Business The Texas Way

Family-owned Kaspar Companies Keep Spinning Steel into Gold in Shiner

The sturdy and handsome grille guard on that truck? It’s made by Ranch Hand, the leading manufacturer of heavy-duty pickup accessories. A part within the mechanical equipment at work extracting oil and gas from the ground? Kaspar Die & Tool produced it. The smart and stylish new house that the foreman on the job just moved into? Built by Kaspar’s Silverback Homes. The valuable gold coin that the wildcatter who owns the operation was proudly showing around, part of his investment portfolio from a big well yield? Purchased from Texas Precious Metals – yes, yet another Kaspar company.

Wherever you may glance in the Eagle Ford Shale patch, Kaspar Companies likely have a role in something within your field of vision.

So even if you don’t know the Kaspar company name and its many operations, it’s hard if not nigh on impossible in the patch and across the nation to not know some of the products it has created.

And that’s how the Kaspar family that owns the clan of companies based in Shiner, TX like it. Rather than tout themselves and their wealth and achievements, they rely on tried and true old-school, solid-as-steel business values and a sterling silver reputation built over more than a century for quality, reliability and a fair deal for the price paid – their not so secret formula for its success in an ever-expanding range of industries.

Their business practices and the results speak quite eloquently for the company that began 117 years ago with strands of steel fencing wire that founder August Kaspar used to make a simple yet useful new product: wire baskets, that he first sold for a single dollar. Then sold another and another, which the Kaspar enterprises and his descendants have exponentially built upon over the years into multi-millions of dollars.

As they like to say, the history of the Kaspar Companies spans 20 recessions, one depression, two world wars, oil embargoes, steel shortages and 20 presidential administrations.

img-140602144600It began the building of a family owned and run powerhouse now in its fifth generation that has not just survived but thrived. As they like to say, the history of the Kaspar Companies spans 20 recessions, one depression, two world wars, oil embargoes, steel shortages and 20 presidential administrations.

It has been a feat of alchemy, if you will, all but literally transforming steel into gold in more ways than one. And much like how in 1897 August Kaspar sensed opportunity in spare steel fencing wire that was replaced by barbed wire as the Old West shifted to the New West, the companies that grew out of his original business, Kaspar Wire Works, now see the coming opportunities of this era, and are poised to play a role in the new oil and gas frontier found in Eagle Ford and beyond.

Small Town Values Yield Big Time Success

The town of Shiner, population just over 2,000 folks, calls itself “The Cleanest Little City in Texas,” and rightly so. It’s so picturesquely neat, tidy and evidently prosperous that it could pass for a small Texas town Americana experience at Disney World. Other than for the fact that it’s a nice place to live and work aura is a fact as cold and hard as, yes, steel. And at the same time a rather warm and neighborly reality that recalls simpler times in this nation.

“We used to have one bank and 10 beer joints, now we have three banks and three bars,” explains Greg Chumchal, general manager of Ranch Hand, as he gives a hometown tour in his truck outfitted with his company’s products. Shiner’s vintage brick and stone downtown is free of any signs of decay. The surrounding homes and lawns are all neat and tidy. The two public and private Catholic high schools excel in both academics and athletics. The town’s crown jewel is the loamy 148-acre Green-Dickson Memorial Park, where the air conditioned Kaspar Pavilion hosts an annual stock show and other events.

Situated at the northeast edge of Eagle Ford, Shiner is surrounded by brand new drilling sites. But its solid prosperity has a decidedly old-money feel.

The town may be best known for the beer that bears the name of where it is made (inside hometown skinny: in Shiner itself, the locals drink Premium and not the brand’s iconic and popular dark Bock brew). But across Highway 95 from the just-expanded brewery, a hop, skip and jump north of Shiner’s sole stoplight in the town center, is a far less-known operation. Its beginnings – an old 1930-vintage barn-style work shed that Kaspar Wire Works grew into as a business – still sits beside the road. Spliced onto it is one of many steel-sided industrial shops in which Kaspar divisions disprove the lament that no one makes anything in America anymore.

