From $2 Million to $20 Million in Five Years: KMW Dramatically Increases OE Manufacturing, Creates Front End Loader Line

Loader Leaders - KMW president Mike Bender, left, along with vice president Dave Schneider are shown with two of the company's front-end loaders, the 1860 and the 1760. Bender operates the Sterling plant where assembly and painting take place, while Schneider operates the Great Bend facility where fabrication and welding take place. Bender handles the financial aspect of the business, Schneider engineers the loader designs and they share many of the other duties like production, safety, and Original Equipment sales.

Mike Bender, president and owner of KMW Ltd., remembers the five-year span of business at the turn of this century much like a spectator watching the Indy 500 race. The outcome is known, but recapturing every moment regarding the blur of cars through 500 miles of racing gets difficult. KMW increased its sales 10-fold during the five-year period, but the steps to achieve that increase were varied and many for Bender and company.

"I actually don't remember how many loaders we sold to get to $2 million dollars in sales," said Bender, who oversees operations at the company's headquarters in Sterling, where he began working for the company in 1979 when it was Ark manufacturing Company. "To do $20 million, we sold 9,000 loaders, along with some backhoes."

Ninety-four percent of KMW's business is manufacturing compact Original Equipment front-end loaders. The OE products are designed, tested, and built to customer specifications, private labeled, and sold through customer distribution channels. To keep up with demand, KMW doubled the size of its Sterling plant in 2002, expanded to three shifts there, and then advanced its production capabilities two years later with the purchase of the Guthrie Wilkens Trailer Sales facility, Great Bend, where KMW was outsourcing its welding jobs for loader buckets.

KMW Loader Line - The five agriculture front-end loaders that KMW Ltd. has designed are shown in this photo. Three of the larger loaders are already on the market with the other two units nearing completion. Already on the market are the 1750, 1760, and the 1860. Eventually, KMW's line of loaders will cover tractors from 255 horsepower all the way down to 70 horsepower.

"The purchase gave us control of our products," said Bender, who purchased KMW, then named ALO USA, in 1997. He changed the name back to KMW, a name it held from 1983-88. "We don't like to farm out our products and one of the goals of our company is to provide more employment opportunities in central Kansas, so moving to Great Bend helped us to accomplish those things."

Bender estimated the Great Bend plant employs about 60 people and the Sterling plant has 90. At the Great Bend plant, 198 N. Highway 281, employees design, fabricate and weld in the 32,000 square-foot facility. Great Bend has a round office complex just outside of the plant. Sterling's 52,000-square-foot plant handles additional welding, along with painting and assembly of the products. The Great Bend plant typically runs three shifts. The Sterling plant now runs a first and third shift to avoid using the ovens for baking parts during the hottest times of the day. During busy production times, KMW also operates on weekends to keep up with demand.

Measuring Up - KMW employee Dustin Walker measures the arm of a loader that is secured on the Demmeler table in the tooling and R&D room. For its OE business, KMW designs, tests, and builds loaders for other companies and then places the company name on the loaders. More than a year ago, KMW began putting out a line of its own loaders, although Bender said those loaders typically are larger than the OE loaders his company builds.

In fall 2005, KMW introduced its own product line of loaders. The line runs as large as the 1860 model for 225 horsepower down to a 1440 model for 70 horsepower. The three larger loaders are already on the market with the two smaller ones still in the testing phase. KMW is producing loader mount kits for the loaders to fit John Deere, Case, New Holland, McCormick, and a fifth tractor make to be determined. The KMW line of loaders is larger than most of the OE manufactured loaders it produces, so it avoids competition with its OE businesses in most cases, explained Bender. KMW relies on independent representatives for sales of its line with tractor dealerships. OE sales continue to dominate KMW business, but business is increasing with the product line, especially in Kansas, said company vice president Dave Schneider.

Wise Welding - KMW's Dennis Wise welds in the tooling and R&D shop. Prototypes are built and tested before the OE orders are produced. "A front-end loader never fits universally," said Bender. "We target John Deere, Case, New Holland, and McCormick for mount kits. We're looking at a fifth one, too, either Agco or Massey. It's the 80-20 rule. You find out that you can sell 80 percent of your loaders on 20 percent of the tractors."

"It's been interesting this past three months; fifty percent of the loaders we are selling are going to Kansas," said Schneider, the engineering genius behind the loader designs, who was a longtime employee of now defunct Great Bend Manufacturing before he joined KMW. "The Kansas dealers are doing a nice job of selling our loaders, but we still have a limited line. We need the other two loaders in the marketplace in order to get completely up and running." As the housing market slows, Bender anticipates a correlated slowing of business for OE loader products, so he views the company's line essential to continued growth.

Wise Welding - KMW's Dennis Wise welds in the tooling and R&D shop. Prototypes are built and tested before the OE orders are produced. "A front-end loader never fits universally," said Bender. "We target John Deere, Case, New Holland, and McCormick for mount kits. We're looking at a fifth one, too, either Agco or Massey. It's the 80-20 rule. You find out that you can sell 80 percent of your loaders on 20 percent of the tractors."

"Our business will fall as the compact tractor market drops," said Bender. "Our goal today is that 10 years from now, we have $20 million in sales with our dealer program and that our dealer program is a big as our OE program is today. Will we be selling $40 million in 10 years? My guess is that we will be somewhere short of that figure, but that's the goal. We still want to grow, just hopefully not as fast as we did during that five-year period. That pace was hectic for our business."