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Business Lines
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K-Tron's Business Lines K-Tron International, Inc. is a New Jersey corporation founded in 1964 and is a wholly owned subsidiary of Hillenbrand, Inc. K-Tron is engaged in one principal business segment, which is material handling equipment and systems, and our operations are conducted largely through subsidiary companies. We have manufacturing facilities in the United States, Switzerland and the People's Republic of China, and our equipment is sold and serviced throughout the world. We serve the bulk solids material handling markets through two separate business lines, which focus on feeding and pneumatic conveying equipment (our Process Group) and on size reduction equipment, conveying systems and screening equipment (our Size Reduction Group). Our material handling equipment is used in a wide variety of manufacturing and other industrial processes, particularly in the plastics, food, chemical, pharmaceutical, power generation, coal mining, pulp and paper and wood and forest products industries. We design, produce, market and service this equipment, and we sell it both on a stand-alone basis and as part of larger systems that we design and sell. Replacement parts are an important aspect of all of our businesses, and they comprise a significant majority of the sales of our Size Reduction Group. Process Group Our Process Group designs, produces, markets, sells and services both feeders and pneumatic conveying equipment, and it markets and sells this equipment under two main brands: K-Tron Feeders and K-Tron Premier. We also design, produce, market and sell a separate line of feeders and ancillary equipment for the domestic market in China under the brand name K-Tron Colormax. Our feeding equipment, which is sold under the K-Tron Feeders brand, controls the flow of materials into a manufacturing process by weight (known as gravimetric feeding) or by volume (known as volumetric feeding) and is used in many different industries, including the plastics compounding, food, chemical and pharmaceutical industries. This feeding equipment is sold throughout the world by 89 independent sales representatives with exclusive territories, by Company-owned sales companies in France, Germany, the United Kingdom and Singapore and directly from the factory in other locations which are not covered by either of these distribution channels. Our Process Group markets and sells both stand-alone feeders and engineered systems where one or more feeders are combined with other complementary material handling equipment. Our pneumatic conveying equipment, which is sold under the K-Tron Premier brand, addresses a broad range of pneumatic conveying applications that involve the handling of bulk solids. Our K-Tron Premier equipment and systems transport bulk solids from one point to another point with negative pressure (known as vacuum conveying) or with positive pressure (known as pressure conveying) and are used in many industries, including those served by the K-Tron Feeders brand. This pneumatic conveying equipment is sold primarily in North America, using the same distribution network of independent sales representatives that sell our K-Tron Feeders brand feeding equipment. We have also started to sell our K-Tron Premier products outside of North America through many of the channels used for our K-Tron Feeders brand. Process Equipment: K-Tron Feeders Brand Feeders. Our Process Group markets single and twin-screw feeders, belt feeders and vibratory feeders under the K-Tron Feeders brand. We offer these feeder types in a number of different designs, sizes and finishes to meet the requirements of a given material handling application and to assure compliance with applicable industry codes and specifications. In addition, these feeders are available in both a volumetric mode, where the flow of material is controlled by volume, and a gravimetric mode, where the flow of material is controlled either by weight or loss of weight over a defined time period. Gravimetric feeders, which represent the majority of our feeding equipment sales, are typically used in premium applications where short-term accuracy in the feeding of raw materials is essential to produce a high-quality end product. Our Process Group also offers a unique type of feeder, which we refer to as the BSP or Bulk Solids Pump. The BSP feeder does not utilize the usual screws, belts or vibratory trays to convey material but instead relies upon positive displacement action to accurately feed free-flowing materials, offering uniform discharge, consistent volume and gentle handling. In addition to feeders, we also produce mass flow meters which measure and control the flow of material from a storage vessel. Our flow meters have no moving parts and therefore require little maintenance, and they do not need to be calibrated to a specific mass flow range. All of our K-Tron Feeders brand equipment models have been developed by our own internal research and development group. Weight Sensors and Controls. The performance of gravimetric feeders depends to a great extent on the weighing and control systems being used. Our proprietary weight sensors, known as Smart Force Transducers, are based on a vibrating wire technology. These load cells have evolved over many years into today’s rugged and drift-free weighing systems. When combined with our proprietary control system, known as SmartConnex, they constitute what we believe to be one of the most accurate systems generally available for gravimetric