Nelson Sanchez took the helm at Grand Rapids-area industrial power systems manufacturer RoMan Manufacturing Inc. this month as the first non-family president in the company’s 42-year history.
Sanchez has served in executive roles with the company since 2013 and takes over during an “unprecedented” organic growth spurt for RoMan, driven primarily by tapping new markets for its products.
The company had a record year for revenues in 2022 and currently has 30 openings that would grow its staff to about 210 employees. The company’s expansion plans also include a new $2.5 million, 27,000-square-foot building at its existing campus in Wyoming.
While mergers and acquisitions aren’t a primary focus, Sanchez said RoMan — through a subsidiary — has successfully onboarded the former Grand Power Systems Inc., whose assets it acquired last year for $2 million in a court-approved sale.
Sanchez began as president on Jan. 1, succeeding CEO Robert Roth, who plans to transition into retirement over the next year. Sanchez recently spoke with MiBiz about his priorities for RoMan and his growth strategies.
In your 10 years at RoMan, how have you seen the company grow, evolve or change?
The company was nominally, from a revenue standpoint, about a $22 million company then. We were primarily focused on the resistance welding industry, which comprises automotive and industrial equipment. We were about 90 percent resistance welding. Before I started and after the 2007-’08 automotive crash, the owners identified a need to diversify the business. We had a few markets identified that we were working on. I came on as CFO and came from public accounting and financial leadership positions, and I very quickly took on a sales and marketing leadership role and started helping us codify some business plans to diversify the organization. We have successfully diversified, and now resistance welding is about 50 percent of our revenue. We ended (2022) just north of $45 million in revenue, which was a record year for us. We’re on a trajectory to grow another 60-plus percent this year and have a three-year plan that will take us north of $100 million.
What do you see as growth opportunities, either organically or through M&A?
In the 10 years I’ve been here, we divested ourselves of some of those things that were distractions and not part of our core. Then we’ve expanded our core by bringing it to new markets and new market applications. Our goal or vision is to be the global brand of choice for industrial power conversion solutions. For a long time, we were pretty much a transformer manufacturer, but we knew there were ways to pair that up with other things and bring more value. One thing we started identifying was integrated power systems — not just doing transformers, but putting transformers in cabinets and other products around it to create a system. That’s where a big chunk of our growth is happening now. We’ve also pushed into the glass and furnace markets. While those markets need transformers, there’s also an opportunity to sell power systems to them. Is there something in the future (for acquisitions)? We’ve got to keep all options open.
What are some of your first priorities since taking over as president?
Managing this unprecedented growth. In 2022, revenues were up in excess of 50 percent over the prior year. This year, they’re going to be 60 percent-plus on top of that. So there’s this huge growth in the midst of this chaos we’re in with the supply chain and all of that.
Are you experiencing the same labor challenges as others in the industry?
Oh yeah. On-time delivery performance this past year has been challenged not just because of the supply chain but also labor constraints. I’ve got 30 positions I’m trying to fill. In December, we started an alternative shift that’s not a traditional second shift and we’re working on staffing that up now. In a tight labor market, I think we have a really excellent culture and benefits that I think is a good attraction to people. Hiring for culture is critical for us and our success.
Labor is a huge concern, so much so that we’ve started our own in-house apprenticeship program that’s launching this year, and we’re doing a lot of upskill training for our workforce.
What challenges or opportunities come with being the first non-family-member president?
The opportunities are no different than anywhere else. You’re in growth mode and you’ve got an opportunity to really do some cool things. We have a great culture. I have to basically not screw it up. That’s a challenge, and it’s an opportunity. Being here 10 years and knowing the family members and their goals, culture and vision helps as opposed to coming in from the outside not knowing that.
How has the acquisition of Grand Power Systems gone over the past year as far as hitting revenue targets set out at the time of the purchase?
That acquisition has gone very well; they’re enjoying some pretty good success. They’ve certainly exceeded revenue expectations for year one, and we see that trajectory only growing. Strategically, we’ve been able to leverage the macro product offerings through some of our growth in our new markets. (Grand Power Systems) does air cooling, where (RoMan) does water. We’ve been able to leverage that and expand our product offerings and move into this space quicker. Some of this growth we’re seeing is a direct result of that strategy.