Interview with Layton Jensen, President & CEO, Thurston Manufacturing Co., Thurston, Neb.

Developing innovative tillage tools and fertilizer injection equipment — combined with an emphasis on dealer training — is Thurston Manufacturing's roadmap for growth.

"Thurston Manufacturing Co. is a family owned business located in Thurston, Neb., a village of 125 people. We currently employ 110 people and are still growing. Founder Wayne A. Jensen, a rural farmer at that time, incorporated the company in 1971. He retired in 1992 leaving the operations to me, and I now have the satisfaction of seeing my two sons manage the business. Nick Jensen, chief marketing officer, and Ryan, chief financial officer, run the day-to-day operations of the company.

"My main responsibility is advising the engineering department. Circle R and Blu-Jet are the registered trade names of our two product lines. We design, build and market Blu-Jet tillage implements and fertilizer injection applicators for farmers running high horsepower tractors (100 horsepower and up) and for large scale custom and rental fleet fertilizer applicators.

"Circle R brand includes side-dump semi-trailers for the manure, construction and mining industries.

"Our longest running tillage product, the Blu-Jet SubTiller, has been in production for 34 years with minor variations over that time span. It's designed to fracture compacted soils without burying residue, and remains popular with our customers despite the dramatic changes in tillage practices over the years.

"Fertilizer injection applicators are a major part of our business, too. Today we're building equipment with swath widths for anhydrous up to 62.5 feet. For liquid sidedress, the largest injection applicator we produce is 90 feet wide."

Building on a Solid Dealer-Distributor Network

"We currently service 356 direct territory farm equipment dealers who are managed by company salespeople or independent sales representatives.

"While our total number of dealers has been stable for the past 5 years, overall they've become much more active as a result of our increased marketing efforts.

"We also utilize 9 wholesale distributors that have a multitude of farm equipment dealers and retail fertilizer customers at their disposal. Most of these distributors carry the Blu-Jet brand as their flagship and have been on board for many years.

"Circle R side-dump trailers are sold through 16 active North American dealers. Each is responsible for a much larger territory than the implement dealers who handle Blu-Jet products.

"Regardless of product line, our objective is to give each dealer room to work and we try hard to make sure situations don't arise where we have one dealer on top of another. This is becoming increasingly difficult with all the dealer consolidation that's occurring."

Increased Efficiency

"From our perspective, it's clear that farm operators are focusing on becoming more efficient with their time and input costs, and we're seeing much more emphasis from farmers to be better stewards of the land. This is evident in their demand for variable rate fertilizer applications, section or individual row shutoff controls to minimize over application, wider width implements and the growing popularity of strip-till.

"Other significant challenges for farmers and manufacturers that we've seen in the last decade are substantially higher crop yields and tougher crop residues. This has encouraged us to develop new and better tillage tools to cut and manage crop residue with our soil inversion products.

"These factors have led us to build extra strength into our implements to match the higher horsepower equipment that is becoming popular. I also believe that our 5 year frame warranty sets us apart from other tillage tool manufacturers. It demonstrates our confidence in our engineering and gives our customers greater confidence."

Building Dealer Loyalty

"We believe our extended warranties and our growing emphasis on training are building loyalty among our dealers and ultimately with our customers. These are the things our current dealers have been asking for. As a result, it's allowing us to bring on new dealers in perimeter territories where coverage improvements are needed.

"We've added additional personnel to handle dealer needs more quickly and we're expanding product offerings to increase dealer interest and fill holes within their current equipment lines.

"Our stocking dealer program discounts are available for both spring and fall deliveries and dealers can qualify based on date or quantity ordered. We have an extensive cooperative advertising program and make it easy for dealers to qualify. Our cash discount is significantly larger than most competitors for payment within 20 days of invoice and our preseason programming is very generous. We offer finance programs allowing payments for as long as 180 days after delivery on unsold inventories.

"We've also extended our service programs to include machine set-up for dealers who want it. We try to adjust the equipment in our shop before it's delivered to help the dealer be as efficient as possible, but this can be a big, tall order because set-up can be painstaking with different soil types in different regions.

"We're now offering dealers a service for total assembly and setup of machinery. Under contract, we'll have a crew from our shop go out to a dealer or a distributor or even to the farmer's place and set the machine up and make the adjustments before they put it in the field. In these situations, we like to enlist the help of the dealer or the farmer during set-up so they have a stake in it and understand how to make the adjustments when they have to do it themselves. It's like on-site training."

Growing Training Needs

"Training is the area where we see our dealers needing the most help. We find that our most active dealers ask for annual product training for their sales and service departments. Today, it takes just about as much agronomic knowledge as product knowledge to sell tillage implements and fertilizer injection applicators. We try to focus a lot of our training and service efforts to help dealers show customers how to be more productive using our equipment.

"Common traits we see with our most active dealers are that they regularly communicate their anticipated wholegoods needs and take advantage of our early order and cash discount programs. Also, they stock an adequate amount of parts for the machines running in their area. Just as importantly, they view themselves as our partner, working together to assist our customer.

"With current market conditions, dealers are also asking to get more product in a given timeframe. They want expanded real-time information on a dealer-secure web site that includes research, agronomic information and customer testimonials that focus on equipment functionality. They're looking for anything to help them make a sale easier to achieve. We're listening and working toward giving them these tools to work with."

Looking Ahead

"Our outlook for the next year to 18 months is very positive and we believe it will build on a very strong 2011 for us. In fiscal 2011, we saw a 48% growth in revenue over an excellent 2010. Orders on the books for 2012 already exceed our 2011 numbers, which gives us confidence we can match and probably improve on last year's numbers.

"We also have a number of new products in the works. We'll be releasing a new primary tillage implement in late 2012 and another in 2013. The Galaxy strip-till system we released this past year is doing very well. It comes mounted on a close-coupled, 3-point toolbar for less drifting on hillsides along with a heavy duty lift-assist undercarriage capable of pulling nurse-tank wagons.

"As I mentioned earlier, we're expanding our facility as we speak. We're adding 50% to our footprint and adding workers to our labor force during the evening and night shifts. We've been working 24 hours a day for several years and we don't see this letting up any time soon.

"We're excited about the future of agriculture and we are preparing for additional growth and sustainability."