Hesston firm Excel Industries making great strides in global expansion

In the small town of Hesston, one not-so-small company is making a global name for itself.

Excel Industries, manufacturer of Hustler and Big Dog mowing equipment, has been headquartered in Hesston since the early 1960s, but not until the past decade has the company significantly expanded its global footprint.

As a sign of the company’s growth, it was awarded the Governor’s Exporter of the Year award last month from the Kansas Department of Commerce.

The company’s global sales team, led by Chad Lane, Jonathan Thyng and Keith Skidmore, has helped the company increase foreign sales from $2.6 million in 2004 to $21 million last fiscal year. The global expansion has also helped increase the company’s total revenue from $164 million in fiscal 2012 to $210 million so far in fiscal 2013, which ends on July 31.

Excel had its first export in 1974, but it wasn’t until 2004 that the company decided to place a strong emphasis on foreign markets.

Lane, director of global strategy, has been involved with the company since he was a teenager. It was his grandfather who helped found Excel Industries in 1961. Lane said that, in 2004, Excel developed a strategic growth plan to develop sales overseas. The goal was to have 10 percent of the company’s total sales come from foreign markets – a goal reached in 2012 when sales reached 12.4 percent.

Lane said the company doesn’t use manufacturing representatives when determining what foreign markets to enter. Instead, company officials go themselves.

“One of my favorite sayings is, ‘You never know unless you go,’” Lane said. “There’s no way you can build a global business without traveling.”

Excel has put a lot of effort into its global expansion and now has a presence in more than 30 countries. Australia is Excel’s No. 1 export market, with neighboring New Zealand also in the top five. Countries to the south help maintain the manufacturing demand, while the northern hemisphere goes through winter.

Skidmore explained that the company uses a two-step distribution model: It sells mowers to a distributor in the country, which then ships to dealers. He said the key is understanding the country’s economy, what kind of grass it has and how people maintain it. Europe tends to want to catch the grass instead of mulching it, for example, while in the U.S., more people tend to mulch, he said.

“We have to find a distributor who won’t hurt the brand image,” Skidmore said. “We look for areas that are underserved, or success isn’t great, and figure out how we can come up with a new mower or something.”

Excel has expanded its foreign sales an average of 37 percent a year since 2004. In comparison, its U.S. sales have grown an average of 8 percent annually in the same period – still a respectable number, Lane said.

Lane credited that growth to the company’s culture of innovation and its motto, “Doing the right thing.”

Excel uses a profit-sharing program with its employees, paying bonuses to workers who have helped the company succeed. Lane said it also donates 10 percent of its pre-tax profits to charity.

John Carder, city administrator of Hesston, said Excel has benefited the community in multiple ways, including creating jobs not directly related to the company.

“Excel is a local phenomena,” Carder said. “It was created by local entrepreneurs and has always been a part of the community.”

Excel also manages and maintains the city’s public golf course. Carder said a company such as Excel allows the city “to have a superior infrastructure, lower taxes and lower utility rates.”

Innovation, an aspect the company has prided itself on since its start, has helped it survive many economic ups and downs. It lays claim to the title of having created the first “zero-turn” mower, a mower that can turn a circle in the same spot.

The zero-turn mower was the company’s first mower and helped it succeed in the beginning. However, maintaining that innovation over decades can prove hard for companies.

“We’re never going to be satisfied with what industry standards are today,” Lane said. “We’re always looking for a way to do things better.”

Excel currently employs about 500, the most employees it’s ever had.

And the plan is to keep growing. Officials know that expansion comes with risks. Excel plans to be a $500 million company by 2018. Right now it is about $215 million.

“Anytime you make a large expansion in your company, you’re taking somewhat of a leap of faith,” Lane said. “You see the growth that you think is going to happen and you have to plan for it, but at the same time, it hasn’t happened.”

Thyng said one challenge of expansion is keeping the same level of customer service.

“Our after-sales support is increasing with more pressure because more of our products are out there,” he said.

Maintaining the company’s core values while expanding is a priority for Excel’s leadership.

“Part of it goes back to our culture and being humble,” Lane said. “We get excited about growth, but we never let that go to our head.

“We also understand that it can quickly get out of control unless you’re making the right investments and hiring the right people to keep pace.”