GSI aims to be 'local' supplier across the globe

by World Grain Staff
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ASSUMPTION, ILLINOIS, U.S. — Whether it’s in the middle of the U.S. or in Biatorbagy, Hungary, GSI Inc. wants to be the most local manufacturer for its customers. The grain handling company, based in Assumption, Illinois, U.S., is expanding its presence across the globe with acquisitions and new construction of manufacturing facilities.
 
“We want to be able to service our customers at a more local level. By having facilities locally, we are able to leverage global designs and knowledge. We use local components, which they prefer and service is much easier,” said Tom Welke, senior vice-president Global Grain and Protein. “We didn’t want to rely on being an export business. We want to be as local as we can. It is a benefit as projects become more complicated and more local support and help is needed by our customers.”
 
Before it became a global powerhouse, GSI was a small company operating out of a 5,000-square-foot garage with only three workers. Established by Craig Sloan in 1972, the company started as a manufacturer of a variety of corrugated steel storage bins. By 1988, it had grown to be one of the largest steel storage bin manufacturers in the world.
 
Currently, GSI provides equipment and services to more than 70 countries worldwide. In addition to steel grain bins, the company offers commercial storage bins, grain silos, grain dyers and a large variety of material handling systems including grain bin sweeps, grain spreaders, chain loop systems, bucket elevators, chain conveyors, enclosed belt conveyors, support towers and catwalks. Now with a footprint on four continents, GSI started its international expansion in 1998 with the establishment of an office in Shanghai, China, and a few years later expanded to Brazil. The company also has a new manufacturing facility in Hungary.
 
Acquisitions

AGCO, a worldwide manufacturer and distributor of agricultural equipment, acquired GSI in 2011. With the backing of AGCO, GSI has been able to expand its presence across the globe, Welke said, and will continue to do so. “This is only possible because we are a part of AGCO. They are a very global company,” he said. “We are investing aggressively for growth. It has been a tremendous benefit to be owned by someone in the agriculture business who already services many of our customers.”
 
Some of its acquisitions in the last several years have included Johnson System Inc. (JSI), a leading manufacturer of catwalks, towers and support structures based in Marshall, Michigan, U.S. The 2013 acquisition included the manufacturing operation and JSI employees. JSI also produces temporary storage systems, aeration systems, superstructures, decks, stair systems, grain ladders and numerous other agricultural products.
 
More recently, GSI acquired InterSystems Holdings Inc. in June 2014. The Omaha, Nebraska, U.S.-based company is a leading manufacturer of commercial material handling solutions. With the acquisition, GSI entered into the higher capacity material handling business, filling product gaps such as commercial grain distributors, truck probes and bulk weighers and also bringing quality people and a company with strong brand recognition into the business. “We now have a full product line, add that to our material handling expertise, the dealer network we have, the relationships with the contractors and engineering firms, and we are the strongest player in the market,” said Randy Stauffer, director of commercial sales, GSI NA. “InterSystems and GSI coming together as one family is a win-win; our customers win and we win as employees.”
 
InterSystems has a strong reputation in the commercial industry, particularly in its ability to customize products, said Derek Hemphill, global product manager, material handling, GSI. Another attractive feature was the company’s manufacturing facility in Omaha.
“It gave us an opportunity to expand our manufacturing further west to serve customers in the western half of the United States better,” he said. “The knowledgeable staff that they bring, the ability to really work with the customers, and design the project that fits with the customers’ needs was very attractive.”
 
Global perspective

As population and affluence grows in emerging markets, there is an increasing need for solutions that GSI can offer, said Welke. “We feel good that there is demand globally for products like ours, and the technical support that we can provide on how to improve productivity. We are going to continue to invest to be the most local manufacturer for our customers.”
 
In June 2014, GSI opened its third international manufacturing plant and its first in Europe in Biatorbagy, Hungary. The facility focuses on producing and distributing grain material handling equipment including bucket elevators and conveyors. Given its centralized location, the Hungary facility gives GSI the perfect site to serve customers in Europe, the Middle East and Africa with equipment tailored for local needs and shortened transport time. Hemphill said there is a strong desire from end users to be able to purchase everything from one place. Providing that for customers does require a significant amount of coordination, Welke said. One previous project had equipment coming from five factories in three different countries. “Our strategy is to provide as much of the system and equipment as we can,” he said. “We can ask a customer if they want a specific product out of China, Brazil or the U.S., and offer the pros and cons of each. We want to give them solutions to help maximize their ROI. Sometimes that might be with the more expensive, heavier duty product, while other times they prefer the lower spec equipment.”
 
Challenges and opportunities

In terms of the overall grain industry, Stauffer said there is a continuing push for larger capacity and faster receiving, as well as consolidation. “Customers are fighting for the same producers in the area, and are trying to make their customer experience better by increasing their speed for unloading,” he said. There is going to be a lot of grain to move in the next year and the outlook looks strong for the next three to four years. In North America, there continues to be logistical changes with build out in the Northwest, upgrades to the Panama Canal, and improvements on the Mississippi River. That means more business as grain companies try to build storage facilities in the proper place, Stauffer said.
 
“They will have more bushels that they are trying to handle faster,” Hemphill said. “They are rebuilding facilities, adding on, or in some cases, trying to build new facilities.”
 
Globally, the areas with the most demand for grain storage include Ukraine, Russia and Brazil in the short run, with future opportunities in India, China and Africa, Welke said. “They are all difficult places to do business in,” he said. “With the conflict in Russia and the Ukraine, we are getting a little bit of business, but not a lot of business.”
 
Due to the lack of liquidity and available capital, farmers are putting their working capital into inputs, meaning few of them are able to invest in more than just maintenance, Welke said. At some point, Africa and India will need to import more grain as population continues to grow.
 
But no matter the location of its next project, GSI stands behind it, Welke said. "I don’t care if the project is in Romania or Iowa, we are a lot better and more efficient when we have people locally,” he said. “We’ve been on this path aggressively for the last three years. We’re seeing a nice return on it, and we will keep getting better. Our customers will benefit and we’re excited about that opportunity.”



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