The corporate HQ, as it were, is an unassuming one-story brick building with homey wood-paneling inside. It could just as easily be the offices of a small regional construction firm, a feed and seed distributor or an upstart independent oil and gas company. Inside and out, there are no signs of an operation both worth and making millions, well beyond your usual small rural town family venture.

From its humble beginnings, Kaspar Wire Works went on to create and sell what is thought to be the first steel wire shopping cart alongside a range of other metal products. Its newspaper rack line grew into Sho-Rack, which makes newspaper vending machines with a patented coin mechanism the company invented. Many major news operations used Sho-Rack, which later hit pay dirt when it signed an exclusive deal with USA Today to provide its sales boxes nationwide.

Reputation and quality are a hallmark of everything Kaspar Companies does, and it’s ingrained in their various enterprises

From the Wire Works base sprouted Kaspar Die & Tool (which stamps and forms products and machine components from metal, plastic and other materials), Kaspar Electroplating, Kaspar Custom-Fab (precision industrial metal parts and other items), and Kaselco (which they recently sold to BakerCorp), whose wastewater treatment units use an electrocoagulation process the Kaspars developed to separate impurities and industrial waste from water. Among other variations on their metalworking expertise.

Ranch Hand-9

The various enterprises all display Kaspar business traits that go back to the founder’s first wire baskets and, next, horse muzzles: recognizing market needs and an entrepreneurial and inventive spirit. Its longtime bywords are “quality, integrity and service.”

Since it bought Ranch Hand in 2000, the family enterprises have also begun moving beyond its core operations with new ventures like Texas Precious Metals and Silverback Homes, which is developing the Las Colinas housing development in Kenedy, TX. As it does so, the Kaspar Companies continue to follow the lead of its core values and business acumen.

Home-Cooked Ranch Hand Operation Serves Texas & the Nation

A business lunch in Shiner is meat and two or three comfort food served up cafeteria style at Sunken Gardens. In a dining room that feels like it’s just off a grandmother’s kitchen in her clean and cozy countryside home, Ranch Hand’s Chumchal sits in a high-back ladder chair and chats about his company’s market profile and growth – numbers that would get investment analysts salivating at its success.

“Our biggest issue is making enough product to satisfy customer demand,” he explains with a relaxed good ol’ boy friendliness. “We’ve been running hard, double shifts, opened another factory, trying to do whatever we can to get more product out.” Its lines include grille guards, front and back replacement bumpers, headache racks (louvered steel shades mounted behind truck cab rear windows), running steps under cab doors, truck bed tool boxes and more.

“We’ve had annual double digit growth mostly between 20 and 35 percent,” excepting a year or so after the economic downturn that hit in 2007 when sales briefly remained flat. “In heavy duty truck accessories we have about 60 percent of the market.” Any competition, if at all, is “quite a few” smaller companies without the muscle and smarts to even budge Ranch Hand off, not just the top, but most of the mountain.

“How did we get to be #1? Really, it starts off with the solid construction of the product,” Chumchal explains. “Ranch Hand is known as the highest quality and strongest vehicle protection equipment out there. If somebody’s going to spend $50,000 on a truck, and they want protection on it, they don’t want just anything. They want something that’s going to take an impact and keep on driving. People want to know their family is protected inside of that vehicle.”

“Our manufacturing helps define all of that: the material we use, how we do it, what kind of welds, what kind of finish,” adds Chumchal. “We use a super-polyester powder coating that’s really, really durable, with very good UV protection in case it’s sitting out in the sun all the time.”

“Then there’s the look. Our customers want something that is going to look good. We design ours a little differently than most of our competitors. Our products are truck-brand specific. For a Ford, you’ll get one design. For a Chevy, a little bit different. We design the product to complement the truck. We don’t just look at design cosmetically though, but also in terms of installation to make sure it’s really easy and non-complicated for our dealers and customers,” he points out.

