Russ: This is the BusinessMakers Show, heard here and online at TheBusinessMakers.com. It's guest time on the show and with me now I have Malcolm Gore, President Vector USA. Malcolm, welcome to the BusinessMakers Show.

Malcolm: Good morning.

Russ: Let's start by you telling us about Vector USA.

Malcolm: Okay. Vector USA is a Norwegian based company. We've been in the U.S. as a sales office since 2005. We've opened up here as a legal entity in 2008. We are a manufacturer, supplier and more importantly a designer of piper connectors and sealing solutions. We specialize in demanding environments. About 80 percent of our business is oil and gas but we also focus on customized solutions for very aggressive applications.

Russ: Okay. Demanding situations. Geez, brings up the little BP incident recently in the Gulf. Did they have any of your products?

Malcolm: Yeah. We helped them out. We actually did some wonderful things for them. We supplied a few sub-C connectors in 14 days for them which is a normally - sort of a four month lead time item for us.

Russ: My goodness. Tell us how that happened.

Malcolm: Well the first thing I think I should say is that we weren't involved before the incident. None of the equipment that was down there was ours.

Russ: That's good.

Malcolm: I need to clear that up. But we had an inquiry and a call on the Friday on whether we could produce some sub-C connectors very quickly and we worked over the weekend on it, looking at manufacturing schedules and talking to suppliers, talking to our machine shop over in the UK and basically we had an order on a Sunday evening and within 14 days we'd actually supplied the first five connectors. Then we had another call saying, "Can you give us another three?" So another 14 days later we had supplied another three. So we had supplied these eight connectors basically in a very aggressive, short lead time mainly because we've got such a good control over the supply chain and the value chain.

Russ: So there were incoming requests, too. You weren't calling on them and saying, "Can we help out?" Just somebody knew what you guys did and thought you could help right?

Malcolm: Yeah. And word gets around I guess that you can supply and you can do great things for customers. So yeah, so we are really, really pleased with that. I mean these parts normally sort of four month lead time we'd supply them on. So we had to actually prioritize these and basically stop the factory and just concentrate on this.

Russ: So were your connectors being used on some of these systems that were being put down trying to capture the oil that was coming out or -

Malcolm: I mean yeah, basically. The final solution, the one that worked our connector was used between the riser and the manifold. So there was a flexible pipe that came from the manifold onto the riser and our parts were used on that. We attended the pressure test here in Houston as well, the main test before it went off shore and we also provided an engineer as well for the duration of the installation sub-C.

Russ: Cool. Well thank you for doing that. Okay, Norwegian based and kind of focusing on pipe connectors. I mean a lot of that had to sort of been conceived from back in the beginning, all of the North Sea production and drilling and exploration that went on.

Malcolm: I mean absolutely. I mean that's where our expertise came from, I guess. I mean Vector is the amalgamation of two of our main product streams which is a compact flange and a clamp type connector and it was mainly sort of derived from servicing the North Sea and from there we reached out in the Middle East and into the Far East and now Australia as well. We have agents in Canada and Brazil. Like I say, we've opened a separate legal entity here in the U.S.

Russ: Okay, so for all of our non-engineering members in the audience what you're talking about and I hope I'm not simplifying it too much but is when pipes come together or need to be connected that's the specialty of your company.

Malcolm: Absolutely and in very high temperatures, high pressures and when you'd never want to go back to it and have to maintain it and you want the stuff to stay in the pipe, so to speak, our connectors do that better than anything else.

Russ: Okay. Now as I understand it from doing a little homework you sort of led the initiative to actually launch the U.S. full-blown Vector USA company. Correct?

Malcolm: Absolutely. I mean originally we had 2 sales guys here and 1 administrator and now we're 11 people in our office. So we - since 2008 that's fairly rapid growth I guess especially when 2009 was seen as a bit of a flat or a down year. We've gone from sort of a fairly low turnover and low revenues up into certainly double figures of the millions.

Russ: Oh wow. What do you attribute that to? I mean obviously you have good people and you have good products. Did actually coming over and establishing a beach head in the United States help spur on that revenue?

Malcolm: Well I think there's no substitute I guess for local service. I mean we manufacture our parts now in the U.S. Having to tell people that you're going to be supplying things from overseas all the time people get a little bit uneasy about that I guess. So we now supply things locally. We manufacture things locally and we also design things here. We have our own engineering and technical expertise here. So if customers have any questions or they want us to go around and explain the products we can call on them in a matter of minutes usually.

Russ: Well that's interesting. Were you involved in the company's strategic thinking of saying, "Hey we need to be in the U.S.?"

Malcolm: Yeah. I mean it all derived from a - as many of these things do from a business plan where we examine the market. We realize we were as a company very strong in the rest of the world and there was such huge potential in the U.S., in the Gulf of Mexico and also for a main hub to expand into Brazil and the oil sands of Canada.

Russ: When you were selected to lead the initiative were you pleased or were you startled or [laughs] disappointed?