feeding. Manufacturing. Our Process Group produces a number of feeder designs which are then adapted to meet a customer’s particular specifications. Customization generally is limited to combining standard mechanical and electrical modules to meet the process and regulatory requirements of the customer. Our primary manufacturing activities consist of the assembly and final testing of feeders and related equipment. We assemble a number of components used in our feeder products that are manufactured by others to our specifications. These outsourced components include sheet metal parts, feeder screws, castings, electric motors and electronic assemblies. We also manufacture the vibrating wire load cells that are used in our gravimetric feeders. Our K-Tron Feeders brand feeding equipment and systems are assembled and tested at our facilities in Pitman, New Jersey and Niederlenz, Switzerland. Competition. Based in part on independent market studies, we believe that our Process Group is the leading worldwide producer of feeders and related equipment for the handling of bulk solids in manufacturing processes, and we believe that we have reached this position primarily because of our use of digital control technology and digital weighing technology, our development of mechanical design improvements to our products and our extensive knowledge of material handling applications. We also rely on our global service network, our quality reputation and our many years of experience in serving the needs of our large customer base to maintain a competitive advantage. Strong competition exists in nearly every major geographic and industrial market that we serve. Competitors range in size from a significant, privately-held corporation with a broad line of products to smaller companies with a global presence and regional firms that often specialize in a limited range of products. Process Equipment: K-Tron Premier Brand Conveying Equipment. Our Process Group markets a full line of pneumatic conveying equipment, including components such as loaders, blower packages, diverter valves, rotary valves, in-line filters and other ancillary equipment. These products, which are marketed under the K-Tron Premier brand, are offered in a number of different designs, sizes and finishes to meet the requirements of a given material handling application and to assure compliance with applicable industry codes and specifications. Products are sold stand-alone to customers and resellers who then install them in one of their systems, or as part of customer and application-specific engineered systems that we design. Our pneumatic conveying systems convey material by positive pressure where the material is blown to a storage vessel, or by negative pressure where the material is transferred by vacuum to a storage vessel. Among the applications for engineered systems are railcar and truck unloading systems, where high volumes of bulk solids are typically moved by positive pressure from railcars or trucks to intermediate storage containers, and intermediate storage-to-production line transfer systems, where bulk solids are typically transported by vacuum at lower volumes. Our Process Group markets pneumatic conveying systems under the K-Tron Premier brand to a number of different markets and industries, including many of the ones that we serve with our feeding equipment. Manufacturing. Our pneumatic conveying equipment manufacturing activities consist of machining and welding raw materials and castings into machined parts, and assembling these parts together with components purchased from outside suppliers into loaders, rotary valves, diverter valves and other related equipment. We produce a number of standard pneumatic conveying and related products that are then adapted to meet a customer’s particular specifications. Customization generally is limited to combining standard mechanical and electrical modules to meet the process and regulatory requirements of the customer. Our pneumatic conveying equipment and systems are assembled and tested at our facilities in Salina, Kansas, Pitman, New Jersey and Niederlenz, Switzerland. Competition. Strong competition with respect to pneumatic conveying equipment exists in every major geographic and industrial market that we serve. Competitors range in size from larger companies with national or international markets and a broad line of products to smaller companies serving a regional market or specializing in a limited range of products or applications. Many of our competitors are privately held. We believe that we are one of the leading suppliers of pneumatic conveying equipment and systems to the plastics, chemical and food industries in the United States, and to the food and pharmaceutical industries in the United Kingdom. Process Equipment: Service and Parts Our Process Group has a global service network that enables us to respond to customer calls with respect to our K-Tron Feeders brand and K-Tron Premier brand feeding and pneumatic conveying equipment within 24 hours almost anywhere in the world. We also sell parts to our customers, and our service and parts business associated with our sales of this equipment is an important source of revenue for us. In addition to equipment, service and parts, we offer training to our customers, sales representatives and employees with respect to our K-Tron Feeders brand and K-Tron Premier brand feeding and pneumatic conveying equipment at our K-Tron Institute, which is based at our facilities in Pitman, New Jersey and Niederlenz, Switzerland, and through courses offered by the Institute in