Many in the general power transmission industry think things are looking up these days. But they also know enough to keep from celebrating too much. Take the issue of steel—both its supply as well as the price.

At Baldwin Supply, Ron Herem, vice president of marketing and business development, concedes he and his company have actually benefited from rising demand for steel—and the rising prices that go with it.

"Steel has been a plus and minus, if you will," he explains, from his Minneapolis office. "The mines in northern Minnesota have been going great guns trying to keep up with the demand."

The downside for Baldwin Supply is that they "are fighting the steel price increases that everyone is trying to push through as a result of that [demand]," he adds.

Baldwin Supply has five branches and serves customers in the eastern part of the Dakotas, northern Iowa and some areas in western Wisconsin. Herem adds that, lately, Baldwin has tried to do what so many in distribution have been doing: taking the value-added path to attracting, and then keeping, more customers. A good example is the eStore feature offered on the Baldwin Web site.

"Baldwin customers are using it quite extensively," he says. "A lot of them like the ability to go in, place orders and check inventory, expedite [orders]. In some respects, it's helped reduce the work loads of some of our customer service people on routine [questions] like 'When is it going to ship?'"

Coming on the heels of "an excellent 2004," as Herem puts it, he is upbeat.

"Repair and service went very well for us," Herem says. "We've purchased a conveyor belt installation and repair company and that's been going well for us.... And those things help us get new customers and do some more value-added things," which he hopes Baldwin can expand on in 2005.

Based in Kimberly, Wis., Kurz Electric Solutions is an independent distributor of electric motors and power transmission equipment,

Rick Nowak, president and CEO, says he has seen a rise in the demand for Kurz repair services, pointing to a 12 percent increase in business in that end of the company.

"The rule of thumb our customer base has used is it that if the cost to repair something was 65 percent of what a new product would cost, they'd ask us to replace it," Nowak explains. "But I would say last year, people would go as high as 85 percent to 90 percent. Generally speaking, we saw more people approve repairs as opposed to buying the new product, not just in '04 but in 2003 as well."

Kurz has a large motor repair operation and warehouse in Appleton, Wis. Last year, the company acquired Electric Sales and Engineering in New Berlin, Wis., and the firm has benefited from placing great importance on the value-added factor in acquiring and then keeping customers.

"Customers are looking for their vendors and suppliers to be a lot more proactive," Nowak explains. "So we're aggressively being proactive out there and that should help us increase our market share."

jnowlan@reedbusiness.com