“The third leg of it is really customer service,” he stresses. “We go above and beyond to take care of our customers. We feel that our best form of marketing and advertising is word of mouth. We take great pride in taking care of the customer” – both wholesale and retail – “in one way or another.”

Much like how the Kaspar operations grew out of a farm, Ranch Hand’s grille guards began as a sideline in a welding shop in Boerne in the mid-1980s. “It started as a need, out in the Hill Country, with its deer population. They got tired of hitting them and then thousands of dollars in damage later…” Chumchal explains. The grille guards were also used to bump open gates on ranches.

“But it has become a status thing for people,” he notes. “People want the best and everyone in our industry knows that’s a Ranch Hand. Our product fulfills a need and a want. It’s been really cool to see that transition.”

There’s one other component that helps the company excel, Chumchal stresses. “Ranch Hand’s success is about the people. You have to have the people there who are willing to do the job well.”

It’s not the sophisticated inside business techniques and tactics taught at Harvard Business School. Rather it’s the old-school tried and true that still works like a charm. Reputation and quality are a hallmark of everything Kaspar Companies does, and it’s ingrained in their various enterprises. “It’s a culture, absolutely, really,” Chumchal observes.

Spinning Solid Gold Growth From a Firm Steel Base

“Our whole company has been built on integrity, trust and reliability, which is distinct from 90 percent of the others in the industry,” says Tarek Saab, Chief Operating Officer of Texas Precious Metals as well as a number of other Kaspar operations. The newest Kaspar venture that began in 2010 doesn’t craft products from metal but instead sells investment-grade gold, silver and platinum coins and bars.

One might describe Saab as a bit of a wild card in the Kaspar business deck – an ace from a different suit. Unlike everyone else at the Kaspar HQ he wears a stylish sport coat (but with jeans) rather than the prevailing country working casual style of the firm’s executives. He brings some outside youthful contemporary edge to an outfit that already innovates in its old school style. Unlike the ribrock Swiss Methodist Kaspars, every one of them firm true maroon Texas A&M grads, he’s a first-generation offspring of Lebanese and Portuguese Catholic immigrants from working class origins outside Boston, MA. Yet at heart he shares their basic personal and business principles.

Holding degrees in both liberal arts and electrical engineering, Saab has worked in commodities brokering, is involved in a hedge fund, and was a marketing manager for Texas Instruments. He was a finalist on the Donald Trump TV series “The Apprentice” and authored a book, “Gut Check,” about love, work and manhood issues for today’s young men.

He was also a precious metals investor and trader who got connected with fifth generation investment expert Jason Kaspar via mutual contacts. Saab was living in South America at the time, and the two forged a working relationship and friendship via Skype. “It was like talking with a twin brother as far as the way we think and see the world,” Jason explains. “He has a lot of talents that I don’t have. We know how to make good quality products. But he brought a branding and image, E-commerce, IT sort of thing to us.”

The company they started together has enjoyed phenomenal growth. “We went from $11 million to $50 million to $180 million by year three,” Saab says. “I attribute it to a few things. The name of the game is credibility in our industry. And when you can attach the Kaspar brand and the longevity to a company like Texas Precious Metals, I think that goes a long way.

“I think we also hit a home run with the name of the company. Texas is a brand unto itself. And our slogan is ‘Business the Texas Way.’ That means something to people.” The company’s success has earned it the #1 spot on 2014 Aggie 100, which identifies, recognizes and celebrates the 100 fastest growing businesses in the world owned or led by Texas A&M graduates.

Unlike many other firms in the industry, they only sell what they have in stock and ship it (fully insured by UPS) within three days, don’t do sales calls, and eschew high-pressure tactics as well as stirring fears about financial and systemic breakdowns, against which precious metals are the wisest hedge. And in the Kaspar way, there’s a nice family touch to their professionalism. “Everything that goes out of here is packed by moms,” Saab notes. His mother and Jason’s as well as that of another Kaspar staffer are the Texas Precious Metals packing crew.

