Filling a need

Compressor Engineering Corp. (CECO) is the world’s largest independent manufacturer of engine and compressor replacement parts. CECO, which was founded 60 years ago by Ernest G. Hotze and is still family owned, offers pipeline construction and maintenance, emissions testing, and is an industry leader in training and technical services. Customers include gas pipelines, gathering and processing companies, petrochemical, industrial and refrigeration plants worldwide.

CECO is headquartered in Houston, Tx., with offices in Odessa, Tx., Walker, La., and Birmingham, Al.

COMPRESSORtech2 recently reached out to Richard K. Hotze, the company’s CEO, to learn more about the company and how it’s readying itself for the next 60 years.

Rick Hotze

Q: 60 years is a long time for any business. To what do you attribute that longevity?

A: “Find a customer’s need and fill it!” with uncompromising honesty and integrity is the leitmotif of the company instilled by the leadership of CECO since it’s founding by my father, Ernest G. Hotze in the summer of 1964. It is still the value statement of the company and all its associates 60 years later.

Q: Company founder Ernest G. Hotze identified a critical industry problem, the lack of quality compressor replacement parts. How has the company evolved to supply that need?

A: We did not start the business based upon replacement parts. The company started because Tennessee Gas wanted to purchase a 2- cycle Dresser Clark engine into a station that already had 4 cycle Ingersoll-Rand engines. The customer was impressed with the BMEP of the 2-cycle engine but wanted Ingersoll-Rand style compressor valves in lieu of the valves offered by Clark. After originally accepting the order from Tennessee Gas, Clark engineering department rejected the order and demanded that the order be returned.

Ernest Hotze made a deal with both Dresser and Tennessee Gas. The customer would order the integral engine compressor package without any compressor valves and Ernie would find a vendor to supply Ingersoll-Rand compressor valves to fill the holes in the compressor cylinders. Unable to do so, Ernie designed them himself and with the help of his sons, fashioned the valves in his garage at his Houston home.

Q: Was it a challenge for the company to get customers to trust non-OEM parts?

A: It is a misnomer that CECO makes non-OEM parts. Most of the product supplied by CECO is and has been freshly engineered by CECO over the years to replace inefficient and unreliable product offered or originally supplied by the “OEMs”. CECO has become the supplier of choice for their designed equipment.

Q: Talk about some critical moments in the company’s history.

A: In the mid 1960’s CECO purchased some raw materials from Japan that was inferior to that made in the United States that almost submarined the company due to our one and only recall. Being nimble and resilient, we hustled and survived.

We expanded into the pipeline construction business in the early 2000’s but had insufficient systems in place that nearly bankrupted the business. The ownership pitched in some more capital and working with our vendors, we were able to survive and earn the Large Business Turnaround of the Year by the Turnaround Management Association in 2014.

Q: How does CECO differentiate itself from competitors?

Ernest Hotze

A: CECO has a stable of well qualified engineers that are able to design industry leading products. Products we have designed have been patented and become a ubiquitous industry staple.

Q: What markets or technologies do you see CECO moving into?

A: CECO has been committed to maintaining the large bore engine business for decades and will continue to do so. Current efforts are to provide innovative products that reduce or eliminate fugitive emissions of methane as well as reducing the consumption of lubrication required to operate both low and high-speed engines. We are constantly expanding our field service offerings to include more overhaul crews.

Q: How do you ensure another 60 years for the company?

A: Being debt free for the first time since 1988 will help ensure that CECO can weather the industry and economic cycles that happen from time to time. CECO also has a solid succession plan that will ensure that the company will remain family owned and operated for the foreseeable future.