Piping Technology & Products, Inc. (PT&P) is one of the leading manufacturers of pipe supports and other piping products in the world. This book is the story of how the Houston-based company grew out of a small engineering consulting firm to take a prominent place in the piping industry. The company’s founder, Durga Agrawal, first came to Texas in 1968. A young college student from the small village of Lakhanpur, in central India, Agrawal had planned to complete his graduate studies in engineering at the University of Houston and then return to India to establish a business. Although he did not know it at the time, his arrival in Houston marked the beginning of a journey that eventually would lead him into the world of manufacturing, not in his native India, but rather in the go-for-broke atmosphere of the energy capital of the world—Houston, Texas.
When Durga Agrawal first established Pipe Technology & Products, Inc. in the summer of 1978, he sought to create a niche for his company in the pipe support industry by providing fast, dependable service for his customers. He accomplished this primarily by developing innovative designs that improved the company’s line of products and made the firm’s production methods more efficient. This enabled Agrawal to reduce the extended lead time—that is the amount of time required for products such as spring hangers to be manufactured and delivered—that had been the rule in the days before PT&P. Agrawal’s innovative approach to the piping industry and his willingness to diversify into new areas of manufacturing enabled his small company to survive and prosper in a highly competitive environment. Later during the mid-1980s, when Houston’s economy crashed with the demise of oil, gas, real estate, and petrochemical industries, PT&P, like other industry-dependent companies, found itself in a struggle for survival. Yet, while many competitors saw their business fail, PT&P not only survived but also thrived during the economic downturn. How then did this upstart business out-maneuver its competitors in a way that enabled the company to survive Houston’s economic “bust” of the 1980s and become one of the leading manufacturers in the piping industry?
Preface and Acknowledgements to First Edition
The Piping Technology & Products historical project, in keeping with the spirit of PT&P, truly has been a team effort. As the project historian, I am deeply indebted to a number of people without whose support and participation this project could not have been accomplished. First, this book would not have been possible without the strong commitment of Piping Technology’s founder and president, Durga Agrawal. He selected Benjamin T. Rhodes, Vice President, to oversee the project. Ben Rhodes contributed to the project in a multitude of ways, always with patience and good cheer, and for that I am most appreciative. Also I want to express my gratitude to Jesse Porter who, while performing his regular duties at PT&P, took on the enormous responsibility for doing the formatting, layout, and design of this book. During the summer, R.K. Agrawal brought his insight and computer expertise to assist in the many planning sessions. Bill McDonald and the staff of the Accounting Department on Long Drive were very helpful during the research phase of the project. Finally, I want to thank all of the people of PT&P for their hospitality and support, and especially the individuals who agreed to be interviewed for this history. Their contributions proved invaluable to the writing of this book, and also will provide a permanent oral record of the history of the company.
In addition, there are several people outside of Piping Technology to whom I am indebted for their efforts on behalf of this project. Suzanne Mascola transcribed all of the oral history interviews in her usual professional and timely manner. Sethuraman Srinivasan, Jr. worked throughout the summer as the project research assistant. He surveyed PT&P’s vast photo collection and organized a catalog from which we selected the illustrations for this history. In addition, he helped assemble background information, developed photo essays, wrote captions, and provided many useful ideas for the book. Finally, I want to express my gratitude to Dr. Joseph A. Pratt, NEH-Cullen Professor of History and Business at the University of Houston. As the project director, he brought his expertise as a business historian and his editorial skills to help guide this study to its completion.
Preface and Acknowledgements to Second Edition
Dr. Durga Agrawal, founder and president of Piping Technology & Products, Inc. (PT&P), contacted me during 2008 to discuss writing an update to the original history of the company that I had completed in 1998. Over the years, I kept track of PT&P and thus was delighted to be asked to write a sequel about this very interesting and very successful Houston firm. As I began my research, I found a company that had grown in size and matured as an organization, but remained true to its mission and corporate ideals.
Several themes carry over from the first edition, including the strong emphasis on quality and testing of PT&P’s products. A major extension in those themes is found in the push for professionalization at the company. Not only did quality control still matter, but the emphasis was on attaining formal industry recognition and certification of the standards that PT&P met or exceeded. The company matured as a business in other areas including its use of computer technology, the development of its website to include features that made it an information resource for the piping industry, and steps to improve in plant safety. Thus, while history necessarily is about change over time, the changes at PT&P since 1998 have been contributing factors to the company’s successful expansion of its product line and production capabilities, and its consequent success in gaining new customers, competing in new areas for business, and in securing the largest projects in the history of the firm. PT&P grew from being a reliable provider of pipe hangers and pipe supports to a “one-stop-shop” for a wide variety of engineered products and services for the piping industry.
