“...In ten years, dredgers can be unmanned and fully automated.” - Bob Wetta.
A tour of Dredging Supply Company's Plant at Reserve, Louisiana, with an exclusive interview with Bob Wetta, President of DSC....
New Orleans is as hot as Nigeria, weather-wise. As soon as the visiting team stepped out of the arrival lounge of the local airport, a blast of heat afflicted them as they waited for Bob Wetta, President of Dredging Supply Company, DSC. The trip is a facility tour of DSC's dredge building plant at Reserve, some twenty-something kilometres from New Orleans airport. Bob (short for Robert), the second son of DSC’s founder, Thomas J. Wetta III, soon drove by in a regular American Jeep, stopped in front of the waiting travellers and casually alighted....an apparently unassuming man of medium build with a serious mien.
On the way through the light traffic out of town, the talk drifted to the weather and Bob remarked about some similarities between Nigeria and New Orleans. One of these, he said, is the weather and the other is the oil and gas industry. At just that point, the car was zooming past Shell's huge New Orleans refinery whose pipes and steel network sprawled overhead right across the expressway. This is one of the biggest refineries in the world and during the Katrina hurricane disaster of 2005, was under water for months. To cap Bob's analysis of similarities, the grounds of the area is marshland for scores, possibly hundreds, of kilometres radius, typical of Nigeria's Niger Delta. Even the interstate expressway we were travelling on was constructed out of reclaimed marshland! This prelude was captured in the subsequent interview where Bob answered DDH's question as to whether such conditions (as environment or weather or culture) affected the dredge types DSC makes. (See interview excerpts below).
DDH gathered that DSC has been delivering dredges to Nigeria, and one particular customer Bob recalls is Chief Igwe of Umunze in Anambra State Nigeria who, he said, travelled to the plant in 1995 to seal an order for his first dredger, an entry level dredger. This the chief financed all by himself. In 1998, Chief Igwe made a repeat order of a slightly bigger model, all delivered via Lagos seaport. Then in May this year, the company delivered a 20-inch Shark dredge to Ibile Holdings of Lagos State (Nigeria). In recent times, however, it appears that DSC's supply of dredgers to the Nigerian market may tilt to the entry-level dredge contractors even though it sticks to a fundamental policy that every dredge is customisable. While this new tendency gives the green-horn the ease of ordering any of the dredge types the company has built before, it allows experienced and busy dredge owners or operators who want to increase their fleet the flexibility of naming the specifications they want for each single order (probably in response to emerging contracts). If it supports Nigerian entry-level dredge operators with suitable models, this goes a long way to provide the needed filip for the army of such startups to fully launch into the trade with self-owned equipment. Moreover, it appears plausible that loan packaging now being syndicated by Kofa International and M & T Bank for dredge and allied equipment purchasing by Nigerians would likely tip the balance in favour of those who have for years struggled at the financing hurdle.
DSC's New Orleans facility is a 5-acre property and a literal bee-hive of activity. It's aerial view only gives a hint that it's a busy spot. And no wonder because most DSC dredges bound for the US and overseas customers are manufactured here. As of 2007, the list of those customers is increasing at a pace that keeps Bob on his toes, and for the most parts, home-bound. He said if he stopped taking new orders now, it won’t be until August of 2008 that the last customer will have his dredge shipped!
Three warehouse-type buildings are constantly stocked with every imaginable dredge part which Bob explained serves the company's production needs as well as the demand for spares by customers. Many work areas exist under roof and in open air for the various stages of building dredgers. These include the workshop, sandblasting, machine work, painting and inventory sections. These are separate from the admin building. All engineering designs and the PLCs (programmable logic control) now frequently in use by the company on most new dredgers are made in-house. DDH was informed that in all, 120 workers work at the Reserve facility while another smaller batch hold fort at W & S Dredges, its newly acquired company in Michigan where 8-inch and 10-inch dredges are built.