“We were really clever with the way we promoted the business,” explains Saab. “We didn’t have a huge budget. We started at the local level. As Greg mentioned, word of mouth is the greatest marketing utility. For me it’s the same thing. A satisfied customer is three to five more satisfied customers.” Just as August Kaspar discovered with his wire basket sales.

Values Measured Not in Net Worth But Business Practices

Just how profitable and valuable is this privately-owned family of companies? “We just do what we do,” Chumchal observes when the question comes up. And it’s not just rhetoric said to maintain privacy.

Among family-owned corporations in the nation, says Saab, Kaspar Companies are “in terms of collective revenue, definitely Top 100.”

“The name of the game is credibility in our industry.”

You wouldn’t know it by seeing the Kaspars. Jason drives a funky old Toyota with some 220,000 miles on it. The reason why isn’t so much an almost-genetic Kaspar family humility as much as just their good ol’ common dollars-and-cents sense.

Ranch Hand-12“A car is a liability, not an investment. As soon as you buy it, it starts depreciating in value,” he succinctly observes.

The Kaspar family has also stressed the value of hard work to its new generations. “My first job was on the ranching division when I was 13, hauling hay when it was 103 degrees,” recalls Jason, the oldest of the 10 fifth generation Kaspars. “My second job was Greg putting me outside the door of Ranch Hand grinding grille guards and almost dying of dehydration.” With a keen interest in finance since his youth, after graduating from A&M he worked for investment firms in Dallas and New York City before coming home to the family business.

His sister Cherise Ratliff found her professional passion when she sought out a part-time job in her sophomore year at A&M and landed an office manager position at a real estate agency. She went on to be licensed and sell properties in Texas and Oregon, and after returning to the Lone Star State, joined the family concern to work as marketing manager for Ranch Hand. Today she is general manager of Silverback Homes, which is building the 300-plus home Las Colinas community in the heart of the Eagle Ford patch in Karnes County.

“We would never have jumped into this project if it weren’t for the Eagle Ford,” Ratliff explains (pronouncing the shale field name in a local manner that comes out as one word, Eagleford, accent on the first syllable). The Kaspars had previously subdivided and prepared land they held in Shiner for two housing communities. As formerly barren Kenedy blossoms due to the shale boom, the cost of accommodations for the influx of workers is at a high premium.

“Our goal is to provide affordable long-term housing for the growing community,” she explains. With many amenities as well as 28 duplexes and two commercial sites, the development’s home prices on eight different designs start at $179,900. “Las Colinas will be the place to live,” Ratliff says. And it brings some of the small town atmosphere the Kaspars value in Shiner to Kenedy.

A Future as Bright as a Shiny Gold Bar

“We’ve been blessed with three or four industries that are all being positively impacted by the oil and gas boom,” says Ratliff. Including their current top-line enterprises like Ranch Hand, Texas Precious Metals and Silverback Homes, just how many companies are there under the Kaspar roof?

Chumchal and Saab chuckle at the question. “Depends on how technical you want to be. Can range from four to…” Chumchal tries to explain.

“21?” guesses Saab.

“20….” Chumchal estimates. “That’s a loaded question.” Not so much as there’s any hush-hush state secrets around what they do as much as change is a constant for the Kaspar enterprises. Just as change is a constant in the marketplace. Since there’s a natural synergy among its many metalworking divisions, a corporate structural flow chart is almost irrelevant.

The firm just purchased Austin-based Weatherall Enclosures, whose metal utility boxes are a good fit for its forming and fabricating operations. They recently sold Kaselco, whose water purification process is being utilized in hydraulic fracturing operations in the Shale patch. When the Bassick Casters line they acquired and made for years was sold to a competitor, Ranch Hand came into its quarters and took up any slack in operations.

Ranch Hand’s franchise of retail stores, Truckfitters, added its eighth retail location in Cedar Park last year, and the hope is to grow that end of the business further (six of its stores are in Texas, but two others in Oklahoma City and Colorado Springs reflect the spreading appeal of their products). They sell and install all the Ranch Hand lines alongside a full-inventory of other truck accessories – and have the capacity to outfit fleets – plus act as wholesale suppliers for the company’s products to other vendors. Texas Precious Metals has introduced its own Texas Silver Round coin into the market, and given the family’s experience in punching and stamping metal, its own mint is even a future possibility.