other locations, including at customer sites. Process Equipment: K-Tron Colormax Brand Our Process Group serves the domestic plastics compounding and injection molding markets in China through our Wuxi K-Tron Colormax Machinery Co., Ltd. (“Wuxi K-Tron Colormax”) subsidiary. Following the formation of that entity in 2007 and the purchase by it of certain assets from a privately-owned Chinese company, we created the brand name K-Tron Colormax to market a line of volumetric and gravimetric feeders, pelletizers, screen changers and other equipment specifically targeted at domestic Chinese compounding and injection molding manufacturers. In 2008, we added the pneumatic conveying product line from our discontinued Colormax Limited operations in the United Kingdom to the K-Tron Colormax product line in China. Most of the products sold under the K-Tron Colormax brand name are designed and manufactured at Wuxi K-Tron Colormax, which has a manufacturing facility in Wuxi, China. K-Tron Colormax brand products are marketed to end users and resellers in China by salespeople employed by Wuxi K-Tron Colormax, and the products, unlike our K-Tron Feeders brand products, are sold in Chinese currency. Feeders produced under our K-Tron Colormax brand, unlike those of our K-Tron Feeders brand, use third-party strain gauge load cells for weighing. They also use a lower-cost controller specifically developed by our Process Group’s research and development group for gravimetric feeding in the China domestic market. We believe that feeders produced using this more economical construction of weighing and control technologies meet the accuracy requirements of this market. To the extent that greater accuracy is required, we sell our K-Tron Feeders brand equipment in China through resellers, such as engineering firms that are based in Europe and the United States, and through independent sales representatives in China, none of whom represent the K-Tron Colormax brand. K-Tron Electronics K-Tron Electronics, which is part of our Process Group, designs, produces and tests electronic assemblies for use by us in our Pitman, New Jersey, Niederlenz, Switzerland and Wuxi, China manufacturing facilities and also to sell to third parties, generally focusing on small production runs for customers in New Jersey, eastern Pennsylvania and Delaware. Its facilities, which are located in Pitman, New Jersey, provide both automated surface mount and through-hole assembly capabilities, as well as testing equipment. The regional market for electronic assemblies is large, and K-Tron Electronics is one of many suppliers to this market. Size Reduction Group Our Size Reduction Group consists of our U.S.-based Pennsylvania Crusher Corporation (“Penn Crusher”), Gundlach Equipment Corporation (“Gundlach”) and Jeffrey Rader Corporation (Jeffrey Rader). During 2008, we integrated the U.S. operations of our Jeffrey Specialty Equipment Corporation and Rader Companies, Inc. subsidiaries at Jeffrey’s office and manufacturing facility in Woodruff, South Carolina. Rader was merged with and into Jeffrey on January 1, 2009, and Jeffrey changed its name to Jeffrey Rader Corporation in connection with the merger. Our Jeffrey and Rader brands of equipment are now marketed as Jeffrey Rader equipment. All of our Size Reduction Group companies design, manufacture, market and sell size reduction equipment, such as hammermills, wood hogs and double roll crushers. This equipment is used to resize various materials to a given smaller size, and the principal industries served are the power generation, coal and minerals mining, pulp and paper and wood and forest products industries. Jeffrey Rader also provides the pulp and paper and biomass energy generation industries with screening equipment, conveying systems and other products, and it sells a feeder/delumper used by petrochemical companies in the production of polyethylene and polypropylene. Penn Crusher Equipment. Penn Crusher manufactures size reduction and related equipment for the power generation industry to crush coal before it is used as fuel in the steam furnaces of coal-fired power plants, and it also serves other industries such as mining, quarrying and glass making. Penn Crusher sells its equipment worldwide through 43 independent sales representatives, with a primary focus on the United States. The crushers most commonly sold by Penn Crusher are hammermills, in which the material is broken by impact from hammers and then scrubbed against a screen for desired size. Penn Crusher manufactures a number of different hammermill designs, such as granulators, that use rows of ring hammers to crush with a slow, positive rolling action, and other crushers such as Bradford breakers, in which the material is crushed by gravity impact only. Penn Crusher also manufactures its MountaineerTM Sizer which is used for primary or secondary crushing of coal and other non-metallic materials in mining operations. Crushers come in a wide variety of sizes and configurations, and each machine is built-to-order to meet the customer’s specifications. Penn Crusher also manufactures and markets a positive displacement action feeder using the same licensed technology that is the basis of our Process Group’s Bulk Solids Pump. Penn Crusher owns the exclusive rights to utilize this technology in feeders of 24-inch diameter and larger in low-pressure applications for markets in the United States, Canada and Mexico. These feeders are used primarily to feed coal into pulverizers in coal-fired power plants, and they also feed limestone into raw mills in the cement industry. Gundlach