Malcolm: Yeah. I was exceptionally pleased to be honest. I mean it's always a bit of a dream to sort of travel to another country and live but for myself and my family it's an adventure more than anything. But also I think I - some of the positions I'd held within Vector meant I was a reasonably good candidate I guess. I've worked in Customer Services. I'm an engineer by background. So I'd actually satisfied quite a lot of the functions within Vector that were needed to be able to build the company in all the roles it needed.

Russ: Okay. But I suppose along with that comes some pressure to perform. I mean they kind of sent you away. "Come on. Go get them Malcolm."

Malcolm: There's an old saying that, "It's lonely at the top," I guess and I think there's always that pressure. The great thing is that I've now got a good team around me. So I think we've been through the worst of it. The biggest changes were when you first of all double in size then you double in size again. So I mean we've got a great team now here in Houston and even if I'm traveling on business I know it's in safe hands.

Russ: Cool. Well now I know also you sort of appeared on my radar because in growing the organization and putting systems in to place you suddenly became a Microsoft Navision customer and part of the Houston User Group which is a new group focused exclusively on that product which is an ERP system. Right?

Malcolm: Absolutely. We chose PKF as our partners to install that and PKF did a great job. They went right from the initial installation to the commissioning to the training to setting up a chart of accounts to logging in our inventory even and as we've sort of grown and with all the growing pains therein we have to get our accounting systems correct and we have to get our inventory levels correct and there's a certain amount of traceability of our products as well, that we have to make sure that we retain to make sure that the parent material can be identified to the final part.

Russ: What sort of system were you replacing or was there a system?

Malcolm: There wasn't. There was - all the orders were actually fed back to the sister companies. So all the control was done from then. It was actually the parts were dispatched straight to the customers. Now we do all that ourselves. We raise our own purchase orders. We keep our own inventory. We do our own traceability checks. We do our own quality. All the functions that any big businesses have we need to be able to control them and be able to report on them. As all businesses that report up to a group we need to report on those quite extensively every month. Without an ERP system we'd be lost.

Russ: Well now our audience here on the BusinessMakers Show just sort of loves to see growth and some risk taking and all that sort of thing. So was it always part of the plan that after you were here for two years you'd put an ERP system in or did you, Malcolm, look up and say, "My goodness, we need a real system here to manage these," and then you had to go to the guys in Norway and get their approval and they said okay? How did that go?

Malcolm: Well to be honest it was part of the business plan. It was identified early on but we didn't really want to do it halfheartedly. We had to grow up and be a real business from day one. So from day one we were able to sort of send an invoice to the customer and actually look like a real business and be a real business because what we didn't want to do was to try and pretend to be an American business and then come across halfheartedly as if we were messing about with it. We wanted to actually be a real business. I think if set down good foundations and you do it right at the beginning - so we installed a system that was ten times what we needed perhaps but we were able then to develop that. As we went from just a supplier to a manufacturer then we were able to just turn on the manufacturing modules within Navision and then be able to implement them in stages.

Russ: Ten times, my goodness it sounds like you're going to plan on growing here and maybe even pull headquarters from Norway over to Houston. Is that the plan? Is that part of the strategic plan, too?

Malcolm: Well I don't think they'd be too impressed with me saying something like that.

Russ: But anyway, it's all sort of neat and fascinating that the global economy that we live in nowadays I think is very conducive to doing what you guys are doing. My goodness, what are your growth plans? What do you think the actual Vector USA company looks like five years from now?

Malcolm: Well to be honest the sky's the limit. I mean at the moment we've set up Brazil and Canada as two sub-offices that report into us.

Russ: Wow.

Malcolm: There's no reason that the same thing can't be sort of daisy chained out to them. In the way that we set up an office here and grown there's no way that - if Brazil and Canada grow and there's no reason why they shouldn't because the market is there then there's no reason why we'd actually then go and sponsor them and we'd set them as a separate legal entity. There will be no reason not to do that. But to be honest, the sky's the limit. We haven't even scratched the surface really. I mean we sell mainly into the Gulf of Mexico here. There's the whole rest of the USA. As I said earlier 80 percent of what we sell is into oil and gas but we also sell into the nuclear and power industry and defense and aerospace.

Russ: But all in the category of these connectors that connect dangerous, high pressure, stressful pipes, right?

Malcolm: Absolutely. To be honest, all the solutions aren't out there. I mean one of the things I'm always keen to leave people with is that we can provide customized solutions. So people come to us and say, "I want to put a cap on a vessel and it's 80 inches. How do I seal that?" So we've got a great engineering staff and great innovators that can supply a solution to them.

Russ: I'm impressed but I'm also interested of your 11 employees. That's how many you have now?

Malcolm: Yeah.

Russ: How many of them are from the UK?

Malcolm: None of them. Only me.

Russ: Only you. Wow. So everything else is U.S. based people?

Malcolm: We're absolutely a ground up USA company.

Russ: They didn't have any problem reporting to you?

Malcolm: I've got a couple of guys in the room. Perhaps you should ask them later. No, I think it's going well actually, to be honest.

Russ: No, that's great. Well Malcolm I really appreciate you sharing your story with us.

Malcolm: Okay. Thank you very much for your time.

Russ: You bet. That's Malcolm Gore, President Vector USA. This is the BusinessMakers Show, heard here and online at TheBusinessMakers.com.