DSC originated as a family business started by Bob’s father, Thomas J. Wetta III. Bob’s older brother, William, is the vice president of the company and oversees the engineering department of the company. As DDH gathered from the side lines, the third generation of the Wetta family now works in DSC, even though part-time. This might explain the inclination to serve customers with a little more commitment since a family name is at stake here. Bob confirmed this when he told us that most customers at DSC end up becoming personal friends, like Chief Igwe, who, at Bob’s wedding a few years ago shipped a special wood carving from Nigeria to Bob and his wife as a wedding gift.
To get to the root of DSC's company history and operations, Bob gave DDH an exclusive interview which turned out like a narration of how a humble one-man company became, in three decades, a global supplier of dredgers and spare parts. Speaking on technology, Bob says that “in the next ten years, dredgers can be unmanned and fully automated.” Now, that's speaking authoritatively. But how does he do that? Well, there is his brother, who is reputed in these parts as one of the respected voices in the industry. And his father, (Thomas J. Wetta III), who, in May this year, was named (post-humously) by the Western Dredging Association, the life time achievement award winner for 2007, for “...sharing... the latest trends, developments, and technology research…” . Then, as the interview ended and the team made to leave his office, a peep into an adjoinng office showed an engineer busy on dredge designs. The outlines of the models were bold, somewhat mathematical. This led us to believe that Bob has been in long discussion with engineers! Probably, that's how come he comes on strongly on where dredge technology is headed. Excerpts:
On the similarities between New Orleans and Nigeria...
Bob: Here we are rich in the oil business and gas…I have never been to Nigeria but from what I have seen in pictures and television, and reports about the swamp environment, the weather, etc, it’s very similar according to what I have been told.
DDH: Do things like these conditions influence the kind of dredges DSC makes?
Bob: Any environment or any project that we look at, we are going to look at it from engineering basis. We are going to look at every condition that is known to us, that is available to us. We are really not a company that says I have a dredge on the shelf here, would you like to buy this one off the shelf? We are more interested in what the customer is trying to establish, what’s his goal. As an engineering manufacturing firm, what we want to do is use our expertise to say that these are some options, this would be our recommendation, and not try to put someone into something just because we have it built.
DDH: Is this how the concept of custom-built came into your operational lexicon?
Bob: That’s correct. More and more jobs became very specific. The customers became more educated on what they were actually trying to do, they started understanding dredges, what a pump does, etc. And at that point they rely on a manufacturer to help guide them to the right machine. So that’s when we decided that for us it would be best to look at someone’s goals and not just try to sell them a product just to sell them something.
DDH: So what kind of customers do you have in the New Orleans area?
Bob: Well, there is not actually much dredging in Louisiana. You have some coastal dredging but usually that’s like hopper dredgers. And then you have some very large cutter head dredges, but that is for contractors who have owned these dredges for thirty, forty or fifty years. So, you are not going to get an opportunity to sell to these customers or potential customers because they already have equipment. So, in our area here, we do very little business. I would say if we do one dredger every five years in this area, it’s plenty.
DDH: What would that be for?
Bob: For sand, typically in a river. That’s been the most common. We do some for small dredges for environmental work, for coastal work, sometimes the work is performed here in Louisiana but our customers may be in a different part of the United States. We sell to them and they actually come and use the dredge right back here in Louisiana.
DDH: The other time, we were talking about entry-level dredges but DSC makes many big dredges. Do you still make smaller dredgers?
Bob: DSC is going to make 8-inch through to 36-inch dredges. DSC has invested a lot of their effort in technology, PLC-based or computer-based operations and we’re actually trying to bring the dredges up to the modern technology that is available to us. That doesn’t work for everyone. Three years ago, a group of owners, DSC and another partner of ours, purchased a company called W & S Dredge manufacturer. They offered a complementary product line to ours because they concentrate on smaller sized (dredges) that we really were not focusing on too much. And it was very mechanically-oriented and most simple to maintain. We thought that was a very good opportunity to complement our product line. So, we purchased that company. And since then our goal has been to produce four or five dredges a year at that company and right now we are on our sixth dredge, so it meets our expectation. And this is the perfect type of dredge if someone says I want to get into dredging business and I don’t know if I want to put in millions and millions of dollars, but I would like to see if this is something that I can explore and make money with, this is the perfect opportunity.
