SALFORD GROUP INC.
Tucked away in a peaceful corner of Southwestern Ontario, a manufacturing giant is rising. In the eponymous Salford, Ontario, just southeast of Ingersoll, wheat fields sway gently in the breeze, cows meander across green pastures, and the population totals a prodigious 177. Meanwhile, Salford Group Inc. (Salford) is quietly pursuing an agenda of multi-million dollar acquisitions and aggressive global growth.
Salford manufactures a full line of tillage and seeding equipment, as well as fertilizer applicators. Products include the Salford BBI fertilizer and litter spreaders, Salford Valmar granular applicators, and Salford’s well-known, cutting-edge Residue Tillage Specialist line. The company sells its products through dealers and distributors in North America and internationally.
Salford’s founder, Jake Rozendaal, was an engineer from the Low Countries with a farming background. Starting with a dealership and welding shop in 1978, Rozendaal developed a passion for making his own farm machinery. Some local farmers still use his original machines—a testament to the equipment’s durability and efficiency.
Geof Gray, Salford’s current chief executive officer (CEO), also grew up on a farm. A mechanical engineer and Ivey MBA by training, Gray’s heart always lay in manufacturing. When the opportunity arose in 2001, he was glad to assume the helm at Salford, and allow Rozendaal to enjoy his well-earned retirement.
Gray has led Salford through impressive growth in little over a decade. The firm now has over 450 dealers located in North America, South America, Europe, Asia, and Australia. Revenues have soared from $4 million to $100 million since his appointment as CEO, and staff has grown from 26 to 350.
At its Salford site alone, Salford employs 170 workers. Tracing a triangle on a map behind his desk, connecting London, Kitchener, and Tillsonburg, Gray indicates the region bound by the three cities where most of Salford’s employees live. Different positions require different qualifications and skills: engineers and professionals need a university or college degree, customer service representatives require a farm background, and manufacturing operations personnel are mostly trained in house; during their year of valuable hands-on training, operations personnel develop tremendous experience.
In addition, Salford recruits different co-op positions throughout the year from Conestoga College, Fanshawe College, the University of Waterloo, the University of Guelph, and McMaster University. Currently, four engineering students are in the rotation in the group.
Gray reports that he is also in need of Russian speakers, of which there seems to be a dearth around Salford. Russian language skills are a hot commodity as Salford pursues aggressive acquisitions, one of which is a company in Siberia. With its profusion of massive, previously government-owned farms, the post-Soviet states import much of Salford’s machinery.
Because Salford exports high volumes to the Midwestern United States, the company’s first acquisition was in Iowa nearly a decade ago. Since then, it has acquired the aforementioned Siberian company, as well as a plant in Georgia. Just six weeks before our interview, Salford also purchased a plant in Manitoba.
According to Gray, the acquisition represents “a win-win situation”; small companies get access to Salford’s large distribution network, resources, engineers, manufacturing expertise, and brand recognition, accelerating their products’ time to market. At the same time, Salford gains new customers, product lines, and markets.
The Salford, Ontario site ships south to the United States, while the Iowa site actually ships north into Western Canada. The shipping patterns make practical sense. Drawing two lines on the map of North America, Gray shows how shipping from Ontario to Western Canada is twice the length of the Iowa–Western Canada line.
Although Salford’s growth has been significant, farm machinery manufacturing is certainly not without its challenges. Pulling up a chart on his computer, Gray demonstrates how corn prices have dropped to half of what they used to be. When commodity prices fall, farmers have no choice but to cut costs—costs such as purchasing a new piece of Salford equipment.
However, Gray remains optimistic. As China and other developing countries acquire more wealth per capita, he explains, they will consume more meat. Increasing demand for meat means increasing demand for feed. Gray has faith in basic supply and demand, and feels that corn prices will rise again.
