October 14, 2013
Next 2013

Allagash International's Terry Ingram breaks into foreign markets

Photo / Tim Greenway
Photo / Tim Greenway

Terry Ingram

CEO Allagash International, South Portland

Allagash International Inc.

1 Madison St., South Portland

CEO/founder: Terry Ingram

Founded: 2002

Employees: 21

Projected revenue, 2013: Over $10 million

Contact: 781-8831

Terry Ingram jokes that his command of Spanish could better be characterized as Spanglish, but that hasn't stopped him from learning the customs of doing business in Latin America. In Kazakhstan, he's learned that business is conducted at a higher decibel level than he's used to. And he's confident that, in Russia, he's learned when to sit and when to stand during a business meeting.

"Understanding the language is not as important as understanding the culture," CEO Ingram says. "Those are the things that they're looking at — did you take the time to learn the culture?"

If his company's international growth is any sign, he has.

In 2011, the South Portland-based Allagash International attributed around 2% of its valve and controls business to exports. This year, the company, which specializes in valves used in the energy industry, expects 45% of its business will be abroad, and that change isn't due to fluctuations in domestic work.

The 21-employee company's overall revenue is expected to grow from $8 million last year to north of $10 million this year, according to CFO and Executive Vice President Gene Wendland. Ingram says the company's work abroad also supported around $3 million in contract work that Allagash gave to other companies in Maine. Wendland expects the company's double-digit revenue growth to continue for the next few years.

In part, that's due to the time Ingram spent building connections in places like Colombia and Venezuela, where the company set up its first international offices this year. Ingram says executives there in the field were often surprised when he, wearing jeans and a denim shirt, handed them his card.

"The perception in a lot of countries is that the U.S. executive wears a suit and tie," Ingram says. But that ability to blend in and do some on-the-ground reconnaissance has served the company well. A trip he took to review an oil well site in Colombia provided "an opportunity to secure a long-term contract with a maintenance supplier," he says.

The company has around $100 million in bids out now between Colombia and Venezuela.

Preparing for growth

Changes closer to home also give him reasons to expect the company's continued international growth. In January 2013, the company nearly doubled its manufacturing space by moving from Portland to a 55,000-square-foot waterfront location in South Portland, the previous home of the Portland Valve Co. In addition to the expanded space, Ingram says the deepwater port access seemed an opportunity to expand the company's export business.

But that opportunity developed much faster than he anticipated. A month after Allagash relcoated, Icelandic shipping company Eimskip announced it was making Portland its North American headquarters. Ingram says he and his company didn't have a part in enticing the shipping firm to the Portland waterfront, but they've made Eimskip their exclusive importer and exporter.

"If a company like Eimskip is committed to coming to Maine, it's our responsibility to help them stay," Ingram says.

And it's in his company's self-interest as well, Ingram says. In 2014, he expects closer to 65% of his company's business will be done abroad.

While its future growth might lie in international markets, Allagash has a deep commitment to its home soil. Every link in the supply chain for the company's Northeast Controls division comes from the United States, and Ingram says he puts a focus on sourcing materials domestically as much as possible through the company's other divisions. Ingram says the strategy is necessary to end the heartache (and bellyaching) over declines in U.S. manufacturing.

"For the U.S. economy to come back, companies need to source from here," Ingram says. "And actions speak louder than words, so we're doing it."

That, he says, has resulted in some pushback from customers who say Allagash's prices are too high.

"We don't compromise," Ingram says. "We'd rather discount that business and look for other opportunities and keep ourselves focused on what we want to do."

Lessons learned

Ingram spent around a decade in the valve industry as a distributor following a six-year stint in the Navy, where he served on nuclear submarines. In 2002, he started his own valve distribution company in Maine and, in 2010, acquired the company's first line of manufactured valves from Honeywell, an uncommon move for a distributor.

Since then, his company has found a niche in oil and gas applications for its automated valve and control systems. But Ingram learned long ago not to put all of his eggs in one basket. His distribution company started out serving the pulp and paper industry, which comprises a steadily decreasing share of business.

"Everyone understands that the [pulp and paper] industry as a whole has been struggling," Ingram says, "and one of the things Allagash has been able to do as a company is diversify and see what is coming down the pike."

Gas and oil remains the company's primary focus, but it is working in domestic markets that are expanding, including the HVAC industry, power generation and wastewater. Ingram says he's set on serving a diverse range of applications through the company's five divisions.

"Every day, someone turns a valve," Ingram says. "We manufacture a product that is used in almost every aspect of our daily lives."

Allagash's approach to new projects is largely collaborative and focused on problem-solving in the specific industries it serves. That focus has driven Ingram to hire people with experience in specific industries, like Operations Manager Wayne Michaud, who has 20 years of instrumentation experience that began in the pulp and paper industry.

"If customers have problems, I can come up with solutions," Michaud says, precisely because he's been in his customer's shoes before.

That also characterizes the company's approach to its work abroad.

"The offices [in Colombia and Venezuela] offer engineering support," Ingram says. "We don't really have sales staff there."

In general, Ingram says Allagash will either seek opportunities to join bids by other companies or will lead a project for which it will gather collaborators.

"We're not the typical manufacturer," Ingram says. "We'll partner to bid on an entire project rather than bidding [on] just a portion of a project."

That strategy has allowed the company to build relationships and a reputation in the countries where it's seeing the most growth. That, in turn, has the potential to launch his firm from the $10 million range to the $100 million range, Ingram says.

In particular, Allagash has a good chance at a $200 million contract to build land-based oil rigs for a Colombian firm, for which it has previously provided just the valve systems.

"Even though we're a small company, we're being asked to play ball with the big boys," Ingram says.

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