Newberry Steel Tanks & Equipment No Plans To Slow Down

As originally posted on Business View Magazine

Business is only increasing as industry demands rise

As fuel prices continue to escalate and an inflationary climate takes its grip, there appears to be no slowing of the revolutionary business model that has made Newberry Tanks & Equipment one of the country’s foremost fabricators of steel storage tanks for the petroleum and gas industry. Business is booming and the company remains a market leader in providing products and services to equipment installers, oil and fuel distributors, the lube oil market as well as the agricultural sector.

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The storied firm was founded by Mr. James “Jimmy” Newberry in 1927 when he began peddling pumps, hoses, and tanks in the Mid-South. In 1951, he moved the company to its present location in West Memphis, Arkansas, and began fabricating steel tanks. Newberry Tanks & Equipment continues to win industry-wide awards for manufacturing excellence, continued growth and innovation, and first-class customer service.

In 1951, Jimmy Newberry also became a founding member of the Petroleum Equipment Institute (PEI) a trade association whose 1,600-plus members in all 50 states and more than 80 countries manufacture, distribute, and service petroleum marketers and liquid handling equipment. These products are used in service stations, terminals, bulk plants, fuel, oil, and gasoline delivery, and similar petroleum marketing operations.

Upon Newberry’s retirement, his company was acquired by Hamilton Tanks of Columbus, Ohio, which continued to grow its reputation for providing quality products and services. In early 2011, it transitioned to its third ownership group, headed by former Company President, Chris Long. In 2012, Faith Tank became a part of Newberry Tanks & Equipment, bringing rectangular lube tanks and lube dispensing and oil recycling recovery systems to its catalog of storage tanks and equipment services.

Over the years, Newberry Tanks has worked with organizations such as the PEI, the STI (Steel Tank Institute), the SPFA (Steel Plate Fabricators Association), the NFPA (National Fire Protection Association), the EPA (Environmental Protection Agency), and Underwriters Laboratories. The company has been instrumental in developing many of the products and standards serving the industry today.

Matt Kohnke, President & CEO

For the past two-and-a-half years, Newberry Tanks has been led by Matt Kohnke, its current President, and Chief Operating Officer. He explains how the company’s entrepreneurial operating system gives its 68 employees control over operations and production. “It’s an approach that starts at the top and works its way through the organization.” he relays. “Folks in our production team are responsible for the manufacture of the tank from the very beginning until the time it’s ready to be painted.Our production welders are on a pay system which incentivises them to make as many tanks as possible without sacrificing quality. They work in individual work cells that are self-directed. And that’s how they earn their money.”

Kohnke maintains that the issue of quality is just as essential to the company’s modus operandi as its entrepreneurial approach to production. “There’s a high commitment within the organization to quality that can’t be sacrificed,” he states, “Any time we have a quality issue, the process owner drives down to the root cause through the “Five Whys” process, and identifies corrective actions which are communicated throughout the organization. We want to make sure everybody is aware of what happened and what we’ve done so that it doesn’t happen again.
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James Fischer, Newberry’s VP of Sales since 2018, elaborates. “The organization is 100% geared to what we call 100% perfect order. That starts from the first conversations at the proposal stage, all the way through to the product’s arrival to the customer. That’s the commitment from every department in the organization – sales, production finishing.

Perfect order has seen the company’s orders and revenue rise substantially over the last several years — even through the two-year COVID-19 pandemic. “Our revenue in 2022 will be 250% higher than it was in 2018,” Fischer reports. “Back in 2019, we set a 10-year growth target and will likely achieve that in half of the time.”

Lately, the company has been busy expanding both of its operations- its main facility in West Memphis that manufactures cylindrical, or round, tanks for petroleum storage, and a smaller facility in Memphis, Tennessee, right across the Mississippi River which primarily manufactures rectangular tanks meant for lube storage and utilization.

“In 2021, we realized that our facility in Memphis for rectangular tanks was not large enough for the volume of business that we had and it certainly wasn’t going to handle any future growth in that business,” Kohnke relates.

“We bought an existing facility not too far from it that effectively doubled the amount of manufacturing space. Today, that facility is set up for an efficient flow of material from the time that the raw steel comes in, to the time that it’s put into production in welding cells, to the time that it makes its way onto a conveyor and flows into a brand new, state-of-the-art paint booth. So, that’s a significant process improvement in that facility. It also allows us to expand to meet our significant growth targets in the future.”

“From a people perspective, when we left our old Channel Ave location in Memphis, we had about seven employees working on the floor,” Kohnke adds. “Today we’re up to 12 and by the beginning of the first quarter of 2023, we should have 16 or 17 employees working on the floor, plus the corresponding support resources including engineering to production management.”

“We’re excited about the growth opportunities in West Memphis,” he continues. “A property became available adjacent to our factory shop, which we bought, and we’re in the process of readying that piece of land and building to move our maintenance department. Then we’ll take the existing space that we’ve used for maintenance and improve our paint capabilities for small tanks to provide a more consistent and quality finish. These projects are expected to be completed in 2023.

Newberry Tanks has always benefited from its proximity to Greater Memphis’ transportation links, including air, rail, barge, and trucking, which allow the company to get product out to its customers quickly and efficiently. The company is also centered in a large supply base, particularly for steel and the related accessories needed to provide turnkey packages- which include gauges, vents, pumps, hoses, etc. In addition, over the last several years, the steel industry, itself, has grown and flourished in northeast Arkansas, giving Newberry an even greater competitive advantage of being close to its basic raw material suppliers.

Newberry Tanks & Equipment success, Fischer points out, comes mainly from its commitment to customer satisfaction and the continuous process improvements that have allowed it to shatter the industry’s lead-time standards.

“Historically, the trend with tank manufacturers has been when somebody needs a tank, you get in line and wait-usually a 8, 10, 16, or 24-week lead time,” Fischer explains. “We’ve changed that. We’ll understand the customer’s need for the next full year, and we have a stocking program where, if they need X number of tanks per month or quarter, we will pre-manufacture those in advance and have them on our site so when they call us, we’ll have those tanks ready to be shipped, immediately. For those customers, it’s a tremendous advantage when they go to market.”

Also, Fischer reports that most tank manufacturers don’t keep an inventory of standard-size tanks for customers that can’t forecast their need. “Whether it’s a small standard tank or a 30,000-gallon tank, they manufacture those to order,” he says. “Essentially, that customer is going to have to get in line when that tank’s ready, versus us. We keep a large number of our standard sizes up to two or three thousand gallons on our two sites, ready to be painted and shipped, which takes that lead time down from eight weeks to two.”

“We’re not planning on slowing down,” says Kohnke in conclusion. “We’re going to continue to make sure we’re servicing our customers well. We don’t want to give them a reason to go somewhere else. If we provide a quality product, and if we can make sure our pricing is competitive, and continue to have some of the shortest lead times in the industry, we’re excited about what this business can be.”