Southeast Texas Industries

Degree of┬átrust┬áWith university degrees being almost compulsory within the modern corporate structure, itÔÇÖs interesting to see that businesses can still be hugely successful when guided by men of vision, if not holders of MBAs, as Alan T Swaby learns. ItÔÇÖs probably fair to say that when Richard Purkey established his metalworking business back in 1978, the last thing he expected was to see it develop into the substantial international business it has become today.┬á Back in the late 1970s, PurkeyÔÇÖs grassroots way of doing businessÔÇöfabricating whatever the local community wanted from an 8,000-square-foot metal shop and with just two employeesÔÇöcertainly kept him busy. His deals were sealed with a handshake and executed on trust. Today Southeast Texas Industries, as itÔÇÖs now known, has eight locations, 320,000 square feet of indoor fabrication space and 1,400 people on the payroll. But the ethos of doing business honorably remains as strong as ever.Surprisingly, for a self-made man and company founder, Purkey quickly began to groom his son-in-law to take over the business. Like Purkey, Paul Spence started his working career on the shop floor and, work-wise, hasnÔÇÖt strayed very far since. He became president in 1989 and immediately set about on a strategy of growth and diversification.Of course, the location in southeast Texas has been a big help. Alongside the ever-present oil and gas, thereÔÇÖs no shortage of other rich sources of revenue, from chemical and petrochemical plants, paper and pulp mills to power generation and steel mills, and just about everything else besides. But wherever the demand side is vibrant, there are plenty of suppliers, and STI is not short of strong competition.When asked about the secret of success, sales and marketing manager Matt Buchanan had no doubt that a strong Christian ethic was at its root. ÔÇ£Our beliefs are made evident through our actions but never pushed on our customers,ÔÇØ explains Buchanan, ÔÇ£but they guide the way we do business. Clients may not make the connection, but they recognize and respect our integrity through our day-to-day operations.ÔÇØBut while faith might give individuals the strength to cope with difficult moments, itÔÇÖs making consistently sound decisions that makes the business grow and prosper. This is where SpenceÔÇÖs guiding hand has been felt the most. ÔÇ£Paul has been astute enough to surround himself with very capable people,ÔÇØ says Buchanan, ÔÇ£who manage the business well. This has freed him up to take a more strategic view of whatÔÇÖs happening or, more likely, about to happen. This way he has grown the business by tapping into the needs of the market wherever and whatever they may be.ÔÇØAn early example of this is how the nature of the work at STI changed. Initially it tended to be light sheet metal work, but as the opportunities arose, pipe work, pressure vessels and heavy structures were added to the portfolio. From there, the establishment of a construction arm was a logical step. By capitalizing on its existing good reputation as a manufacturer, STI was able to offer customers a total turnkey service through the establishment of Southeast Texas Industrial Services in 2001. STI then was able not only to fabricate what the market needed but also to erect and commission plants before finally providing year-round maintenance services.In a similar way, Spence saw the value of creating an international division, which carried out its first project in 2004 in Iraq. Through the construction of a 500-megawatt power generation facility in Al-Mussiab, STIS International was able to prove itself as a viable player in the international arena. At the same time, the project enabled STI to satisfy its philanthropic ideals by improving the quality of life for ordinary Iraqi citizens, rebuilding the infrastructure and providing jobs to the local community. On the strength of this project, STI built invaluable contacts and opened the door to other potential projects not only in the Middle East but also in South America, Africa and the Caribbean.The boiler division is based out of Pasquagoula, Mississippi, and performs services all over the country constructing and repairing boilers, from replacing pipe and patching holes and cracks to complete overhauls and installations. It has been in business under STI since 2002 and has developed its own niche market targeting many of the same plants and industry that STIS targets, but on a different level.However, not all the innovations are on a grand scale. Two of the more successful are much more modest in size. SWAT (Specialty Welding and Turnarounds) is an emergency response service available 24/7/365 to provide precise and efficient repairs to many areas of the industry, including boilers, heaters and exchangers to name a few. STIÔÇÖs database contains some of the most skilled welders in the country. The company has a sophisticated system for monitoring the availability of these AA craftsmen and can send them to emergency situations anywhere in the country, saving clients millions of dollars in lost production time in the process.Then thereÔÇÖs Protrace, an invaluable service to plant managers suffering heat loss in the miles of piping that a typical plant has. Protrace tracks down the losses and provides remedial action in order to keep the thermal requirements of the plant in balance.These days, of course, itÔÇÖs unlikely that a manufacturing operation can remain successful without taking on board lean manufacturing concepts and principles. This is, of course, a long way distant from PurkeyÔÇÖs original way of working, but the benefits are now fully integrated into the STI psyche. ÔÇ£We often work with exotic materials,ÔÇØ says Buchanan, ÔÇ£and strict controls over quality and productivity are vital for both the client and ourselves. Over the years weÔÇÖve invested heavily in new lean machinery that not only works more efficiently but also minimizes waste of what can be extremely expensive raw materials.ÔÇØA discussion about a Texas company would not be complete without some reference to energy. Looking five years into the future, Buchanan sees nothing but increased activity in oil and gas. ÔÇ£AmericaÔÇÖs distaste for being dependent on imported oil means thereÔÇÖs plenty of exploration happening. WeÔÇÖve been long associated with Helmerich & Payne, whose revolutionary drilling rig design has made all other rigs obsolete. Total sales from this project alone have exceeded $600 million.ÔÇØH&P rigs are facilitating oil exploration in sensitive areas. Whereas once the risk of an oil spill was enough to have a project vetoed, the integral design and controls in the H&P approach virtually eliminate the chance of a drop of oil being lost.But in keeping with SpenceÔÇÖs vision of being ready to supply whatever the market needs, oil and gas is not alone in the energy mix. STI is already taking steps to find its niche in renewable energy and nuclear power. It seems that whichever way the wind blows, some part of STI will be there to take advantage.┬á