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Growth Setup

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  • | 6:43 a.m. March 15, 2013
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Consider this business challenge: If it takes as long as 16 weeks to manufacture a product, but your customer only orders six weeks out, you might get stuck with the inventory if demand suddenly drops.

That's the kind of dilemma that Bonita Springs-based Shaw Development faces at it supplies giant vehicle manufacturers like Caterpillar and John Deere with fluid and emissions systems.

For Shaw, this issue is critical because of shipping. “Over 40% of our products are consumed outside the U.S.,” says Kevin Hawkesworth, president and CEO of Shaw.

The company's 145 employees manufacture fluid and emissions systems in 50,000 square feet of industrial space in Bonita Springs and 10,000 square feet in Naples. “We're looking for a global footprint,” Hawkesworth says. “The length of the supply chain matters.”

Shaw already has an office in Liege, Belgium, but it's seeking to possibly expand further in Europe, the base of many heavy-duty equipment manufacturers. “That is the one bright spot in Europe right now,” Hawkesworth says.

Hawkesworth declines to cite the company's annual sales, but he says revenues grew 15% last year and 20% in 2011. This year, he projects revenues will grow about 17%. By 2016, Hawkesworth says he expects to the company to grow to more than twice the size it is today.

Much of the recent growth has come from manufacturers of off-road vehicles in the mining, agriculture and forestry fields. Hawkesworth says the company has earned new business in that area, benefiting from a global effort by governments to control vehicle emissions. “That's going to result in very substantial growth,” he says.

To help manage that growth, Shaw hired Tim McGraw as the new chief financial officer in December 2011. McGraw is a veteran of the auto industry and held finance positions at Orange Electronic, Visteon and Ford. And in February, Shaw hired Lane Morlock as chief operating officer. Morlock was formerly site operations executive with Raytheon Space and Airborne Systems. Prior to that, he worked for General Motors, which included a three-year assignment in China.

With McGraw and Morlock, Hawkesworth says privately held Shaw is focusing on long-range, strategic planning. “Internal financing is capable of supporting our growth,” he says.

But challenges always come with growth. “We need an executive-level focus on diversification and customer focus,” Hawkesworth says, noting the company is developing undisclosed new products.

One of the challenges is to remain nimble so Shaw can adapt to rapidly changing economic conditions. A recent example: “Caterpillar took $2 billion out of inventory to protect capital,” Hawkesworth says. “We're doing scenario planning right now.”

Fortunately, finding good people and persuading them to move to Southwest Florida has become easier lately because of the improving real estate market, Hawkesworth says. “In 2010, people were our biggest constraint,” he says. “People weren't looking to relocate because they were stuck in their houses.”


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