Genesis Attachments says the key to its success has been in manufacturing quality hydraulic attachments, as well as quality service. today, it is focused on lighter, smaller and more transportable products.

To make a high-quality product, one must start with the highest-quality material, says Genesis Attachments CEO Bruce Bacon.

The company – a subsidiary of Cedar Rapids, Iowa-based Paladin – is serving niche markets with its high-end hydraulic attachments for metal and steel recycling processors and heavy industrial contractors in the demolition and reconstruction industries.

Bacon says Genesis’ attachments are easily distinguished from that of its competitors because its product starts with the best raw materials. The company uses high-strength Weldox 130 steel imported from Sweden to produce its line of mobile shears and processors. “Our philosophy is that we are going to the top-end of the market to build top-of-the-line [attachments],” he asserts. “We [differentiate ourselves] through our materials, our methods and our customer service. We think our customer deserves a premium product at a premium price.”

Genesis produces more than 13 styles of hydraulic-powered attachments, sold in 28 countries. These attachments are capable of cutting or crushing heavy-duty materials such as concrete and steel.

In North America, the company maintains a 50 percent market share in mobile shears, gained from producing a consistent product. The Genesis’ XP and Pro Series mobile shears have become the attachment of choice for demolition and scrap recycling professionals, it says.

Acquiring Expertise
Bacon, along with then partners Kevin Bakke, Curt Frahm and Ken LaBounty founded the company in 1997 as Genesis Equipment & Manufacturing. “It was a start-up company where all we had was what we believed we could do in the marketplace,” Bacon recalls. “We built a new facility in 1998 and we did $4.4 million in revenues that first year.

“None of us had experience in the manufacturing side, but I had enough sense to hire high-quality manufacturing people to take care of that side of the business,” he says.

In 2004, Genesis was acquired and renamed Genesis Attachments by what was then known as Attachment Technologies Inc. (ATI) – a portfolio company of Norwest Equity Partners with expertise in attachment manufacturing. AIT operates a long list of brands including Badger, Pengo, McMillen and C&P. That same year, ATI was renamed Paladin and it continued its expansion through acquisitions of other brands in the attachment industry.

Selling the company to a larger investment partner was a good move for the company and allowed it to reinvest money from the sale back into the company while retaining ownership of the facility and the land it was based on, Bacon says. Further, Bacon explains that Paladin brings to the table access to additional technologies, products and markets in which its sister companies operate. Paladin also allows each of its subsidiaries to take ownership in their entities and work force. “We hire for attitude and intellect and try to build a team that is self-sufficient,” Bacon asserts. “All department managers here really have autonomy and take care of their own staff and budget, yet they still work together as a team.”

Well-Equipped
Using what Bacon refers to as “hard-learned engineering methods,” Genesis produces roughly 500 attachments annually at its 50,000-square-foot headquarters in Superior, Wis.

As product demand has grown over the years, so has the need for additional production space. “Demolition has been steady the whole way through,” Bacon explains. “The methodology of how demolition is accomplished has evolved. Where it used to be a wrecking ball and jackhammer is no longer.”

To support the rapid growth at the company, in mid-2004, the company broke ground on a 20,000-square-foot factory expansion to the former 30,000-square-foot plant. The additional space provided room for an enhanced machine shop, a second burn shop that can support high-definition plasma cutting technology, an excavator/attachment installation facility, additional warehouse and parts storage and additional office and training space. The expansion also increased the employee base by 20 percent.

“The market as a whole has grown, with the metals and scrap recycling industry growing substantially since 2003,” Bacon notes. “That’s a direct reflection of what’s happened in the metals industry. The appetite in China and India for scrap metal is very high.”

As supply and demand goes, however, the cost of raw materials has also skyrocketed. “The price of any steel product has gone through the roof, and it’s put some margin pressure on us, but we really don’t feel it,” he admits. “If you look at the total cost on the content of our product and labor cost, we’ve had price increases every year since 2000. So have our competitors.”