This new edition of PT&P’s history builds upon the first book originally published in 1998. The original six chapters have been slightly edited but contain essentially the same information about the first twenty years of the company’s history. The new edition has four additional chapters that examine the growth of PT&P as a business and its expansion into new product lines during its third decade. Chapter seven looks at the impact of PT&P’s acquisition of U. S. Bellows and the use of new technology as a tool for marketing and communicating with customers. Chapter eight explores the company’s entry into enhanced engineering services, opportunities in the merchant power plant arena, and the important acquisition of the Fronek Companies from Shaw Group. Chapter nine focuses on a maturing firm and the opportunities it provides for employees, certification of its quality control programs, and enhancement of plant safety. The final chapter provides an overview of the impact of the company’s growth in the industry and the subsequent opportunities the success of the firm presented to its founder, Durga Agrawal, as a business leader and in community service. The story of this company is a classic story of the American Dream coming to fruition, and it also is an excellent case study of the growth of a successful, small-business, fabricating company through the economic cycles of the late twentieth and early twenty-first centuries.
Once again I am grateful to Dr. Durga Agrawal for his commitment to recording the history of Piping Technology & Products. Randy Bailey, Vice President, was very gracious in offering his time and support to talk about the company and the significance of its expansion over the past ten years. Helen Conol Villaruel, Agrawal’s executive assistant, helped in countless ways by providing documents and other printed information, and in scheduling oral history interviews. Dr. Ben Rhodes, the now retired former vice president, provided his expertise in a careful reading of the manuscript, and for his help I am deeply indebted. I also wish to express my gratitude to the people who made time in their busy schedules to participate in oral history interviews, without which this project could not be completed. Their names appear in the Note on Sources at the end of this book. Suzanne Mascola transcribed the interviews, Aarati Agrawal contributed several ideas for the manuscript, and my long time associate, Kimberly Youngblood, provided research and editing assistance throughout the project. Finally, to all the people of PT&P— my thanks for your gracious hospitality and support for this history project.
Piping Technology & Products, Inc. (PT&P) is one of the leading manufacturers of pipe supports and other piping products in the world. This book is the story of how the Houston-based company grew out of a small engineering consulting firm to take a prominent place in the piping industry. The company’s founder, Durga Agrawal, first came to Texas in 1968. A young college student from the small village of Lakhanpur, in central India, Agrawal had planned to complete his graduate studies in engineering at the University of Houston and then return to India to establish a business. Although he did not know it at the time, his arrival in Houston marked the beginning of a journey that eventually would lead him into the world of manufacturing, not in his native India, but rather in the go-for-broke atmosphere of the energy capital of the world—Houston, Texas.
When Durga Agrawal first established Pipe Technology & Products, Inc. in the summer of 1978, he sought to create a niche for his company in the pipe support industry by providing fast, dependable service for his customers. He accomplished this primarily by developing innovative designs that improved the company’s line of products and made the firm’s production methods more efficient. This enabled Agrawal to reduce the extended lead time—that is the amount of time required for products such as spring hangers to be manufactured and delivered—that had been the rule in the days before PT&P. Agrawal’s innovative approach to the piping industry and his willingness to diversify into new areas of manufacturing enabled his small company to survive and prosper in a highly competitive environment. Later during the mid-1980s, when Houston’s economy crashed with the demise of oil, gas, real estate, and petrochemical industries, PT&P, like other industry-dependent companies, found itself in a struggle for survival. Yet, while many competitors saw their business fail, PT&P not only survived but also thrived during the economic downturn. How then did this upstart business out-maneuver its competitors in a way that enabled the company to survive Houston’s economic “bust” of the 1980s and become one of the leading manufacturers in the piping industry?
Chapter 2: Developing a Business: 1979-81
Innovation and customer service enabled PT&P to carve out a niche in the pipe support industry. The development of the “Big Ton” provides an interesting illustration of this. Andre Hydel of Total Petroleum contacted PT&P and asked for a way to support a large vessel that would be both stable and economical. Ben Tatum and Randy Bailey responded by designing the big ton, essentially a table atop muscle springs. Total Petroleum was so pleased with the design that they gave more business to PT&P and found other uses for the Big Ton.
“Well, I think the story of the bolted design for variable spring hangers is a very significant milestone and so that’s a story that needs to be told. Even after the idea hit [Durga Agrawal], it probably took him a while to implement it. And then, it took him a while to realize that it wasn’t just a quality improvement, it was a way to build a different kind of manufacturing system which had a real competitive edge.” Ben Rhodes, Vice President of Piping Technology & Products, is among the many PT&P officials who believe that Durga Agrawal’s bolted design spring hanger has been one of the most important factors in the company’s overall success. Agrawal’s revolutionary new design substantially improved the quality and durability of the product, but more importantly, his concept of using interchangeable parts and mass production techniques gave PT&P a competitive edge that the company’s rivals found very difficult to overcome. The bolted design spring hanger turned out to be Agrawal’s ace-in-the-hole during company’s formative years. It allowed him to produce this crucial, high-demand product at a much lower cost than his competitors. Consequently, as PT&P became better known to the major engineering and construction companies, Agrawal’s team was able to submit competitive bids and win many of the most lucrative contracts during the late 1970s and early 1980s. These jobs made PT&P a contributor to some of the most prestigious and significant construction projects of the era.