Devaluation of the Canadian dollar has been both positive and negative for manufacturers like Salford. Part of the input costs is paid in U.S. dollars, but revenues are largely in Canadian dollars. However, Gray notes that the natural hedge mitigates currency exchange risk somewhat. Simultaneously, the lower Canadian dollar helps Salford export its products. Canadian exporters (and particularly manufacturers) will be the major winners in the current situation.
Despite all of these challenges, Salford is committed to staying in Canada. If one product line becomes less competitive, the company will find another way to stay in business. Gray says, “This is home. My children grew up here; my church is here. Come what may, we’re not going anywhere. We’ll find a way to survive and manufacture in Canada.”
Visit Salford Group online today!
Published on January 25, 2016
Salford Group Inc. designs, manufactures, and assembles farm machinery for the agricultural marketplace. The company offers primary tillage, secondary tillage, seeding, and fertilizing equipment and attachments.
Headquarters: 364018 McBeth Road Salford, ON N0J 1W0 Canada
- Iowa — 825 Furnas Drive Osceola, Iowa, USA 50213-9690 (Sales & Manufacturing)
- Georgia — P.O. Box 630 470 South Wayside Street Cornelia, GA 30531 (Sales & Manufacturing)
- Founder: Jake Rozendaal
- President: Geof Gray (since 2001)
Year established: 1978
Number of employees: 170 at the Salford, ON site, and a total of 350 employees at all 5 sites
Revenues: 100 million CAD
Line of business
SIC Code: 3715
NAICS 336212: Truck trailer manufacturing
Salford manufactures a full line of tillage equipment and seeding equipment. For example: Salford-BBI Fertilizer & Litter Spreaders, and Salford Valmar-Granular Applicators
For Salford site
Customers: 20 percent Canada, 60 percent U.S., 20 percent overseas (mostly former Soviet regions - sell to large, prior government-owned farms)
Exports: U.S., Chile, Turkey and Australia
R&D, Skills and Educational needs
Employees: Engineers with a college or university background, CAA accountants, welders and tradesmen, customer service representatives with a farming background, and manufacturing positions with no prior experience necessary
Salford Farm Machinery was founded in 1978 by Jake Rozendaal. It originated as a one-man repair shop in 1975. In 1978, Salford Farm Machinery began as a tractor dealership and welding shop. In 1982, the business became primarily a cultivator manufacturer, with ploughs added in 1984 and Salford V-box manure spreaders built from 1987 to 1994. In October 2014, BBI was purchased by Salford Group Inc. helping Salford expand its markets abroad. Salford is now owned by a U.S. private equity company.
It’s a competitive market, both locally and globally. Most competitors are in the U.S. and in Western Canada. There are fewer competitors in Ontario; Salford is the largest.
- No formal partnerships with educational institutions, but does recruit from nearby colleges/universities
- SR&ED, Export Development Centre (EDC is very helpful)
- Salford hires co-ops for engineering every year.
- Hires employees from Conestoga college (in Kitchener), Fanshawe College, and Waterloo, Guelph, McMaster Universities
- Focus on quality & design. Salford knows farmers’ desires and meets their needs
- Aggressive acquisitions, expanding product lines, markets, and technology
- Strong financials, with a holding company backing Salford Group Inc.
- Strong presence in Ontario, and regions of Western Canada, the American Midwest and the former USSR
- Inventory numbers at times are higher than required
- Continued export, and expanding international market.
- Agriculture industry is on the downturn.
- Very low corn price
- Difficult finding professional staff locally
- In 2007, Salford Farm machinery acquired a trailer company in Osceola – expanding its reach into the American market
- A manufacturing location in Omsk, Russia was purchased in 2011.
- In 2013, Salford was acquired by GenNx360 Capital Partners – a private equity firm focused on investing in agriculture and industrial business-to-business companies.
- October 2014, acquired Valmar Airflo (Manitoba)
- May 2015, acquired Katyas Corp (Georgia, USA)
- December 2015, acquired AerWay (Norwich, ON) product line from SAF-Holland Canada Ltd., expanding Salford Group’s niche tillage product lineup to offer more vertical tillage and pastureland management tools.