“If you look at where Kaspar Companies have been, 15 to 20 years ago, 80 percent of it was business to business and manufacturing based,” Jason points out. “Today we’re 50 percent business to consumer and 50 percent business to business and moving more business to consumer.

“A mini Berkshire Hathaway is definitely the direction where we’re going,” he says.

But whatever the company undertakes, it remains a hands-on family operation, epitomized by fourth generation veteran Douglas Kaspar’s many roles over the years. “I’m an industrial engineer from Texas A&M,” he explains. “I’ve been involved with all aspects of engineering, production management and facilities, compliance, and any kind of construction and projects, new business bids and all that stuff. I’ve had my fingers in just about everything that goes on here.”

He says his position is more or less vice president of engineering. Just like the lines are blurred between Kaspar company divisions, “Titles aren’t that important here,” he explains.

“One of the trademarks of our family and our business is that we’ve been able to adapt and change with the times, and take advantage of the opportunities out there.”

What is important is what they call “doing business the right way,” and central to that is a family atmosphere that pervades the Kaspar outfit and their 500 or so employees. “They’re a great company to work for,” Chumchal attests. “Family comes first. I enjoy my job, we have a great group of people that work together. I call it the Ranch Hand family, and it really is. Many have been around 30-plus years, we know each other’s families, we live in a small town, so we know everybody.”

Inside the Ranch Hand manufacturing shop that processes some 60,000 pounds of steel a day using both traditional metal-working equipment and high-tech computerized techniques, one finds both men and women of all ages and races working away. As Chumchal gives a tour, friendly nods, waves and “how are ya?” greetings abound. If an employee has a sick child at home they need to attend to, that trumps work duties. If something in the shop needs fixing, Chumchal is ready to roll up his sleeves and help out.

For the Kaspars it’s much more about who you are than what you have. “We were blessed being raised by our grandfather and our Dad to all work full time and work hard. Working was an expectation,” explains Ratliff. Her grandfather Donald Kaspar, well into his 80s, still comes into the office every day.

“All our family emphasized non-worldliness about things that you could do with money,” says Jason. “Because you’re in a small town, we would compensate for it. Where my friends would all wear name-brand clothes, I would almost purposely not wear name-brand clothes.”

The companies have been managed under smart financial principles. “We have no net debt at Kaspar Companies,” he points out. “Could we grow faster? Possibly. Could we have a yacht? Maybe. But it’s not the way of life that suits us or is wise in the long term.”

Does he ever marvel at what his family has built? “All the time. Just walking from one side of the factory to the other, it’s like, oh my gosh! And then there’s the work effort required to build upon one another.”

It’s the result of capitalism with not just a conscience but heart and soul, plus the smarts to see market trends and respond to changing times. Sure, they pay keen attention to the financial end of their operations and investments. A Kaspar free-vend wire newspaper rack in Jason’s office is piled some three-feet high with copies of the Wall Street Journal he has delivered daily. But the talk from the executives is as much about human and social values as fiscal value.

“One of the trademarks of our family and our business is that we’ve been able to adapt and change with the times, and take advantage of the opportunities out there,” Douglas notes. “Manufacturing has gone through some tough times in America. But we’ve been able to find our niches and thrive.” And become one of the oldest continuously-operating manufacturing concerns in the nation.

So will the thriving Kaspar family businesses continue on into future generations? “Absolutely,” concludes Douglas, whose son Christopher is involved in marketing and graphics for the companies. “We’re in the early stages of transitions right now with the fifth generation coming on. We’ve got some very talented and very solid individuals in our next generation, and its exciting to see them get involved and passionate about things and take leadership and initiative in a smart way. We think there’s a very bright future for us.”

 

For more information: Visit www.kasparwire- works.com, www.texmetals.com, www.ranch- hand.com and www.silverbackhomes.com for more information on the Kaspar companies.

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