Prairie Pillar: Thawzall, LLC

Thirteen years ago a plumber from Glenwood, MN, responded to a request from a contractor friend who was caught short by winter freeze-up. The machine Jerome Jakobson created to thaw out frozen ground so it could be excavated and prepared for the pouring of concrete could also be used to keep the concrete warm as it cured.

Jakobson’s portable hydronic heat system received a patent in 1999 and he founded T.H.E Machine Company, which was sold to a group of five investors from the Alexandria, MN, area in 2007 and renamed Thawzall, LLC.

The company has grown to become one of the top two U.S. produced heating systems. Assorted models of Thawzall machines are in service all over the world, utilized by rental yards, contractors, the military and other crews of concrete workers who can’t allow cold winter weather to slow down construction.

At its peak, the Glenwood, MN-based company employed more than 25 workers, primarily from the Glenwood and Alexandria areas in west central Minnesota. But like a number of companies in the region, the stalled national construction industry has forced Thawzall to slow down its production schedule.

“Right now the United States market is pretty well shut down,” says Jim Conn, the company’s president, “but as the international and national economies begin to recover, we are seeing more signs of potential sales growth.”

Conn says nearly 99 percent of the company’s product line is sold to rental yards, which use the machines for a few seasons, then sell them to contractors. The business model worked fine until the global recession and stagnating construction market caught up with the firm last fall, just as the company would have entered its normally busy sales season that runs from October through February.

“The business essentially tanked last September,” he says. “We had built up so much inventory that we didn’t need to maintain our normal manufacturing schedule, so we downsized to six fulltime employees until the market begins to rebound and we sell the existing inventory. We’re working on improvements with a technology consultant I’ve known for several years in earlier positions and we’ve applied for more patents as we update the machine.”

Continual innovation

A recent update that has enabled Thawzall to gain a foothold in the Canadian energy market is converting all the copper tubing originally utilized by the founder to rubber hose.

“Plumbers love copper because it looks so geometric and neat,” Conn says, “but in extreme cold, if something breaks on a jobsite, it’s a challenge to find someone who can repair it. That’s also part of the reason why we assemble much of the machine from off-the-shelf electrical components … if something breaks, you can usually buy replacement parts from the local electric supply distributor.”

Conn says he and the investment team realized that assembly of parts was a better way to utilize their talents, focusing on producing a nice-looking, high-quality machine with 20 new improvements in the last couple years. Most of the company’s components are produced by local and regional manufacturing firms.

“The principle components for our success are quality, innovation and relationships,” Conn says. “We have one of the best sales managers I’ve ever seen for building relationships in Joe Ruttger and we are now measuring up to the perceptions our customers and prospects have of us. There is one tough competitor who beat us to market by about two years, so we know we’ll have to work hard to achieve the level of market penetration we need to position the company for recovery.”

Positioned for economic recovery

Even though times are tough, Conn sees a “glimmer of hope on the horizon” in the oil fields around Edmonton, Alberta and in Saskatchewan, which has just opened up access to exploration of oil sands in that province. He says the pipelines being constructed through the region are destined to reach a refinery near Chicago, which is undergoing a $3 billion expansion — another market for Thawzall’s low pressure, closed-loop portable heating systems.

“We’ve also found a market with the wind industry and oilfields out west,” Conn says. “They can’t let winter temperatures slow them down. In addition to a number of accessories that expand the capacity of Thawzall operators, one of the most popular components are the unit heaters that utilize the circulating, heated fluids and a fan to heat indoor spaces on job sites, including one designed specifically for use in hazardous petrochemical and oil environments requiring explosion-proof devices.”

The company has also done work on the construction sites of TCF Bank Stadium, the University of Minnesota’s new football stadium, and Target Field, the Minnesota Twins new baseball stadium that opens next spring.

Thawzall’s patented multi-zone heating system provides even heat over a large area through low-pressure hoses that add a safety element for workers and come in lengths of 1,200 feet up to 18,000 feet with accessory reels and multiple pumps.

The company’s innovations have helped it gain a much higher profile on construction sites all over the frozen north and have positioned the company for the eventual rebound of the commercial construction sector and the national economy.