DDH: So you would be poised to supply all such orders?
Bob: Correct. Now on these dredges, I don’t offer much customization on them. These are dredges that we are producing, kind of assembly-line, only a 10-inch and an 8-inch. And we are trying to keep one of each in stock at all times. With a small workforce, we want to keep everything simple and not get into too much of the customization. Anything customized basically turns over to Dredging Supply Company.
DDH: From your own recollection, how long has the family been in the business of making dredges?
Bob: My father’s first job, which he took when he was eighteen, was for a company called Standard Dredging. He started out and went in and out of different divisions of that company based on being drafted into the military and getting a college education. He eventually went to work for, at one time, the largest contract dredging company in the US, T.L. James Company. And he worked for them for several years. He helped them develop their sand and gravel dredges. They used to do a lot of construction-type jobs for infrastructure, for highways and stuff like that. As they started getting more and more into the highway work and they were buying materials from someone else, they figured, ‘why can’t we produce our own material and cut those costs’. Well, that’s kind of when the sand and gravel division was started for T.L. James around the early 1970s. And that was really his love, to get off those big giant dredges and focus more on the smaller sand and gravel dredges. My brother and I came into the business, my brother is older than me and he came in when he was fourteen and I started working when I was fourteen, only in summers when we were out of school. Basically from that point on, that was the only job we’ve ever had. So, once we went through school and everything, and decided to have a life-long career, that’s what we chose. My father passed away in 2004. My brother and I have been guided by his philosophy ever since.
DDH: So, that’s how DSC came into being?
Bob : Actually in the history of Dredging Supply Company, there was another company called Kenner Marine that my father owned. Kenner is the city that we came through from the airport and that’s the way it came about. That company had some financial problems in the late 1980s and an investor came and helped financially get that company back on its feet and converted the name to Dredging Supply. It was in 1989 when Kenner Marine became Dredging Supply. The investor was my father’s friend and made a deal with him that whenever he was ready he could buy back the company. In 1994 we bought the company back, under my father, my brother and myself.
DDH: How many kinds of dredges has DSC made in the past and how many do you continue to make today?
Bob : We have different models of dredges and basically the models are just to help give the customer an idea of the dredge’s functionality. What we want to do is get someone looking down on a model and say, okay, I like the dredge that the ladder swings and not the whole dredge swings or where the ladder just swings, that's two different models, a Marlin or a Baraccuda. And then you have your conventional dredge with spuds and the pump is in the hull, that will be a Shark dredge. Then we get into the mining series, Marlin dredges have the pumps on the ladder. So, that's basically the types. Again, this can be offered in many varied sizes. Right now the swinging ladder dredges range from 10-inch to 16-inch and the Shark dredges go from 8-inch to 36-inch. The Marlin dredges start at 8-inch; the biggest has been 20-inch, but there is no limit to that, it's just what someone wants. As far as how many dredges we have built, I have summed them up in a sheet here because I knew this question would come. (General laughter). Whenever someone asks me how many dredges we build in a year, I can't accurately tell because it varies. If that year everyone wanted 8-inch dredges, I could build 30. But if in a year everyone wants 20-inch dredges, I am going to only make 5. So, it's basically depending on the way they come. But right now, in 2007 we are going to do about 18 dredges, and this will be between 2007 and 2008 because I can't finish this amount of work this year. But the backlog of work right now...if we shut everything off today, it's going to be August of 2008 before I could finish the work.
DDH: Does that include the 60-metre digging depth dredge?
