Water Well Journal Business Roundtable

Manufacturers weigh in on business sales and share what trends they’re seeing in today’s water well industry.

By Mike Price

It’s interesting to note the variety of economic indicators that help explain how the water well industry is faring on the business front.

From the housing market to unemployment figures to weather conditions, all play a role in shaping the economic reality for those in the industry—water well system professionals and manufacturers and suppliers. Then there is the stock market that bears down as well.

As we enter the final business quarter of 2019, Water Well Journal checks in with manufacturers from the pump, motor, and drilling markets to hear directly from them how their respective companies have done and what they think the future might hold.

Water Well Journal: How has business been in 2019 and what new trends in the water well market have you seen?
Albert Pouria: Our business in 2019 has been running slightly behind the robust numbers we experienced in 2018. We attribute a lot of the slowness to the agricultural market and a cool, wet start to the year across most of the United States. Fortunately, Sun-Star Electric is a diversified company and is able to overcome any occasional slowness in one particular market sector.

Andy Sayegh: The U.S. groundwater season got off to a slow start in early 2019 due to extremely cold weather in the Midwest and heavy rainfall throughout many parts of the country. The start of groundwater season was delayed, but activity picked up significantly in the spring. We have consistently heard from contractors that business is good, it’s just been slowed down because of weather.

We’re seeing a continued trend toward more advanced technology in groundwater. The use of variable speed drives for constant pressure pumping continues to grow, as does solar pumping, and pumping systems with increased connectivity. E-commerce is becoming a larger force in the market. We are actively investing in a strategy that protects our sales channels from being undercut by online re-sellers.

Ray Roussy: The use of sonic drilling technology continues to grow on a regular basis in other applications but hasn’t penetrated as much as it could in the water well market. Having said that, I would expect to see it become a major player in the coming years.

For example, two of our machines were recently sent to Sri Lanka to conduct an assessment of underground water resources by drilling throughout the country. The project was at the request of the Sri Lanka Ministry of Irrigation and Water Resources Management, and although some drillers may not be aware of it, sonic drilling is a perfect choice for this task.

WWJ: How has the overall economy affected your business strategy?
Andy: While the U.S. economy has been strong since last year, some economists predict U.S. manufacturing to slow down in 2020 and 2021. For Grundfos, short-term economic factors have some impact on how we forecast sales and manage our supply chain.

However, these factors do not impact our big-picture strategy because we’ve made a long-term commitment to serving the U.S. groundwater market. Being a privately held company allows us to make decisions that we believe will pay off in the long run, not just this quarter.

Albert: Stock market up. Stock market down. No matter as\ Sun-Star Electric continues to invest in its infrastructure.

We have recently upgraded our ERP (enterprise resource planning) system, purchased new vehicles and new machines, installed new hoists, and commissioned new test equipment with more investment to come—all to continuously improve quality and increase efficiencies to enable us to better serve our clients.

Ray: No change. We continue to ride out the ups and downs, just like everyone else. It’s business as usual.

WWJ: What can you tell us about the newest enhancements to your product line for the water well industry?
Albert: Hitachi’s field-changeable voltage plug allows our stocking distributors to carry less inventory and convert a dual voltage Hitachi submersible motor from 230V to 460V or vice versa with ease.

Though not necessarily an enhancement, we would note that we are seeing significantly increased demand for special construction submersible motors (stainless steel in particular) and non-standard voltages.

Andy: With the release of the Grundfos Renewable Solar Inverter (RSI), we have expanded our solar pumping offering up to 50 hp. The RSI converts DC power output from solar panels into AC power for use by traditional pump and motor assemblies.

Our new 6-inch single phase motor helps complete our 6-inch submersible motor offering.

We’re also working on some exciting new enhancements to the Grundfos Remote Management platform, our internet-based system for monitoring and managing pump installations.

Ray: We don’t have any new enhancements for the water well industry right now, but there are many ideas I’d like to pursue.

WWJ: Ray, according to your company’s website, sonic drilling is ideal for geothermal installations because of its overall efficiency on the jobsite. From your vantage point, what is the state of the geothermal market in the United States and Canada?
Ray: Generally, in recent years the geothermal market has taken a back seat due to lower natural gas costs, but during that time, the world has also become far more aware of greenhouse gas emissions, climate change, and other factors that, once again, make geothermal appealing.

We continue to see various large projects choose geothermal including luxury homes, universities, and airports. And, in all honesty, sonic drilling is the greatest drilling method ever devised for geothermal installations. There is simply no other technology that can do what we can do as fast as we can do it.

