One Firm's Edge: Precision Cutting With Water Jets
| KENT, WASH.
IT can slice, dice, carve, and chop just about anything - from vegetables and meat to glass, titanium, and carbon graphite.
This cutting implement is not advertized on late-night television, and if it were viewers might be a bit too incredulous to pull out their credit cards.
The sharp edge in question is water. More precisely, it is water projected in a thin stream, 4/1000s of an inch in diameter, under incredibly high pressure: 55,000 pounds per square inch. For the really hard cutting - metals, glass, concrete - abrasive mineral particles are added to the stream of water.
Flow International Corporation has used this technology to become a $79 million company in the decade since the company's first public stock offering.
Flow's proprietary water-pump systems, developed and commercialized by former Boeing Company engineers in the early 1970s, has found a variety of customers, including the aerospace, automotive, paper, and food industries.
Flow has also developed products for "hydro-demolition" - such as eroding away concrete on bridges that need repair - and for tough cleaning jobs such as removing rubber from airport runways and grime from jet aircraft engines.
"We cut chicken better than anybody else; we cut carpet better than anybody else," says Ronald Tarrant, Flow's president and chief executive officer.
Nearby Boeing uses Flow water jets to cut composite materials into parts for its new 777 jetliner. Detroit carmakers employ the systems to shape instrument panels, carpets, window glass, and other components.
Other companies cut diapers, shoe leather, and corrugated boxboard with the high-pressure water.
"It allows you to do things you could never do before," says Dave Surbeck, president of Jet Stream Inc., a job shop that uses a Flow system to cut decorative marble and tile inlay, among other things.
Mr. Tarrant claims his firm's method of cutting and cleaning is the most environmentally sensitive one on the market.
The environmental benefits were one of the key selling points for Charles Yanke, president of Vulcan Lead Inc. in Milwaukee, Wis. He spent over $300,000 to purchase a Flow system last fall to cut lead parts for X-ray machines and other equipment.
A laser system would have produced toxic fumes, while cuts made by plasma jets or torches would not have done as precise a job, Mr. Yanke says. So, after looking into products from the three big makers of water jet cutting systems, Flow, Ingersoll-Rand, and Jet Edge, he finally settled on Flow.
"They were the first ones to come out with a closed-loop wastewater treatment system," Yanke says. This means the lead particles are filtered out and the cleaned water used again by the pump, saving on his water bill and avoiding creation of hazardous liquids.
With other water jets, Yanke says he would have needed "a kozillion permits" from environmental agencies to deal with the lead-tainted water.
Tarrant says customer service had been a Flow weak point, and that improving it has been his main mission since he took charge two years ago.
"He's doing a great job," says Paul Latta, an analyst with Ragen MacKenzie Inc., a Seattle investment house. Flow has seen eight straight quarters of revenue growth, and made two acquisitions in related industries recently.
One was Spider Staging, a scaffolding company that recently won a $600,000 contract to equip Seattle's Kingdome, a roofed sports stadium, with a permanent exterior maintenance system.
Tarrant says the key benefit of this acquisition was Spider's strong existing sales network in 16 US locations. The network can now be used to sell Flow products, too, and there is significant overlap in the customer base.
Tarrant says he expects to make more acquisitions over the next few years, helping to push annual sales to more than $200 million by 1998. He aims for overseas sales, now one-third of the total, to eventually provide half of Flow's revenue.
The investment community is keen on Flow's prospects for continued growth: An article in the latest U.S. News & World Report recommends the stock as one of 25 good buys.