Bob : That's correct.
DDH: Is it the fact that probably that may be the deepest digging depth of any dredge around the world?
Bob : I don't know but I consider that particular dredge a mining dredge because it's a sand mining dredge. I don't know of anything in the US that can dig deeper than that as far as a hydraulic (dredge is concerned). They have mechanical dredges that can go to those depths but as far as I know, no one in the US has ever done it. I know there has been some dredges that can go that deep maybe in Europe, but I don't know what the application of the dredge was. I don't know if it is a mining dredge.
DDH: Are you free to tell us who is the customer of that dredge, the 60-metre dredge?
Bob : I don't want to say the name because.... this company is going through a big buy-out; a very big company is buying this other very big company and they are very secretive about what they want to be out in the press. All I can tell you is that it is a major sand producer in the south east.
DDH: So, it's going to be used mainly for sand mining?
Bob : That's correct, strictly for sand.
DDH: And it is going to be stationary, in one place?
Bob : That's correct.
DDH: Any particular policy about what kinds of dredges you manufacture or which segment of the local or international market to supply?
Bob : We are a dredge manufacturer, if anyone needs a dredge, they are free to come in. The only places we can't go are places stipulated with trade sanctions by the US government.
DDH: How does this affect you, has it affected you before?
Bob : Yes. An example with a nation like Iran, I can't sell without getting some kind of license. I have actually had a project sent to me on a company that we didn't know was an Iranian company because the owners were not Iranian but that's where the dredge was going. But we had to refund the deposit on the dredge. That's the only place (we couldn't serve).
DDH: And are there any particular countries you have targeted for intensive marketing?
Bob : Well, I would like to say that we are trying to start something now for Nigeria. Obviously that's a big potential for any dredge manufacturer. Probably the biggest requirement for dredging in the world now seems to be in that area. There are some places in the Asian market that are just as well. We have always found that between the US market and what we export, the US market for us is 70% - 80%, but this year it's going to be 50% -50%. So, it's a good trend to see that now we are becoming more and more organised for the global market.
DDH: Do you find that in emerging markets like Nigeria or other African countries, the option of loan financing is used more of the time by your customers?
Bob : (Turning to Dada) Dada, you may want to help here. (General laughter). And let me explain why. As far as the commercial aspect is concerned, that's handled a lot more by Charles Sinunu and Mr Dada. I try to stay in my expertise more...the size of the equipment, the design, and I don't get so much involved in the commercial aspect. But in a nutshell, if we can arrange for competitive financing, I think that's the key factor in making any sales. And Mr Dada, that's one of the huge things he brings to the table.
DDH: Now speaking globally, what is your understanding of the direction the global dredging industry is taking in terms of technology and the various needs of various nations?
Bob : I think Dredging Supply is at the forefront of the technology for dredging systems. I think we are right along with the Europeans. But for the US, we are out there (waving his hands in front). We are the only US company that manufactures our own operating systems, builds our own PLC, does our own programming, supports our own processes, 100% . If a customer says he wants to move with technology and get to some of these computerisation, they (other US dredge manufacturers) have to outsource it.
DDH: What is PLC?
Bob : Programmable logic controlling, and I will show you that. Basically you can think of it as a very small computer system. And again, we build that in-house. That's cutting edge for the small dredges. Big hoppers have always had that, but no one has ever brought it down to the small dredges and that's what we have done. We've built a lot of things here for testing. I can go out in our yard and show you things we have built to cut rocks. If we have a customer who says, 'I need to get to crush a rock', how do you know what is required to crush this rock? Well, we have actually built devices that can measure the strength required. We have created computer programmes that not only look at the pumping aspect of the dredge, but how to feel or gauge the material. I think as far as the technology, we are just trying to offer more than 'here's the dredge', we are also trying to understand and bring everything we know to help solve the problem.
DDH: Have you had to make dredgers that are specific because of the terrain or soil nature of that nation?
