By Margaret Jackson | Jan 02, 2023
Contract manufacturing services
Acquisitions -- whether they're companies or equipment -- are the key to Denver Machine Shop's continued success.
The 106-year-old company, now run by twin brothers Eric and Scott White, has been passed down through the generations, starting with their great-grandfather, Fred, who bought out his partners in 1916 and named it Denver Machine Shop. The company made spare parts for the agricultural, mining, steel and railroad industries
Today, Denver Machine shop specializes in rebuilding and repairing equipment -- much of it at least 50 years old -- for the mining, power generation, oil and gas, construction and manufacturing industries.
While the mix of industries has changed, the services performed by the company has largely remained the same.
The bulk of Denver Machine Shop's business -- roughly 70 percent -- is manufacturing spare parts that are no longer available from original equipment manufacturers or that aren't available in the time frame the businesses need them. Repairing machinery that's been damaged through wear over time accounts for about half of that.
The key to Denver Machine Shop's recent success is adding to its capabilities every year. The company acquired Commerce City-based Kendo, Inc. in 2016, which gave it the ability to build stainless steel vessels and break into doing custom work for craft breweries such as Avery, Great Divide and Breckenridge. It has repaired bottling and canning lines and grain hoppers and manufactured everything from spare parts to tap handles.
"The craft brewing industry is not a huge industry for us," Eric says. "We do a fair amount of projects, but it only accounts for about 1 percent of our revenue."
At the start of 2022, Denver Machine Shop acquired Integrity Burning, which focuses on cutting 9- to 10-inch-thick shapes out of steel plate. The business, located in Commerce City, supports machine and fabrication shops with CNC flame cutting.
In terms of equipment, Denver Machine Shop has purchased a 1,000-ton brake press that can bend a 24-foot piece of 1-inch steel to a 45-degree angle.
For most of its first 100 years, Denver Machine Shop was located in 6,500 square feet at 14th and Blake streets in Lower Downtown Denver. But the company was pushed out when LoDo started booming. The company moved to a 7,500-square-foot shop at 32nd and Denargo streets in what is now known as RiNo and another boom followed, leading the company 15 miles northeast to its current 30,000-square-foot facility with 30-foot ceilings.
Today, Denver Machine Shop has three facilities -- one in Henderson and the two in Commerce City it gained through the acquisitions of Kendo and Integrity Burning.
Challenges: Finding and keeping employees is the biggest challenge Scott sees for the company, which is developing an apprenticeship program in conjunction with the Rocky Mountain Tooling and Machine Association (RMTMA) to train employees to become machinists
"There are lots of opportunities for people who are interested in the field," Scott says. "We're having to recruit people from out of state. That sometimes works and sometimes doesn't because the Denver area is so expensive to live in."
Many of Denver Machine Shop's customers would give it more business, but the company doesn't have the capacity to handle it. "We're limited by our capacity, which is limited by the number of people we have," Scott says.
Opportunities: As more businesses come to understand what Denver Machine Shop can do for them, opportunities arise. "Once they understand what kind of equipment and capabilities we have, we have tremendous growth opportunities," Scott says. "We've just hit the tip of the iceberg that we could work on."
Needs: The company is establishing key performance indicators that will enable it to better understand its business. "We're working hard to create a manufacturing environment where we have measurables in place," Scott says.
It's also important for Denver Machine Shop to continue modernizing its facilities and investing in new equipment, Eric adds.