While increasing the flow of business brought a corresponding increase in the company’s revenues, it also brought a wave of growing pains that challenged the resourcefulness of the entire staff. The rapid pace of business rarely left enough time to sit down and work out a growth strategy. PT&P’s strategic growth plan essentially was to keep booking orders and deal with the exigencies individually as they came along.
While they may not have developed a formal growth plan, Agrawal and his team refused to be overwhelmed by the tasks and challenges of a very competitive marketplace. In this way, more by process than by design, PT&P grew into a major supplier of pipe supports and related products. All of this did not just happen, of course, but in meeting the challenges and crises that ultimately face most small businesses, PT&P took advantage of the booming economy to augment its share of the market and in the process, reinvented itself as a viable business organization.
The first crucial step was to create a niche for the company in the piping industry. For PT&P, this meant finding ways to improve the quality of key products and provide faster and better service to customers than the competition. Second, the company had to hire additional personnel, both in the shop and in the front office, qualified people who could organize the various functions of the business and keep the company growing and maturing as a reliable manufacturer of pipe supports and products. Third, PT&P had to purchase equipment to expand its manufacturing capabilities.
An early version of the Bolted Spring Hanger
All of these developmental steps took place more or less simultaneously. One of the first and clearly most significant steps involved the development of a new kind of engineered spring hanger. This product helped PT&P in its quest to carve out a specialized niche and compete effectively with older more established firms. The bolted spring hanger became one of the company’s most important products and a mainstay of the PT&P catalog. As the name suggests, a spring hanger is a device used to suspend piping, to hang it from steel beams in a manufacturing plant, refinery, or other location. Each spring support is individually calibrated to the various pipe loads and movements specified. During the early 1970s, spring hangers were “like gold” to piping engineers, in part because of their vital role in the piping system, but also because they took a painfully long time to manufacture. Orders for spring hangers required a “lead time” of as long as six to eight weeks, because they had to be customized to meet the buyers’ specifications and then individually manufactured. This meant that customers had to place orders weeks ahead of the time they were needed so that the installation of the piping could go ahead on schedule. Delays caused by tardy delivery of spring hangers meant that the piping could not be installed and this often caused entire projects to fall behind schedule.
The manufacturing and assembly processes were difficult and very labor intensive. Frequently, special coil springs had to be ordered to meet specifications that required certain sizes and spring rates. In addition, other materials for the rest of the spring hanger assembly had to be purchased and brought in. To fight corrosion, purchase orders usually specified a hot dip galvanizing treatment for spring hangers. That meant that that the canister or can had to be built, sent out to be galvanized, and then returned to the shop for final assembly. This too was a time consuming and tedious process. To install the coil spring inside the can, the spring had to be compressed in a hydraulic press with a load ranging from 50 to 50,000 pounds. A welder would actually weld the end of the can shut while the spring coil was held compressed. But this process created a new problem. Although it was not apparent during the assembly, by welding the pieces after they had been galvanized, the welder actually burned the galvanizing off, which made it susceptible to corrosion again. Randy Bailey noted that, “When you welded it shut after it was galvanized, it always corroded later. It always rusted at that spot…everybody did it that way.” The welding created another problem that could not be seen by quality control personnel. The coil springs were coated with neoprene to prevent corrosion and the subsequent failure of the spring hanger. The welding process frequently melted or otherwise damaged the thin neoprene coating on the springs inside the canisters.
Chapter 3: Thriving Through Diversification During Houston’s Economic Downturn
“None of the operating companies were mounting new projects,” said Terry McCormick. “Because, you know, the price of oil was going down and they were going through their massive layoffs. Every major company was cutting back.” During the 1970s and early 1980s, business opportunities abounded in Houston and the entire city seemed awash in money. Rising oil prices fueled the boom which stimulated business in all sectors of the city’s economy. Then suddenly, in 1982, it all began to sour. By 1985, the boom had turned to bust, causing many businesses to fail and many people to lose their jobs as those firms that relied upon energy related businesses laid-off employees and closed their doors. The Bayou City suffered through five years of economic contraction with some areas feeling effects more traumatic than during the Great Depression of the 1930s. Although it may have seemed like it at the time, all of Houston did not fold during the economic downturn of 1982–87. Many companies survived the energy recession and some found themselves in better condition by the time the Houston economy began to turn around in 1988. One of those companies was Piping Technology & Products. The company was strong enough to weather the most severe downturn in the recent history of the oil, gas and petrochemical industries without the “downsizing” that many firms endured during those difficult days.