Genesis adjusts to fluctuations in price by improving its manufacturing processes. “One of the things we’ve done on the manufacturing side is invest heavily in machining centers and in tooling and jigs and fixtures for fast set up to go on and off the machining,” Bacon says.

“In addition to technology investments, the company also practices lean manufacturing. We’ve had an MRP system in place from day one, but in the last couple of years we’ve invested in value stream mapping and 5S on the factory floor,” he continues.

A Cut Above
Dealing in capital-intensive industries, Genesis must provide a highly durable good and an attentive customer service staff, says Steve Kenigsberg, owner of Simko Superior Ltd., a scrap recycling company also headquartered in Superior.

With more than 47 years in the scrap recycling industry, Kenigsberg knows exactly what qualities to look for in a mobile demolition shear. Those qualities include durability, powerful cutting blades and ease of use. “The relationship I have with [Genesis] is one that anyone who purchases from them can come to rely on,” he claims. “It shows in their workmanship and long after the sale.”

But Kenigsberg was not always a Genesis customer. In fact, before his first Genesis shear purchase in 2001, he had been a 15-year customer with the competition. But, as his workload increased, Kenigsberg found that the competition’s shears were no longer up to par. “I find that the original structure material is far superior to the other brand and [the shear] takes considerably less revitalization at the end of an 80-hour [project],” he explains. “We use to spend eight hours of work bringing [other shears] back up to our standards for every 40 hours of work. Now we’re getting three times the amount of production before we have to stop for welding or repair.”

The other difference Kenigsberg noticed was the high regard in which Genesis holds its clients.

“The first hiccup we had with them, the first thing they said was ‘We’re going to get you back online and back into the production mode, and then we’ll decide whose fault the malfunction is,’” he says. “That was the most satisfying thing I could hear, and at that point they gained so much respect from me.”

Since the industry rarely slows, Kenigsberg says he needs equipment that keeps up with the rapid pace. According to the Institute of Scrap Recycling Industries Inc., the U.S. metal scrap recycling industry contributed $65 billion to the nation’s economy in 2006. Annually, 150 million tons of scrap materials are recycled including 81.4 million tons of iron and steel, 1.8 million tons of copper and 4.5 million tons of aluminum.

“In this industry, [we are] cutting steel with steel, so there is a wear factor,” he notes. “Genesis equipment does more and lasts longer.

“It doesn’t wear out and it doesn’t need replacement. These guys stand behind their product, and they stand right behind it.”

Staying Close to the Market
Although the company has proven strength in the marketplace, it is not content to rest on its laurels. Genesis keeps a watchful eye on the changing market and develops new products as necessary, as well as improve on its existing line. “We’re very close to the market, so we really pay close attention to the methods that customers use,” Bacon says. “I try to put myself in that person’s place. Then I talk with the R&D department to figure out if we can accomplish this.

“Our mobile shears are on their third generation in the 10 years the company has been around.”

Genesis is currently in the process of developing two new product lines for the commercial demolition market. “The products that are out there work well, but what we’re developing is a product that is lighter, smaller and more transportable,” he notes.

The emphasis on product development also appeals to the end-user. “They continue not to sit on their laurels,” Kenigsberg says. “They are spending huge dollars in research and development to make a good product even better.”

In June, the company also launched its rebuild service program for its own products, as well as its competitors’ attachments.

“We know that it’s a market that is recession-proof,” Bacon notes. “The price to rebuild is between 30 and 40 percent of buying a new piece of equipment. Virtually all demolition shears or sophisticated scrap metal shears are all rebuilt at some point down the road, and it certainly can extend the life of the product.”

Although such investments come with risk, Bacon says he would rather continue transforming the company than standing still in the market.

“Whenever you try to put a product into development, you are taking risks, and not everything we have done is perfect,” he says. “But, if we have a design issue that pops up in the middle of a [production] cycle, we adjust.”