April 2007- In Indian society, exchanging business cards is synonymous to exchanging a handshake. Whether in formal or informal settings, they're passed out as often as verbal greetings. During a day's time, 20 or 30 cards could be dispersed.
This cultural phenomenon may seem trivial to some, but to those planning on outsourcing goods or services from India, it's just one of many customs that must be thoroughly researched before conducting business in the country. And stocking up on business cards is just a minor detail. Establishing contacts, setting appointments and negotiating contracts are all handled a bit differently than in the United States.
Instead of spending the time and effort to devise what time of day might be best to schedule a meeting or even figuring out whether to use the right or left hand when passing out those business cards, there is another option. Bull Moose Tube Co., St. Louis, can bypass the legwork and go straight to the source.
Bull Moose Tube, a producer and marketer of hollow structural sections (HSS) and ERW mechanical tube and pipe, was established in the 1960s and expanded from its original Gerald, Mo., facility into what is now a 500-employee, seven-facility operation. It produces 1/2-inch up to 12-inch with 5/8-inch wall ERW tube and markets up to 16-inch square tube. The combined square footage of its multiple locations, where the tube is produced and warehoused, totals nearly 1.5 million.
The blue divide
In 1988, Caparo, a London-headquartered group comprised of metal and metal-related companies, acquired Bull Moose Tube in order to extend its tube making operations into the United States. Caparo's presence in India serves as a conduit for Bull Moose Tube customers to connect with Indian-made parts. Caparo India will be operating on 16 sites by the end of 2007, with plans for 31 plants in operation by the end of 2008 with capacity in stamping, fasteners, forgings, aluminum castings, tubing and toolings. So it's no surprise that a fair number of the company's contacts would take advantage of the relationship.
"Bull Moose Tube's domestic capabilities and market position, coupled with the international reach and capabilities of Caparo, especially in India, provide a rather unique and exciting opportunity," says Mike Dustman, vice president of business development at Bull Moose Tube. "Caparo is involved in many facets of the steel industry in India, and it gives us a fairly wide breadth of products to complement our customers. Be it tubing or stamping or forging or fasteners, we think that there's an opportunity for companies in North America to do business with a company that they're familiar with."
Sourcing materials and parts from the other side of the planet isn't an option for many companies. But often, taking advantage of foreign prices can offer a leg up in a highly competitive marketplace. "There are cost benefits on certain Indian products," says Dustman. "If a product requires a higher level of labor content or if it has a higher level of engineering or complexity, it lends itself to India because of the labor cost structure and depth of engineering resources." Caparo India will have a dedicated R&D facility employing more than 100 engineers.
Working with Bull Moose Tube isn't just for companies that aren't ready to outsource their own material. It's ideal for anyone focused on shortening the supply chain. Currently, however, those who have benefited from the sourcing program are a small but growing bunch. "It's been more of a customer, one-on-one type of service; it's a fairly unique level of service," Dustman notes. "There has to be the right fit at this point in time. As we get bigger, as we do more and more things, eventually we'll open it up to more companies. We have discussions with small companies all the way up to Fortune 10 and Fortune 20 companies.
"The ease of doing business with a local company like Bull Moose Tube stretches all the way to India," Dustman explains. "For us to be able to add the Caparo/India piece to the equation and still be involved with the domestic side helps us, as well as our customers. There's not a third party involved, so you're dealing with one company both in the United States and India."
In addition to aiding others in participating in the international market, Caparo, with Bull Moose Tube, has its own plans for expansion. Acquisition and business opportunities in Mexico, Brazil, India, Eastern Europe and China are in the process and on the horizon. While the company has made a name for itself in the United States and Canada, Dustman laughs at his attempts to explain just what a Bull Moose is during visits to Brazil and China. Luckily, it's quite difficult for quality products and service to be lost in translation.
The company's ability to cross the pond, so to speak, certainly doesn't distract Bull Moose Tube from its local functions. Those priorities stretch from California all the way to the East Coast. And with the recent introduction of a new facility in Arizona, virtually every U.S. region is covered. When discussing expansions and growth, Dustman says that the old saying, "The Moose is on the Loose," will, without a doubt, always be an appropriate description of company activity.
