Our Publisher, Wally Evans, and I attended the 19th Annual Gabelli Pump, Valve & Motor Symposium in New York this week. Top executives from many of the major players in our industry were there to reflect on 2008 and give us some insight into 2009.
In light of the current economic climate, we were expecting doom and gloom. But that's not what we heard.
For the most part, there was much optimism and strong strategies for proceeding into 2009, however cautiously.
As per usual at a conference like this, there were many buzzwords and key phrases that seemed thematic:
* Capitalizing on the aftermarket will be a key revenue driver for many companies.
* Many companies continue to see growth opportunities through acquisitions.
* Companies entering 2009 with a strong balance sheet seem the most confident to weather any further detrimental economic storm.
* Companies continue to look to capitalize on international growth (particularly within the BRIC nations – Brazil, Russia, India and China). James Foung, Gabelli's chief financial analyst for the pump, valve and motor industries, believes this will promote the greatest turnaround. “The growth rate has led to expanded income in these nations,” Foung says. “They will use more water, consume more energy and travel more – all of which will affect the pump, valve and motor industries.”
* Many companies are utilizing lean manufacturing tools and Six Sigma for speed, flexibility and efficiency – both in the front office and in the factories. (Look for a special feature on this topic in the May issue of Pumps & Systems.)
* Companies will look for ways to benefit from the Stimulus Package and hope to see monetary growth and benefits, but perhaps not significantly until 2010. This will apply particularly to those companies who play in the water and wastewater sectors.
I had the absolute pleasure and opportunity to sit next to Mario Gabelli during the conference. He told me that the pump, valve and motor industries are going through a “bottoming out” process and predicts, “The strong will get stronger.”
Look for more comments and insight from the conference in the April issue of Pumps & Systems. In the meantime, let me know what you think!