License Launchers

It wasn’t so long ago that a resistance to licensing proprietary products permeated the precast concrete manufacturing industry. One school of thought suggests that it was because the vast majority of precasters were independent mom-and-pop operations in which mom and pop started out with practically nothing in a back yard or garage making only one or two products. Whenever they made an investment in the business, it was usually for forms and equipment that would allow them to build staple products in high demand.
But as generations march on, so does technology. Both have led to more demand for products that have been well engineered. And many precasters now seek the ability to make products that have already been advertised, marketed and, hopefully, proven their clout in sales volumes.

Rodney Smith, president of Smith-Midland Corp. of Midland, Va., says that the Europeans have been licensing precast products for a very long time and that the practice has become more acceptable in Canada. “But in the U.S., when we first started licensing, it was actually an unpopular kind of business for precasters,” says Rodney. “But I never give up as long as something’s a good idea.” And his tenacity is finally paying off.

“I think what we’re seeing now is the second and third generation maybe not as resistant to that licensing,” says Ashley Smith, vice president of sales and marketing. “A lot of people see it as a faster way of getting into a product line, a faster way of getting that expertise, a faster way of getting information instead of having to develop it all on their own.”
Networking and diversity are two key components for success in the precast industry, especially when offering licenses for your products, says Ashley. A great deal of the company’s networking strategy has centered around its involvement with NPCA, for which Rodney served as chairman of the board for 1980.

Besides attending NPCA’s annual trade show and convention, the Smiths have visited hundreds of precast plants in North America and around the world through contacts they made through NPCA. “You pick up new ideas from being in the association, and that’s been an important part of the growth and the product development for our company,” says Ashley.

Product diversification helps smooth the peaks and valleys of supply and demand in the marketplace. “I think that’s real important in today’s economy, because one sector can be down, and when that sector is down you have to have something else that you can focus on to pick up the slack,” says Ashley. He says Smith-Midland’s biggest challenge is that, rather than being an expert in one market, it has to be an expert in four or five different markets. “So it puts a little more pressure on us.”

As an example, since the company designs, builds and installs sound walls, it has to provide expertise in all areas associated with that product. “You have to know your engineering, you have to know soil engineering, you have to know all your specifications,” says Ashley. And then there is permitting and how you relate to the different state agencies. Also, since the company designs, builds and installs wall panels, it has to provide expertise in other areas as well. “You have to know the architectural industry. You have to know mixes, colors, textures and how the panel affects the structure. You have to know a lot about installations and access for the crane equipment,” he says.

“Small and medium sized companies have to look for advantages where they can, and sometimes I’ve seen them team up with somebody who has a proprietary system or something they can take advantage of in their local markets,” says Ashley. “I think we’re going to see our industry move a little more like the Europeans, where they do a lot of licensing, a lot of technology transfer and a lot of innovation. We’re already starting to see it with Easi-Set licensees in 23 states and eight countries.”

Smith-Midland is poised for it, despite the fact that it also had its beginnings in a garage. “There’s nothing we’re doing that any other precaster can’t go out and do. It’s just easier and less risky when you take on a proven product with a track record along with the strength in numbers that comes with licensing,” says Ashley.

“The company history has been to introduce a new product that has features and advantages that nobody else has, and then to license other precasters to build those products,” says Rodney. “It’s a way of expanding your business and taking advantage of a superior product without having to build precast plants in every corner of the country.”