short notice. In the portable pumping industry, many markets are not in a state of stagnation, such as mining and energy production. The companies that will continue to thrive will be those that offer engineered solutions across multiple platforms—essentially rendering themselves corporately immune to peaks and valleys from market to market.
Portable pump company mergers are ultimately beneficial for more flexible, privately-held companies that can quickly control emergency items—such as fleet for rental or sale, parts inventory, etc.—without corporate red tape.
We feel confident that the pumps we have sold to municipalities are built for longevity, and we support the trend to rely on them with a deep and complete parts inventory. We have implemented manufacturing processes that have increased our throughput. We are expanding our inventory, including components for building up our diesel units and finished, ready-to-rent fleet inventory. We expect to have a record year in 2013. We have been fortunate that—despite economic challenges—we have continued to profitably grow our revenue. Our core remains consistent.
Frank J. Rebori
& Loveless Inc.
Our level of business for 2012 was positive. Our industrial and municipal markets gained a foothold on equipment sales related to both replacement projects and new construction. A positive, but still somewhat cautious, economic vibe helped during the second and third quarters of 2012. The election diverted the entire United States’ focus from growth as we became caught up in the political dialogue. The election, however, was a “red herring” in the sense that our real focus should have been on the impending “fiscal cliff.” It is encouraging that the President and Congress are now at least addressing it in the 11th hour, but real strategic solutions should have been finalized much earlier.
The macroeconomic outlook for the U.S. economy in 2013 will depend on two questions. First, “Will Washington enact a realistic solution to the tax and spending situation?” Second, “Will the marketplace become certain with regard to how taxes may affect their businesses in 2013 and beyond?” On a micro-level, the water and wastewater pumping industry will continue to benefit from replacement projects and geographic regional growth.
As is historically the case, growth for our industry will be driven by infrastructure needs in the municipal market for both new and refurbishment equipment. The industrial and international marketplaces have pockets of expansion that companies in our industry will strategically target.
Assuming a solution is reached in Washington, the best thing that will happen in 2013 is that some level of certainty will be achieved once legislation is enacted. This will allow the marketplace to adjust to the new level of tax and spending from which the U.S. economy can then begin to build.
Smith & Loveless will continue to expand our pumping coverage and bring new improvements and innovations to our products. We are preparing for 2013 and beyond by investing heavily in R&D and marketplace expansion.