By Eric Peterson | Jan 10, 2021
Pumps and compressors
With a 115-year legacy in industrial manufacturing, Sundyne has a long and circuitous history.
The Illinois-based Sundstrand Machine Tool Company expanded to Colorado in the 1950s with a focus on developing technology for military aircraft.
"The genesis of this business goes back to the aerospace industry," says Sefcik, who joined the company in 2017. "In 1956, Sundstrand Aerospace developed a pretty sophisticated, lightweight high-pressure water injection pump for the Boeing 707. It was used to boost the power during takeoff, especially at high-altitude airports. Those aerospace engineers recognized there would be an opportunity for that new technology in other markets."
The oil and gas industry emerged as a primary vertical, leading to the launch of Sundstrand Fluid Handling in Denver in 1970. The company moved to its current location in Arvada in 1977.
Rebranded as Sundyne after United Technologies acquired Sundstrand in 1999, the business was sold to The Carlyle Group and BC Partners in 2012, then to Warburg Pincus in January 2020.
There's a reason private equity has been attracted to Sundyne. "We're pretty unique in that we do both pumps and compressors," says Sefcik. "Typically, those technologies are much different. Because of our special technology and genesis with pumps, we've been able to adapt similar technology to compressors."
He continues, "We've grown both organically and by acquisition, and we have assembled some great brand names," says Seficik, offering the rundown: Sundyne, ANSIMAG, HMD, and Marelli. "Our brands in a lot of cases are not only leading brands, they define the category and were first in the industry."
Sundyne's water injection pump is one of many examples: "HMD was the very first magnetic sealless pump that was developed. ANSIMAG was the first magnetic sealless pump that had polymer technology added to it, which allowed it to be used for pharmaceutical and harsh chemical applications."
Oil and gas represents about 50 percent of the company's business, says Sefcik. "We service the downstream energy market -- refining, petrochemical -- and also many different chemical-type industries as well: agrichemical, pharmaceutical, industrial-type applications like mining and metalworking."
There's a common thread, he adds. "Typically, what we target are mission-critical applications. Uptime reliability is a huge deal to our customers, where they may be pumping or compressing harsh or hazardous fluids or gases. Leak-free, reliable operation, safe operation, is absolutely paramount. . . . That's typically where we compete and we believe our unique technology gives us a huge advantage."
End products range from pumps and compressors that cost "a few thousand dollars" to complex multi-million-dollar systems with components from literally hundreds of suppliers," says Sefcik. "We have a pretty sophisticated global supply chain. We have components coming from all over the world into our various facilities."
That made for logistical acrobatics during the early days of the pandemic. "It was really like putting together a puzzle, especially during COVID times," he explains. "Even in the best of times, it's a bit like that, but certainly COVID caused a lot of improvisation."
Sundyne has about 400 employees in Arvada of 900 worldwide, with manufacturing facilities in the U.S. and Europe along with sales and service locations in Japan and India. "We're doing a significant amount of manufacturing here in the U.S., the United Kingdom, France, and Spain," says Sefcik.
Many production processes are specialized. "We do highly proprietary machining processes, we have a proprietary heat treatment process we do in-house, which is fairly rare for a company like us," he says. "We have tolerances that are one 10,000th of an inch that are absolutely critical to the reliability and operation of the equipment."
After annual percentage growth in the "double digits" in recent years, 2020 was "pretty flat," says Sefcik. "We're expecting a return to growth again [in 2021] -- a little bit more muted than growth has been, but still growth."
"I'm actually just thrilled with the employee base here," he adds. "Being able to hold to more of a flat performance this year amongst everything they've been dealing with, it's really a testament to their dedication to the ability to take market share and serve our customers in a really difficult environment."
Challenges: "It's definitely the pandemic right now," says Sefcik. "We're expecting it to still be a challenge for the next several months, and that creates issues -- not only with us."
"As we continue to see markets changing, it creates challenges and opportunities," he adds. "We see more of a transitional to cleaner or renewable technologies, and our equipment is very much able to adapt to those technologies as well."
Opportunities: Continued growth in the chemical and industrial markets. "I think we've got a lot more opportunity there to continue to find the right applications . . . where leak-free, reliable operation is absolutely important," says Sefcik. "We're investing significantly in 2021 for further product development."
While oil and gas has been Sundyne's primary market for more than 50 years, renewable energy is a target. "We're making bets on where we see the strongest opportunities and where we want to invest our resources into product development and customer development," says Sefcik. Pumps and compressors are part of the supply chain for hydrogen, biofuel, battery manufacturing, and large-scale solar.
Exports could also drive future growth. "Roughly half of our business is outside of North America," says Sefcik, highlighting India and China as top targets.
Needs: Talent. "We've got needs for different engineering disciplines," says Sefcik, noting the company is actively recruiting mechanical, electrical, and hydraulic engineers. On the manufacturing side, welders and machinists are always in demand, along with "talented salespeople," he adds. "This is very much a business with technical, custom products, and we need salespeople that can be both technical and very stute and also speak to our customers knowing what's important for them and understanding what their needs are and identifying those applications where our technology fits best."
The company often looks to the Midwest to find welders and machinists who are looking to relocate to Colorado. "We've had to recruit from further away than we had in the past," says Sefcik.
"We love being headquartered here in Colorado," he adds. "We find it a great place to find talented people as well as recruit people to. There's a lot of people who love the lifestyle here, but also we are an international business and can provide some very challenging careers to employees to be able to work with and throughout the world."