"That saying applies more so today than ever," he explains. "In the past two years we've started up our Casa Grande, Ariz., operation, expanded our Trenton, Ga., facility, added a third shift to our Elkhart, Ind., facility--the first in the history of its operation--and expanded that facility and the Casa Grande facility. We've added a state-of-the-art Bewo cutting operation to our Burlington facility and are in the process of adding cutting operations to our Chicago, Masory and Casa Grande facilities, as well as enhancing our tube processing capabilities in Elkhart."
The substantial gains made have been the direct result of staying tuned in to marketplace needs, as well as to customer commentary. Removing costs from the supply chain is achieved by establishing a presence in new areas. Prior to construction of the Casa Grande facility, it was difficult to service West Coast customers in a timely fashion. But expanding production operations beyond the Mississippi was more than just an obvious solution; it was imperative. "Long-term, we knew we had to have a facility in the West," says Dustman.
Going beyond geography
The location--or multiple locations--of a company and the countries it has access to are key components of a healthy, internationally competitive business. These days, however, value-added services are just as important. Typically, a mill is known for supplying its customers with raw material, but Bull Moose Tube is anything but typical.
"With what we're doing in our facilities, be it cutting or some level of fabrication, it's not the case where we're trying to take the business away from other customers of ours, be it distributors, service centers or fabricators, it's just the case that the customers are saying, 'We need to do that direct. We need to reduce our cost structure in order for us [the customer] to compete.' The way to cut out the cost structure is to have fewer stops along the supply chain," says Dustman.
As customers continue to require a single source for their value-added services, adding cut-to-length capabilities to its seven facilities is an essential endeavor. But that offering is just one of many. Customers call for more than just a long length of tube or pipe. Therefore, shaping, end finishing and punching holes or adding parts to the tube are all being integrated into the company's operations.
"We compete by providing cost-effective value to our customers with an entrepreneur mindset," says Dustman. "We work in terms of a well-thought-out, long-term game plan, but we aren't afraid to seize a short-term opportunity. We've invested heavily in systems that have allowed us to be smarter in our decisions, act quicker and eliminate a lot of unproductive time." Bull Moose Tube operates its multiple production facilities, valued at more than $40 million, with only seven salaried people on-site.
The pressure to compete domestically, as well as globally, increases as new companies and products hit the market. More and more ingenuity is needed to stay afloat, and Bull Moose Tube is making strides to achieve success for itself and its customers. "Building upon the growing global depth of the Caparo resources, we see Bull Moose Tube further developing value-added services and sourcing opportunities for its current and new customers to a level that only a global company can provide," says Dustman. MM
THE MOTHER OF INVENTION
Caparo, London, Bull Moose Tube's parent organization, began as a producer of tube and pipe in 1968 and throughout the years has acquired and organically developed a series of companies devoted to steel, automotive and general engineering products, as well as various businesses ranging from materials testing services, hotels, film distribution and private equity investment. Founded by Indian-born Lord Swraj Paul, it is the largest single-family-owned business in the United Kingdom with approximately 6,000 employees across the globe. The group's worldwide presence includes the Indian-based entities of: Caparo Maruti Ltd. and Caparo Engineering Indian Private Ltd. With interests ranging from metal forming such as stamping, fasteners, tailor-welded blanks, tubes and forgings to an aluminum foundry to a research and development center, its Indian operations meet the material and engineering needs of major automotive manufacturers, such as Tata Motors, GM and Honda.
Caparo showcased its design, development and manufacturing capabilities with the Caparo T1, a high-performance Formula One road car, which they plan for greater than 80 percent Caparo manufactured content. Extensive utilization of advanced composite materials through Caparo Vehicle Technologies results in the state-of-the-art Caparo T1 weighing in at only 1,100 pounds. From zero to 100 and back to zero in only 8.5 seconds, the 2.4-liter V8 is the first car in the world able to exceed 1,000 brake horsepower per metric ton.
By Abbe Miller, from the April 2007 issue of Modern Metals.