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Belgrade manufacturer, Smith Equipment making it BIG

The biggest obstacle Smith Equipment faces isn’t finding customers or retaining employees. Nor is it developing new ideas.

By KAYLEY MENDENHALL Chronicle Staff Writer

It’s not even the physical feat of manufacturing gigantic trailers for the open-pit mining industry.

It’s shipping the 120- to 550-ton TowHaul trailers once they are finished.

"Shipping is our biggest obstacle," said Kim Wild, president and general manager.

The "gooseneck" trailer hitches used to connect a tow truck to a trailer are about 16-feet tall. When put upright on a flatbed truck, they won’t fit under interstate overpasses, Wild said.

"We have to lay them flat and get extra-wide-load permits," she said. "We have to have police escorts all the way to the port of Houston."

Luckily the costs of shipping — more than $100,000 in some cases — are picked up by TowHaul’s customers.

And that is added on to the $250,000 to $400,000 pricetag of an average 200-ton trailer or $400,000 to $600,000 for a 400-ton trailer.

Big mining operations in Africa, Indonesia and Australia are willing to make the investment because over time, Wild said, TowHaul saves them money.

"It increases their production and saves them on maintenance," she said.

Without a trailer like those made by TowHaul, the only way to move some of the heavy-duty mining machines is to "walk" them, or basically drive them, from place to place. But each machine can only travel one or two miles an hour and undercarriages often have to be rebuilt after about every 30 miles, Wild said.

"Our trailers pay for themselves in one to two years," she said.

They are built to last at least seven to 10 years, but Wild said she expects they’ll actually last for 20 years or more.

However, since the company has only been in operation since 1990 and has had patents secured only since 1994, she said there hasn’t been time yet to find out how long the trailers will keep on truckin’.

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Smith Equipment

Contact Info: 406-388-3424

Address:

340 Andrea Dr

Belgrade, Montana

59714-8919

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Giant rigs of future

TowHaul started out with only a handful of employees, but has grown steadily since it added a marketing department in 1997.

The company now employs 25 and pays its manufacturing workers an average of $14 to $20 an hour, depending on experience and level of responsibility.

They spend their days in a tin-sided, tan warehouse in an industrial part of Belgrade. The building doesn’t look out of the ordinary from the outside, except for gigantic garage doors on one end to allow for three-story-high equipment inside.

Nearly every piece of machinery used in the manufacturing process is made by TowHaul employees to be big enough to get the job done.

"We only have four or five competitors in the world," Wild said. "There’s no one in the 450-ton size."

In the past few years, Wild said, the average trailer sold has shifted from the 250-ton trailers to the 450-ton size.

As mining equipment and machinery gets bigger, the trailers have to grow as well.

So TowHaul founder Frank Smith, who is now retired, has an idea in the works with a patent pending for a 1,500-ton trailer. It would cost $4 to $5 million and take at least a year to build.

Wild expects to start receiving orders for the giant rigs in the next year or two.

"It would have to be assembled on site," she said. "It would take 15 truckloads" to ship.

Montana exporter of 2002

While transportation costs and logistics are a constant concern, TowHaul is successful, in part, because a majority of its income comes from exports.

"A company that is exporting is approximately 10 percent more profitable than a company that isn’t," said Fraser McLeay, senior manager for the Montana World Trade Center in Missoula. "They pay their workers approximately 15 percent more."

McLeay’s nonprofit group represented five mining industry businesses at a trade show in Australia in September. TowHaul was one of those companies, and McLeay said just having pictures of the huge trailers posted was enough to draw prospective customers to the booth to learn more about TowHaul and, as a result, the other companies.

"They can take something that weighs hundreds of tons, ship it across America and the world and still sell it with the cost of shipping. It’s amazing," McLeay said. "It builds brand awareness in terms of the Montana name."

If TowHaul wasn’t set up to export its products, Wild said, the company would have probably lost jobs like many others in the manufacturing sector have in recent years due to the national economic downturn.

But as it is, TowHaul has expanded and even won the title of 2002 Montana Exporter of the Year by Gov. Judy Martz for making a "significant contribution" to the state economy.

McLeay likened the infusion of international dollars to tourists spending money in the state. It’s money that wouldn’t be here otherwise, he said, and Wild agreed.

"Next year a significant amount of our orders will come from South America," she said. "It’s important for us to have a global presence. If we were counting on North America, we wouldn’t be doing very well."

The trip to Australia will probably bring in a half-dozen orders, although Wild said it usually takes two or three years to make a final sale. She also visited Chile in June to see the equipment working on the ground at a mine.

"It’s amazing to see it operating," she said. "They just keep coming out with bigger and bigger equipment, but I don’t know how much bigger it can get."

http://bozemandailychronicle.com/articles/2003/11/02/news/towhaulbzbigs.txt

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