State of the Industry 2011: An Interview with Dave Duvall, General Manager and Lon Jennings, Director Sales, Marketing & Product Development, Comatrol, a Sauer-Danfoss (US) Company

What is your primary industry of focus for 2012, and why?

Duvall: Comatrol is driven to provide innovative hydraulic control solutions to off-highway, stationary and mobile application OEMs. As a result, we are involved with food and energy production, road building and construction, mining and golf course maintenance.

Jennings: We are heavily focused on agricultural machinery in the established markets. Tier IV is driving OEMs to redesign nearly all of the machinery within their fleets. This is a real opportunity for Comatrol and our distributor partners to assist with efficiency and control improvements that will have immediate value in the consumer markets. Because Tier IV engines will not have the same net power available to the application, Comatrol solutions can mitigate the net power losses with proportional fan drives or other innovative hydraulic circuits. Within the emerging market, Comatrol’s focus will be on aerial lifts as the construction practices in those markets change toward safer and more efficient methods. Comatrol is a key supplier in these established markets. As a result, Comatrol is well-prepared to bring the experience of the existing markets, through strong relationships, in order to meet the demands and unique variations of the emerging markets. Comatrol is also investing in applications for the windmill and mining industries, as we see these industries as an avenue to reach more customers and expand our market share.

Which would you consider to be your strongest market?

Duvall: The off highway mobile hydraulic market continues to be a core component of the company’s strength from both a supply and consumption perspective. Comatrol is focused on supporting and continuing to grow in these key markets within Europe and the Americas.

Have you diversified into any new markets?

Duvall: Comatrol has made substantial investments in our China business, growing our applications expertise, sales support and state of the art manufacturing operations. In addition to our operations in Shanghai, China, this effort is in conjunction with investments that our parent company, Sauer-Danfoss, is making in the same region. Through foundational relationship building, Comatrol is focused on meeting the control system needs of the Distribution Partners and OEMs in China. The commitment can be seen at Comatrol and Sauer-Danfoss in the professional staffing levels, web presence and capital investments. As a result, Sauer-Danfoss Group sales and profits in the region are growing strongly with a current CAGR forecast of 40 percent over the next five years.

Where have you expanded internationally? Future plans?

Jennings: In addition to China, Comatrol is participating in the expansion of the markets in Latin America, Brazil, India and Russia. Each of these markets share common attributes with the others. They are the focus of many outside investments for agricultural, raw material and infrastructure projects. All of these efforts require hydraulics as an enabling technology to the development of the projects. As such, there is an opportunity for Comatrol to provide solutions that embody our mission of Responsiveness in Motion. For example, we currently offer our distributor partners in these regions a distributor tool solution to help provide a superior customer experience.

What is your domestic distribution vs. exports to foreign markets? How do you see that changing in the next 5 years?

Duvall: We have developed our business model around speed and responsiveness to our customer’s needs. While Comatrol’s sales are equally distributed between North America and the Euro Zone, Australia and South America have also been important to the company in the traditional markets but represent a relatively small, but healthy piece of sales. The emerging market in China is where we recognize the future expansion to be. Within the next 5 years China will likely become a similar size business for Comatrol as America and Europe are currently.