There are a number of reasons for the remarkable survival of Piping Technology during this difficult time. Unlike many Houston firms, PT&P had not mortgaged its future by borrowing heavily to finance expansion or capital improvements. Also, with the large contracts to provide pipe support products for the Texaco refinery in Convent, Louisiana and the giant Saudi Arabia Petrochemical Complex at Al-Jubail, PT&P had two long-term projects to carry the company for a while. Finally, Durga Agrawal, Randy Bailey and Terry McCormick had seen the downturn approaching as early as 1981 and began to search for alternative markets. They saw a need to diversify the company’s customer base and to expand their product line. Consequently, the company continued to book jobs and continued to grow throughout the period of the downturn. By the time that both the local and national economies began to recover somewhat in the late 1980s, PT&P had moved to a larger facility, acquired a new subsidiary, SWECO, and added new manufacturing capabilities while, during the same time, many of their competitors had been forced to close their doors.
Terry McCormick talked about the big economic crash years later. He recalled the drop in oil prices noting, “If you looked at August of 1982, West Texas Intermediates were trading for $39 a barrel. Four years later, in August 1986, they were trading for $9.50 a barrel, and 245,000 people had lost their jobs in Houston in that four year period.” The falling oil prices meant a decline in revenues for the oil companies. Among other things, this delayed plans for new construction and upgrades of existing refineries and other facilities. With little of this type of work being awarded, the big engineering and construction companies began reducing their workforces. McCormick recalled that “Fluor Corporation here went from like 3,900 people to 450 people. Bechtel was flat. Lummus was flat. Brown & Root was flat. Everybody in town was flat. The only thing that wasn’t flat was Fluor [California] and that was by virtue of this big job in Saudi Arabia. The only thing that C.F. Braun was doing was their portion of the job in Saudi Arabia. So, no new jobs were being awarded and it was a very, very critical period of time.”
PT&P continued to pursue work but in reality, there was not much work to pursue. McCormick utilized this slow period to bolster his contacts and keep in touch with the people and the companies that PT&P had done business with previously. He dropped in at the engineering companies to chat with the piping and stress engineers who still remained. The slowdown provided “a wonderful opportunity to call on those people…they were very receptive to meeting you.” All of this generated good will and would pave the way for PT&P to be assured of receiving inquiries once the economy picked up and the engineering and construction companies began getting new projects.
One of PT&P’s first sales agent training sessions.
In addition to shoring up PT&P’s contacts with the engineering and construction companies, McCormick began putting together a network of sales agents to represent PT&P in other parts of the country. Usually these agents were independent businessmen, manufacturer’s agents who represented three or more companies. Whenever McCormick traveled, he contacted the local agents and they would make calls together, visiting potential clients to make PT&P known to them. “So, that gave us an opportunity to call on the engineering companies, those that we were doing business with and those we hoped to do business with, and it gave us an opportunity as well to call on the major operating companies. Our [agents] have played an important part in our growth over the years.” Eventually, PT&P established a worldwide network of manufacturer’s agents to represent the firm.
During the early 1980s, PT&P had begun looking for ways to diversify and expand into the non-energy-dependent sector of the economy. Durga Agrawal briefly considered the idea of getting into the computer business as an after-market reseller. Although he did not aggressively pursue that option, diversification clearly was on his mind. As he recalled later.
“We started seeing the downturn coming a year before it happened,
or a year and a half before it happened. I knew that the petrochemical
business would be down the next two or three years. That’s when we
started planning to diversify and get into other areas like building
expansion joints for the highways, doing anchor bolts, slide plates, all
kinds of miscellaneous steel fabrication, including getting into wastewater
treatment plants. So, we started focusing on those smaller, labor-intensive
jobs. And because of that, we kept everybody busy. We didn’t have to lay off
anybody. We kept on expanding. We kept on hiring more and buying more
equipment also.“
PT&P was willing to try almost anything to keep the business going and to keep its employees working. As a result, the company not only survived, but also the expanding capabilities actually helped propel the firm into a new growth cycle. Randy Bailey described the period noting that, “Every year, we almost doubled in size, because we looked for diversification or options. In fact, that is when they passed the Clean Water Act and companies started doing a lot of wastewater treatment facilities. We branched out and we started working on sewer treatment plants. And so, we would go wherever they needed pipe, wherever they had pipe supports.” The growing use of personal computers during the 1980s led to a corresponding demand for computer paper, which led to a boom in the pulp and paper industry. “They had a big push in the paper mills because they had so much [demand for] computer paper,” said Bailey. “So, all the paper mills had to expand to keep up with the need and that’s when we supplied all the hangers to the paper mills.