Bob : Yeah, we are doing one like that now for Iraq which will be able to take pictures of them (terrain), and all that. Mostly when you talk of terrain, the biggest requirement would be talking about the transportation. Once the equipment is in your site, it's not a problem but it's just getting the equipment to site. We have thought about that. Some contracts we have right now are dredges that are containerizable; something where even though it may take ten 40-ft containers, when it gets there, you put the puzzle back together and it's a dredge. So, that's been the challenge with the terrain, the transportation requirement is one big issue.
DDH: As a person, how do you personally relate your life to the dredgemaking business. Even though your family connection is there for starters, is it something you now reconcile as a childhood dream or would you still call it a career or business investment decision, in the long run?
Bob : Probably up until I was about twenty-five or twenty-six years old, my father and my brother would tell you I was trying to be a street musician. (General laughter). But I knew in my heart that there was no money in that business. (More laughter). It just took me a while to decide that this is what I wanted to do. My original involvement in the company was more on the financial side. It wasn't on the sales side or engineering but strictly on the financial side. And then it went into the (spare) parts side, and when you start selling parts, you start learning what each part does. Eventually it got into some dredge sales. And the true dredge sales portion was when my father got sick. He was really the salesman and someone had to stand up and try to do it, so that was my opportunity. So, I jumped in head first. I didn't know anything else I wanted to do. It was to me almost like instinct. I think that was the right thing to do, I can't tell you why, I just (chose it).
DDH: Is it a decision you have come to love or regret?
Bob : It's like any other business. You've got some days you wished wouldn't happen, you've got rainy days, you've got stressful days. But if you look at it on the whole, it's been a wonderful opportunity I wouldn't trade for anything else. You know the term, baptism by fire...that's how you learn here: it happens, you learn it, you know it...on-the-job-training. The things that happen in this industry, you can't prepare yourself for. Every challenge that comes up prepares you for the next challenge.
DDH: Any abiding vision for yourself or your company in the dredge manufacturing industry?
Bob : One thing that I think would be good, that we need to strive for, would be more education. And that is to dredge users, our customers and clients. I think the industry as a whole is doing a poor job of educating people to make them successful. And I think these workshops that you are talking about that would go on in Nigeria are very very important. We are trying to do the same thing here in the US. You are succeeding faster than we can. It's hard right now because when I try to assemble a team that would go and do these things, it seems I have to have some (other) things done...it's such a challenge right now (to find the time). Another thing that I envision is one day DSC is going to have this travelling force that goes not only for the education but where we do maintenance contracts. I can say, I am going to go to this country, we are going to be here for one month. That way, we can help customers prolong the life of their equipment. People that don't understand how to maintain it, if we can be there, you don't need a year to say, 'hey, you need to do this, you need to do that'. I think that's very important. And I think, we are not there yet, but that's a vision, that's a place that we need to be. I am very well aware that you can't be very successful in any other country from sitting in this office here. I have to have feet on the ground, I have to have someone over there. I need to have support on the ground. Even in the age of the internet, we can publish over 90% of the problems by either telephone or by internet. There's going to be a 10% tear and wear. That's a challenge: how do we have a network all over the world? That's something we have to strive to get to.
Bob : Hopefully you understand from talking to me that this is kind of a passion. What makes us happy is not 'oh, we beat the cost or we made extra profit'. Our happiness is 'oh, they got a good dredge'. 'Look how much money they are making with that dredge we built...', that's what makes us; that's why we are different from somebody else. It's not just the job, it's when you succeed, we succeed.
DDH: How does this affect your relationship with your customers? You were telling me about the man who gave you a wood carving when you married. Is that typical of the kind of relationships that develops between you and your customers?
Bob : Absolutely. Our best sales people are our customers. And they become our best friends. And why do they become our friends, because we do what we say we are going to do. That makes a customer buy not just one dredge, but two, three or four dredges and tell his friends. That's how you grow the business.