Fraser Steel is bucking the economic downturn by investing big in big equipment — just the opposite of what many fabricators are doing. Albertville, Minn.-based Fraser Steel, a global specialist in precision tubular parts, components and assemblies, is taking advantage of the temporary market lull to make strategic equipment purchases that will expand its production capabilities and, it believes, position it to grow. “This is something we've done before in past downturns,” says Baxter Stephenson, COO for the company. “We've always believed in investing in technology, and over the past eight or nine years we've spent $8 million to $9 million in this strategic model.”

In fact, literally days after 9/11, the company purchased a laser tube-cutting machine, making it the first contract manufacturer in the United States to own one. Over the next six years, Fraser acquired three more tube lasers, giving it unmatched capabilities and capacity, Stephenson explains. “We try to anticipate technology advances and be the first in the industry to get them on the floor, and the big bender is literally ‘the next big thing,’” he says.

The company does a lot of welding, and has invested in robotic welding technology, as well as lots of tube laser-cutting equipment, automation, tube bending, and that “next big thing” — a tube bender.

“The big bender will make us more attractive to OEM manufacturers who prefer the convenience and cost advantage of one-stop outsourcing. It also will help us capture more large welding business,” says Luke Fraser, Sales and Marketing Manager and a third-generation Fraser involved in the business. “Until now, we had to either forgo or contract out projects that involved large tube bending.” Fraser's previous bending capacity was 2 in.; now, with the big bender, its capacity it is 6 in. Fraser has always had a rigorous philosophy of investing profits back into the business. As a result, the company has very low debt and operates from a strong cash position. This allows it to take advantage of expansion opportunities when they present themselves. “Not every manufacturer has that option, especially now,” Stephenson says. “We believe the only way to predict the future is to try to create it,” Stephenson says. “Rather than just feeling bad about what's going on in the economy — we can't control that — we focus on the things we can control, and identify pockets of opportunities, and put our resources into efforts to capture new business.”

Fraser is a privately held company, so it has operated conservatively over the past 39 years it's been in business. “We're market driven, so we tend not to buy equipment unless we have a good feel for our ability to sell that capacity,” Stephenson says. “We honestly believe we can sell this capacity.” Stephenson adds that there are two types of companies that a downturn in the economy will reveal: “those that use the downturn as an opportunity to redefine themselves and improve their business; and those that ‘turtle,’ and get the short end of the stick. We feel that we're creating a good future for Fraser.”