Ken Rossy, vice president of sales at surface preparation company HoldTight Solutions, explains how the pandemic has prompted the corrosion control industry to become more creative to overcome logistics and market constraints.
He also breaks down why it’s the type of business, rather than geography, that is most likely to shape a company’s outlook for the remainder of 2020. Tune in, and check out the complete transcript below.
[This podcast was recorded on June 12, 2020.]
Ben DuBose: Ken, good morning. How are you?
Ken Rossy: I’m good. How are you doing?
BD: Doing well. Thank you for joining us. I think a good place to start, before we get into more specific questions about business, COVID-19, what’s been going on the last couple of months, what will happen in the months ahead, for anyone who isn’t familiar with you or your company, HoldTight Solutions, just give us a little bit of background about size, number of employees, where you’re based, your services. Just give us some background on HoldTight briefly for any listeners who might not be familiar.
KR: Sure. My pleasure. HoldTight Solutions, we’re based in Houston, Texas. We’re a family-owned business. We have nine direct employees and we are a manufacturer and distributor of additives, coatings, testing equipment for the coating surface preparations industry to assist with cleaning blasted surfaces of soluble salts and contaminants and to prevent flash rusting prior to coating. My priority product is HoldTight 102. It’s used with dry abrasive blasting, wet abrasive, and UHP [ultra-high-pressure] blasting.
Additionally, HoldTight distributes a preservation coating, HT 365, to prevent corrosion, combat flash rusting on bare steel for up to a year. This is used for storage, shipping, and fabrication of steel products. Finally, HoldTight is a distributor of testing equipment for measurement, surface conductivity, and water quality. It also benefits the surface preparation market. We’ve been in business for over 30 years. I personally have been in the corrosion protection industry for over 29 years. So I’m somewhat of a veteran, I would guess.
BD: Definitely. One thing that’s interesting about HoldTight, you mentioned being based in Houston. Texas is one of the first states to emerge and begin re-opening. That process began in early May. I know a lot of your clients were probably essential businesses anyway, but then there’s so much variance overall from state to state. So whereas you guys, your offices, you might be able to go back earlier than some of your clients. How difficult has it been or how much of a challenge, if any, to navigate in COVID-19 the fact that what’s going on for you in Texas might not be the same as one of your clients somewhere else? Has that been an issue for you in any capacity?
KR: It really has not. COVID-19 has definitely put us in a position to have to work with everybody else’s schedules and everybody else’s situations. But what we have found over the last three months that we’ve been involved with this has been that the people are able to conduct business. The challenge has been, most specifically, for our distributors who are our customers, if they are restricted as far as going in and seeing their customers. So we have found that virtual meetings, phone interviews, phone meetings have become the lifeline to sales directly to the customers of our products. But everybody’s in the same situation.
We have found, internationally because we sell our products worldwide, that on an international basis, we’re seeing some markets, they are already starting to experience the second wave and everybody is preparing. That has definitely impacted their ability to sell. But for the most part here domestically, it’s not been a huge issue because our product is typically used in what people consider being essential businesses. We just have had to come up with new ways to get to the customers.
BD: Are the customers able to go out in the field and travel as much as they normally do? I know their business is essential in most cases, so that certainly helps, but the fear that I would have is that just overall, some of the constraints or the hesitation from companies might make them a little more hesitant to put their workers out in the field. Has that been an issue at all? If it has, what are some of the strategies that they can use to overcome it?
KR: It sure has. Like I said, typically in one area — as an example, Houston — in the petrochemical and refining market here in the city of Houston, most of those plants have closed their doors to people coming in and visiting. Primarily because of potential transmission but also because most of their employees are not at the plant either. So the result, what I’ve seen, is the same thing that we’ve had to do with our customers, our distributors, is people are going to virtual meetings. They’re coming up with creative ways to stay in front of their customers, to transact business, to specify, plan out projects. So people have had to become creative.
I think one of the more telling things that we will start to see as business has opened up is whether projects that have been planned during this period of time, that were delayed, whether they’ll actually come back or not. I can remember when we first started dealing with COVID, my distributors said, “Yeah, we had projects planned for April, May, June, but they’ve just been delayed.” To see if those really do come back will, I think, be interesting over the next few months.
BD: Universally, one thing that’s true across the board when it comes to your end users and really anyone listening in this industry, everyone is under pressure to cut costs these days because no one budgeted for this, entering 2020. So with some of your end users, your customers under pressure to reduce their costs, how have you adjusted to that on your end?
KR: One thing that we’ve really attempted to do here at HoldTight has been to be creative in thought as to how we can be relevant — continue to be relevant — with the end user and our distributors. That has forced us to look at consideration of different options to provide them with economic reasons to continue to invest in us and to work with them more creatively with terms and things like that that in the past we just haven’t had to really consider. Quite honestly, my personal feeling about this COVID, as tough and as difficult as it has been, it has forced us as a company — and I believe really most anybody that’s viable to the economy — to become creative. To do things that we didn’t feel like we ever got to do and to figure out ways to do it where it’s a win-win for both sides of the transaction.