Equipment. Gundlach manufactures size reduction equipment for the coal mining industry, and its equipment is also used to crush coal and other minerals in coal-fired power stations, salt processing plants, fertilizer manufacturing facilities and other industrial applications. Gundlach sells its equipment worldwide through 15 independent sales representatives, with a focus on the U.S. and South American markets. The crushers most commonly sold by Gundlach are double roll crushers, in which the material is broken by compression resulting in minimal fines. Gundlach manufactures a large variety of double roll single-stage and two-stage crushers, the latter including a pre-crusher. Crusher rolls are designed with varying surface configurations tailored to the material and sizing requirements of each specific application. Another product sold by Gundlach is the Cage Paktor cage mill, in which the material is crushed by impact between one cage and shear plates or two counter-rotating cages and shear plates. Gundlach’s crushers come in a wide variety of sizes and configurations, and each machine is built-to-order to the customer’s specifications. Gundlach also sells specialty crushers and other equipment such as the Accu-Grind, a small crusher designed for sampling applications, the Nanosiz-R which provides fine grinding for the mineral industry, and the Ro-Pro Separator which is used in coal washing applications to separate fine particles from coarse particles. Jeffrey Rader Equipment. Jeffrey Rader produces wood and bark hogs, chip sizers, screening equipment, pneumatic conveying and mechanical conveying systems, storage/reclaim systems and other size reduction equipment and related items for use primarily in the pulp and paper, wood and forest products and biomass energy generation industries. Wood and bark hogs are used in the pulp and paper and wood and forest products industries to produce mulch, boiler fuel, chips for composite wood products and compost. A chip sizer is marketed to the pulp and paper industry to resize chips too large for efficient use in a pulp digester. Screening equipment, pneumatic and mechanical conveying systems and storage/reclaim systems are used to classify and handle biomass, wood chips and waste wood products, such as tree bark, primarily in the pulp and paper and biomass energy generation industries. Jeffrey Rader also sells hammermills to the mining industry to resize chunks of coal, which come directly out of the mine, into smaller pieces as well as a line of electromechanical and electromagnetic vibratory feeders designed to feed bulk solid materials into processes primarily in the aggregates, coal, mineral, chemical and other industries. In addition, Jeffrey Rader manufactures a feeder/delumper used by manufacturers of polyethylene and polypropylene. In the United States, Jeffrey Rader sells its equipment through a direct sales group and through a combination of 19 independent sales representatives and distributors, depending on the type of equipment sold, the industry and application and the customer’s location. Internationally, Jeffrey Rader markets its equipment through wholly-owned subsidiaries in Canada and Sweden, in Japan through a licensee and in other countries through 14 independent sales representatives and distributors. Replacement Parts. A majority of our Size Reduction Group’s revenues is derived from the sale of replacement parts. Each company within our Size Reduction Group has a large installed base of long-lived equipment, and every machine and part sold, including specifications and drawings, is registered in a digital database to provide customers with fast and efficient support. Manufacturing. The manufacturing activities of our Size Reduction Group consist of machining and welding raw materials and castings into machined parts, and assembling these parts together with components purchased from outside suppliers into size reduction and other equipment. The equipment is then tested at one of our plants before being shipped to a customer’s site. Machine parts, such as frames, rotors and rolls, are built individually to order, with no parts stocked in inventory except in the case of Penn Crusher for some blanket purchase orders from customers for parts that will be used within an 18-month period. Certain higher volume parts, such as bearings, which are also marketed as replacement parts, are purchased in volume from outside suppliers. Competition. We believe that Penn Crusher is the leading U.S. producer of hammermills and related equipment for the size reduction of steam coal by electric utility companies, that Gundlach is one of the leading U.S. manufacturers of double roll crushers and related equipment for the U.S. coal mining industry and that Jeffrey Rader is a leading U.S. supplier of equipment for the resizing of wood chips, of screening equipment, conveying systems and storage/reclaim systems for pulp and paper mills in North America, and of truck dumping, conveying and other material handling equipment for the biomass energy generation industry in North America and Europe. Penn Crusher, Gundlach and Jeffrey Rader have reached these positions primarily because of superior machine design and quality and also because of their reputation and many years of experience in serving the needs of their customers. Competition exists in every major market that Penn Crusher, Gundlach and Jeffrey Rader serve. While some competitors are large companies, most are generally smaller companies with more limited product lines competing in specific geographic markets and applications. |