WWJ: Since we last spoke in 2013, what have been the most promising enhancements of sonic drilling technology?
Ray: Without question, the most promising enhancement to sonic drilling technology are rod handling systems since injuries to drillers are greatly reduced while projects become more efficient. In the future, we believe robotics and artificial intelligence will help to take away the burden of heavy lifting and eliminate repetitive activities for drillers.

WWJ: How much has energy efficiency driven your advancements over the years in your pump motor designs?
Albert: Hitachi submersible motors remain exempt from DOE efficiency standards, but our customers can rest assure that these same Hitachi submersible motors continue to lead the industry in efficiency ratings.

Andy: Energy efficiency is the single biggest driver whenever we develop a new product. Since Grundfos is a global manufacturer with a considerable presence on six continents, we strive to develop products that will meet or exceed all the highest efficiency standards around the world.

We estimate that pumps account for 10 percent of the world’s total electrical energy consumption, and that up to 90 percent of pumps are inefficient. Increasing the percentage of energy efficient products we sell is a key part of our corporate sustainability strategy.

Grundfos was the first company to produce a permanent magnet motor for water well applications 20 years ago. Pioneering highly efficient permanent magnet motor technology has allowed us to make solar-powered pumping systems much more viable than it is with traditional inverter technology. Our solar pumping products have enabled us to deliver clean drinking water to tens of millions of people who would otherwise have no access.

WWJ: What are you hearing most from pump installers? How are you helping them solve any challenges they may have?
Andy: The No. 1 challenge we hear installers talk about is staffing. Recruiting and retaining talent has become even more challenging with unemployment numbers at their lowest in nearly 50 years.

To help our installers overcome this challenge, we’ve developed a broad offering of free training content through the Grundfos Technical Institute. GTI offers face-to-face training courses, virtual e-learning courses, online seminars, and training video content. We’ve also hired technical sales managers whose primary roles are to support our contractors in the field with on-site technical assistance, training, and troubleshooting.

In addition to training and support, we develop reliable products that are quick and easy to install. This allows our installers to complete jobs more efficiently, leaving them with more time to pursue new business.

Another big challenge to pump installers in the United States is our dated power grid. The Grundfos MP204 will protect a submersible motor by continuously monitoring voltage, current, temperature, power factor, power consumption, and phase sequencing. The Grundfos SQ and SQE 3-inch submersible pumps can handle a wider voltage range (150-280V) than traditional submersible motors and have several built-in protections which reduce the likelihood of power-related failures and nuisance return visits to installation sites.

Albert: A few of our customers have been tempted to give off-brand submersible motors a try in their applications in an effort to save a few dollars, but then they come back to us and let us know that the durability and trusted reliability of the Hitachi submersible motor is a tremendous value overall.

The trend toward the use of variable frequency drives in submersible motor applications continues to trend upward. Due to motor requirements, Sun-Star Electric has been getting more and more involved in the end users’ motor selection as we help end users understand that submersible motors do indeed have special requirements in order to work properly with a VFD.

WWJ: Clearly, customer feedback is vital for research and development of any new product. How do you elicit feedback from customers or potential customers?
Albert: We strive to stay close to our customers. Customer-sponsored training and seminars, in-person visits, phone and email, NGWA and local trade shows are all employed strategies.

Though Sun-Star Electric primarily supplies Hitachi submersible motors at the OEM level, distributors, dealers, and end users know who we are and can trust that service and support is simply a phone call away.

Ray: We prefer direct discussions with customers to gain their thoughts and feedback. As always, we continue to be impressed by the many ways our customers utilize their sonic rigs and how far they push the technology. There is nothing that can replace real-world usage as a test bed.

We now have more than 35-plus years of field testing all around the world, which is a huge advantage for customers when deciding to buy their first sonic rig. Additionally, we have numerous patents on the development and use of sonic drilling technology, including ones that cover geothermal installations.

Andy: At Grundfos, we strive to stay close to our customers and collect their feedback in a variety of ways. This is why we participate in hundreds of contractor events every year. Anytime we conduct market research, the process begins with the contractor. We conduct surveys by phone, mail, and face-to-face voice of the customer meetings.

Whenever we begin to develop a new product, we conduct extensive field testing at early stages in the design process so that our installers’ input can influence the design. It’s critical that the products we develop not only deliver functionality, but also a convenient and intuitive user experience.

Our Groundwater Technical Hotline receives calls and gathers input daily from water well contractors. Our field sales staff are also in perpetual dialogue with installers on jobsites, at distributor locations, and at industry events.

Mike Price is the senior editor of Water Well Journal. In addition to his WWJ responsibilities, Price contributes to the Association’s scientific publications. He can be reached at mprice@ngwa.org, or at (614) 898-7791,
ext. 1541.