BD: I’m curious if there are any industries that are under more pressure at the moment than others when you look at those end users. You mentioned earlier that international companies are feeling the pinch even more because now you’re starting to see a second wave in some of those locations. The same can be said about select states around the U.S. I know you have a variety of end users. We talked about the geography of it earlier with the second wave internationally. I’m just curious, from business to business, is there any certain segment that’s feeling it more than others, or is it just all about the geography at this point?
KR: I think it’s more the business as opposed to geography. I think the industry that’s most obvious that’s being impacted, at least in our world, is the energy industry. It’s certainly been impacted not only because of COVID but also as demand is down, supply grows, prices drop. It’s truly affected the energy industry here in the Houston area and I think worldwide. We see that through all our distributors. So that’s something that we have to be conscious of. As a result, we had to make a few concessions. We had to work with our distributors to help them deal with the effects of that industry.
On the other hand, though, the positive thing is that there are industries that are now able to step forward, whether they be infrastructure, construction. There are other industries that utilize steel as a part of their backbone, and as a result, they need coatings, they need corrosion protection. So it’s forced many of our customers, our distributors, to look to new markets. I’ve had the opportunity to lead some sales meetings and teaching sessions by way of Zoom and other platforms.
The great thing has been the discussion that has occurred about new markets. If the traditional markets are stretched or damaged at this moment, how can we go out and sell your product, our other products to other markets that have not had to really look at in the past? So that’s taken a lot of creativity and brain power to come up with other markets. I think we’re starting to see the effects of that.
BD: Generally speaking, how much of your business is on hold until there’s a vaccine, which is probably, from the estimates I’ve read, mid-2021 best case for one that’s widely distributed? I find the timeline a little interesting because, at the moment, we’re in this in-between phase in which most places aren’t under a lockdown, yet at the same time it’s not business as usual, at least until you get a vaccine. You mentioned all the Zoom calls that you’re having to make still these days, as we’re talking in mid-June.
I know a lot of your clients are essential business, so with that said, now that there’s no lockdowns and travel is easier than it was a couple months ago, is the majority of your business going to be able to take place over the next six to 12 months? Or are there large components that you’re not going to have back until there’s a vaccine? I’m just curious from HoldTight’s perspective, how much is about waiting for a vaccine and how much is fairly optimistic in terms of the bounce-back that you might see for the remainder of 2020?
KR: For one thing, when you look at 2020, it’s really day to day, month to month as to what’s going to happen with the economy, both in the U.S. and internationally. I do feel like some kind of a shield that we can have as a society, being a vaccine — until that is available to us, the area that I see being impacted the most are the face-to-face opportunities that you have.
For us, the biggest opportunity for those face-to-face meetings is conferences, trade shows, times where people get together and can visit with each other, share ideas, learn more about each other and products. That’s more challenging. I quite honestly don’t see that changing until 2021 and probably not until we do have a vaccine. That is the area that I think we’re going to miss the most. But again, it leads to creativity and working harder in other areas to compensate for that loss.
BD: No doubt. We certainly know that here at NACE. This coming week was supposed to be CORROSION 2020. Obviously, that’s not taking place due to the ongoing pandemic and the restrictions on travel and large gatherings. So I think you’re right. It’s certainly something that, until you get a vaccine, you’re not going to have any sort of normalcy on that front, and there is a trickle-down effect on business just from the networking, the face-to-face that takes place in those types of forums.
Ken, as we wrap up, any final thoughts as far as lessons learned over the first three months of the pandemic? Outlook for six to 12 months, it seems, until there’s a vaccine? Basically anything that we haven’t covered in the last 15 minutes or so that might be of value to our listeners that you’ve learned about the corrosion industry as it pertains to COVID-19 and the best ways potentially to navigate it in the months ahead.
KR: What we have really appreciated is organization. I’ve watched other organizations like NACE and publications like yours come up with new ways to reach their customer base — we’ve had to do the same thing. It’s caused us to really consider what we do on a daily basis and how we can create more of a team, not only within our company but also with our customers, our distributors. It’s really forced us to reach out and expand relationships that have always been there. But now that people have time, there’s the opportunity to spend a little bit more time, even though it may be virtual or over the phone. You still can form relationships.
What I’ve really enjoyed, and I’ll never forget, one conversation I had with a customer out of Louisiana, just hearing his story about the positive impact that COVID has had on him and his family. He would never have dreamed of sharing anything like that with me prior to that. But I think there’s a need to personalize, even more so, our efforts, again because we’re not going to be able to be face-to-face for a while. So that’s one of the takeaways from this whole time that has been fun and also a challenge to figure out how to do that in a way that makes sense for both parties.
BD: Ken, thank you so much for the time. Look forward to catching up down the road.
KR: Thanks, Ben. I appreciate the opportunity.
Editor’s note: Listen to all of the other interviews in CoatingsPro’s COVID-19 podcast series.