Springs pump maker fishing for overseas business

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A small Colorado Springs pump maker is determined to give the global manufacturing industry a run for its money.

After years of developing its signature water pump called Genesys, sales at Multi-Duti Manufacturing Inc. are on the way up — it sold more pumps in January than all of last year.

Now, the company, which had about $3 million in revenue in 2011, has caught the attention of the federal government with the award of a $380,000 grant to develop a pump for the emerging aquaculture industry.

In its 8,000-square-foot manufacturing warehouse, MDM will set out to prove that an American manufacturer can design and produce a high-quality product that industry needs and wants to buy.

“I think we are a laboratory that is actually showing that it works,” said Gene Ashe, MDM president.

It’s a global economy

Pumps are the second most sold mechanical device in the world, and Ashe’s family has been selling them for generations. But, in 1978, at age 25, Ashe struck out on his own with his own patented seal and started a manufacturing company.

In 1981, he bought a California company, Advance Pump Co., because he wanted the intellectual property, he said. The pump design was wonderful and Ashe had the idea of using stainless steel to make it. He got a rude awakening into the global marketplace.

“After we tooled up for that and were ready to go, imports came in at half of our cost,” Ashe said.

The company, which sells a variety of pumps, kept on with pump sales for use in the industrial chemical process market and then broke into the residential consumer market. People bought MDM’s pumps for their koi ponds.

“We got a really strong reputation by applying an industrial product into a residential application,” Ashe said. “We found that we were the most expensive product, but when you look at how much energy was saved by using our pump, sometimes it paid for itself in six months.”

All along, Ashe was wondering how he could use the design he bought back in the 80s and make a pump to compete with the cheaper ones made overseas.

“We decided, with what comes in from overseas, we could not compete,” he said. “But, if we made it out of a composite material we could. We went through 13 years of research and thinking and experimentation on how we could make a complex product that was once made in a foundry, but now how do we make it in composite material?”

It’s that exploration of technology and finding the right material that sets American manufacturers apart, said Dave Anderson, MDM principal. In his estimation, research and development is the key to the survival of the American manufacturer.

MDM exports 100 percent of its product out of Colorado Springs with about 30 percent exported overseas. It’s been a tough ride, Anderson said. MDMs products get a 20 percent Value Added Tax when they arrive in most other countries. Meanwhile, products overseas imported to the U.S. are sold at an artificially lower price, Anderson said.

The global competition forced MDM to get lean and pare down its inventory. But, it never stopped MDM from trying to build a pump that can outlast stainless steel, Anderson said.

And while the economy smacked the little company around in 2008 and it lost about 30 percent of its business, MDM managed its expenses, cut back on employee pay but never laid off employees, and continued to invest in research and development, Anderson said.

“We kept the (over)head down and we kept doing it,” Anderson said.

Genesys is born

A lot of manufacturers are quick to move production of product overseas because things are cheaper, Ashe said.

“But, they are not adding up all of the costs,” he said. “We understood there is not just the tooling cost, but there is the intellectual property, there is the idea of, is it going to work when you put it into the machine?”

Ashe spent twice the money on tooling Genesys in the U.S. then he would have overseas.

“The idea,” Ashe said, “is that American tool-makers could do it right the first time.”

Genesys, which is made from bulk molding compound, went to market two years ago for $3,000 a unit. Now the pump’s energy efficiency has piqued the interest of large fish farmers who need a pump that circulates and keeps pristine waters in their aqua farms. The U.S. Department of Agriculture has taken a keen interest in aqua farms as reports that wild fish will be all but extinct by 2050.

In 2009, MDM received a Small Business Innovation Research Grant from the U.S. Department of Agriculture to develop an axial flow pump technology for use in aqua farms. In September it won phase II of that grant to make a prototype. The grant reviewer called the pump design “work that may result in a significant advancement in the industry.”

Rebecca Webb, assistant professor at the University of Colorado, Colorado Springs mechanical and aerospace engineering department will oversee the analysis of the axial flow pump. She will use a computer physics program to test the product’s perimeters and study the pump’s flow characteristics.

“The beauty is that it allows us to do more tests, than you could experimentally, quickly and more cheaply,” she said.

The MDM and UCCS partnership puts two engineering students to work, Webb said.

“I think it’s a great way to collaborate . . . the benefits are huge,” she said.

Ashe calls his new axial pump design the Qsys. It’s based on the idea that the most efficient way to move water is through a propeller, like on a boat. The Qsys propeller pumps will be units that can connect to one another for more flow or more pressure depending on the size of the farm.

Ashe, who bankrolled the research and development of Genesys over a decade, said he has two years to test his design and build a prototype. He predicts that, once the product hits the market, sales could be about $10 million in the first year.

“The overall umbrella is, don’t let anybody tell you we can’t compete in manufacturing in this country,” Anderson said. “We have to do all the micro stuff right — lean, R&D, and product performance is critical.”