PM Profile: Lochinvar Stays Strong On Product Innovation
Plumbing & Mechanical in late July interviewed brothers Bill, Tom and Jeff Vallett, who are the third-generation owners of Lochinvar Corp. Their grandfather, Walter Vallett Sr., founded the company in Detroit, Mich. In 1969, Bill Vallett Sr. (2nd generation) moved the company to Nashville, Tenn., and began the development of high-efficiency water heaters, boilers and pool heaters.
Lochinvar’s world headquarters occupies 385,000 square feet in Lebanon, Tenn., and the company employs 400 people, 325 of whom work in the main facility.
PM: How can the hydronics industry take advantage of building owners’ interest in energy efficiency?
BV: The biggest opportunity is to have the industry sell on payback. The industry needs to provide building owners more data on return on investment upgrades. In many cases, building owners can see ROI in the range of three to five years.
PM: What can the hydronics industry do to raise its profile among consumers?
BV: The hydronics industry began an organization four years ago called the Hydronics Industry Alliance. I’m passionate about that. The mission of this organization is to educate consumers, contractors, builders and architects on the comfort and benefit of installing hydronic systems for home heating. We developed a Web site [www.myhomeheating.com] with specific tabs for homeowners, installers, builders and engineers. We also developed the Consumer Guide to Hydronic Home Heating. HIA now is looking to grow our awareness campaign by partnering with the Radiant Panel Association.
PM: Where do you see the greatest areas of growth for the hydronics industry and for Lochinvar?
BV: Rising energy costs have elevated consumers’ awareness level so there’s a groundswell of desire for residential condensing boilers. People have become quite savvy. They understand the value of sophisticated boiler technology and the benefits that energy efficiency offers to the operating expenditures for their homes.
JV: We’ve used “high efficiency” in our company tagline since the mid-1980s when even our ad agency questioned it. Lochinvar is growing despite the economy. Our growth comes from introducing new products and gaining market share.
PM: Why did Lochinvar decide to enter the solar thermal market?
BV: We recognize the need to develop a renewable energy strategy for our company. Commercial solar thermal represents the greatest opportunity to capitalize on this sector by offering our high-efficiency water-heating and hydronic-heating systems integrated with supplemental solar energy. We feel supplemental solar is the way to go because pure solar has too long of a payback.
JV: Our partnership with Austrian-based TiSUN GmbH will allow us to have expertise in solar applications to assist engineers with the design of their efficient space-heating and water-heating systems. Our focus is on commercial applications because there’s so much attention now on residential.
PM: What other changes in technology, materials, production or delivery can contractors look forward to from Lochinvar?
TV: We have a full pipeline of development projects that will allow Lochinvar to continue to have the latest technologies in heat transfer and integrated controls. We also continue to refine our production processes with lean manufacturing techniques to build quality products in the most efficient manner possible.
BV: Product development is our life. The ROI on new product development is tremendous. We introduced four new products this year and plan three major product introductions in 2011, two commercial and one residential. We’ll continue to invest in research and development. If we cut it now, that will hurt us in 10 years.
PM: Is Lochinvar seeing signs of an economic recovery and, if so, in what market segments?
JV: Yes, we’ve seen increased activity in 2010, much of it related to federal stimulus money. Markets with higher activity include public housing, military bases, schools, churches and various government retrofit projects. The classic home building and commercial construction markets, however, are far from being adequate enough to classify as a recovery. People are still scared and worried that we’re borrowing from the future.
TV: Banks aren’t providing money to many projects. Until the banks come back, we’re not going to see a true economic recovery.
PM: In what new ways is Lochinvar connecting with plumbing and heating contractors?
JV: We’ve done Webinars and focus groups on our new controls. For installing contractors, we’ve developed our VIP Contractor Program, which is unique. Not only do contractors earn rewards for various levels of purchases, they also submit photos of their installations for our Product Showcase Contest, offer product enhancement suggestions to us and compete for the Nashville Experience. This is a factory trip to Lochinvar to meet with the executive team, tour the factory floor and mix in some fun with their hard work.
We also recently awarded the top installing SHIELD Commercial Condensing Water Heater installers with rewards for their efforts marketing our products and presented the top installer with a Power-Mate Stair Climbing Hand Truck.
PM: What do you see as Lochinvar’s greatest accomplishment or most distinguishing feature?
BV: Lochinvar’s greatest accomplishment is the fact that we’re a sales-and-marketing-based company that has committed to innovation and new product development for 25 years. Our most distinguishing feature is our people. We have a great team of people who buy into the company’s success. We continue to train and educate them to ensure that all employees can be effective in their responsibilities.
PM: If you had one message to give to plumbing and heating contractors, what would it be?
JV: Now is the time for contractors to invest in their future by spending time learning and training on the new products hitting the market. Consumers and end users are demanding these sophisticated products. Plumbing and heating contractors need to stay one step ahead of their customers if they expect to impress them and remain their providers for equipment and service. The world is changing quickly. The sophistication level of boilers, controls and systems is changing almost daily. Those who are willing to change will win.