A quick showcase of FET (Forum Energy Technologies) showing how this manufacturer build the best valves on the planet, and that quality beats price in the oil and gas industry every time.
Transcript of Session –
Hey, folks. Let’s learn something new about the oil and gas industry.
All right. Today, we’re going to talk about Forum Energy Technologies. They’re relative small company in our world, they’re 1.5 billion about 3,500 employees globally. But it’s a perfect example to show you why the oil and gas industry is not price sensitive.
So Forum basically is a manufacturer, they manufacture in six different segments; subsea, drilling equipment, well construction and completion, stimulation intervention, production equipment, and valve solutions. One of the things they were able to do just recently is reduce their internal cost to sale. They actually reduced it from 16.5% to 15.92%. That led from a $93 million bottom line to $151 million bottom line, so their stock value has actually gone up so they’re doing well.
I was very fortunate and recently I was able to tour their valve services, thanks to [JJ Court] for allowing me to do that and it was just amazing to watch what they can do. They were able – I was able to watch things from raw castings to partially machined to completed product and they control everything, everything from the sub-suppliers. They have unbelievable quality assurance program. They have the ability to track every little piece with unique serial numbers and processes in a complete audit trail.
So what this means is their valve solution is part of the business is not the low price leader, okay? They make quality equipment that’s rock solid, zero defects, and dependable and the oil and gas industries want to pay for that. So, I just wanted to kind of highlight this to you. Once again, a lot of people think price is the motivator when you sell in oil and gas and if you build good stuff and you stick by it and do good business, the oil and gas industry pays top dollars for stuff.
So, once again hats off to Forum, they’re a great little company doing some really good stuff out there and hopefully their business will continue to grow.