Business Record InnovationIOWA Weekly | October 3, 2024
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From left: Steve Sukup, Hank Norem and Emily Schmitt. Photo by Duane Tinkey.
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After seven years of developing a new technology product for Sukup Manufacturing Co.’s customers, President Steve Sukup decided it was time to find and dedicate the resources to bring it to market.
Emily Schmitt, Sukup’s chief administrative officer, said the family-owned manufacturer built the technology better than what it could buy from another company, but it needed a leader in automation to help execute.
“We have a great labor force, but going into the tech industry, we needed some more resources,” Schmitt said in an August interview with the Business Record.
Steve Sukup said as acquisitions became a “hot market” in the last five to 10 years, he wanted their acquisition to strengthen the company’s core business and add value for customers.
“We’ve watched competitors, and we can’t say that we really saw anybody that did a successful acquisition. … We wanted to learn [and] say, ‘OK, what do we want to do right with our acquisition?’” he said.
They found the right match in Ramco Innovations, another 60-year-old company. Sukup already had a relationship with the West Des Moines-based factory automation distributor as a customer, collaborating on efficiencies and automations for its plants.
Now, Sukup wants to bring automation from the factory floor to the farm.
The acquisition, which was announced in December, formed Sukup Innovations, a new entity that oversees new product development at Sukup, Ramco and Maple Studios, a space on Ramco’s campus for industrial technology startups.
Ramco CEO Hank Norem is leading Sukup Innovations as chief innovation officer. He said he was initially curious when the company reached out to discuss launching an innovation arm.
“Ramco has been in existence for over 60 years [and] evolved and grown over time. Thinking about what that next step looked like seemed like a great opportunity to partner with another 60-year-old business that’s got a large footprint and additional capabilities,” Norem said.
Sukup Innovations will focus on the launch of its new product in the coming months, Norem said, but it will also serve as an outlet to vet new technologies.
He said establishing Sukup Innovations signals a continued commitment to innovation from the 61-year-old manufacturer of grain drying, storage and handling equipment.
“Sukup’s always been an innovative company, but this really puts a stamp on it to say, ‘I’m going to lead this innovation charge and look at emerging technologies,’ [and] harness what we’re already doing and try to continue development along the way, so that could include Sukup, Ramco [and] Maple Studios, all innovation efforts through there,” he said.
Steve Sukup said Ramco and Sukup’s joining forces poses a multiplier opportunity for Iowa’s manufacturing industry.
“I think the combination is going to be a multiple. It’s exponential, not just adding to it,” Steve Sukup said. “That’s what we matched up well with Hank on is he wants to [say] how can we leverage everything to grow faster, provide better products … it’s one that we both can tell the same story.”
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Sukup Manufacturing Co.’s headquarters in Sheffield, Iowa. Sukup has built out its presence along Interstate 35 between its headquarters, an office in Ames and Ramco’s campus in West Des Moines. Photo by Duane Tinkey.
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Setting up Sukup Innovations
The two Iowa-based companies have built their businesses on trust and embraced innovation, the leaders said.
Sukup started in 1963 with Eugene Sukup’s invention of a system to keep grain from overheating and spoiling. Schmitt said the entrepreneurial mindset the company was founded on never left, and innovating is synonymous with staying competitive and adding new value to customers.
Steve Sukup said the relationships they’ve built with their dealers and customers has positioned them to understand farmers’ needs and gain their trust as they test new ideas.
“They want us leading out there, and it’s always when is it good enough to bring to the market?” he said.
Employing over 800 workers worldwide, Sukup has expanded its presence in Iowa in addition to its global footprint. It operates a 1-million-square-foot facility at its headquarters in Sheffield, facilities in Manly, Clear Lake and Hampton, as well as an Ames office that opened in 2017.
Ramco, founded in 1962 by Tom and Marj Ramsey, started as an electrical supply distributor and began to focus on selling and servicing higher-tech products in the 1960s when solid-state electronics became more popular, according to the company’s website.
Today, the company designs, assembles and installs automation applications, including industrial robots, in addition to its industrial electrical components business. It has operations in Nebraska, Kansas, Illinois and Missouri.
As the companies start to integrate offices and teams, their locations complement each other, with Sukup covering more rural parts of the Midwest and Ramco concentrated in urban areas.
They have also each gathered decades worth of business lessons and best practices to exchange. Norem said the open-mindedness of both businesses allows Sukup Innovations to easily try a new process or idea.
“Sukup [is] quick to adopt,” he said. “That’s been really exciting to see and it’s been very comforting for the Ramco and the Sukup folks because that adoption of new ideas has really [been embraced] bi-directionally with the two companies.”
Ramco brings a strong understanding of the agriculture industry from its client base, but its knowledge of related industries has applications at Sukup as well, Norem said.
It also has a look into emerging industrial technologies through Maple Studios, a startup studio launched in 2018 on Ramco’s campus. Norem said the formation of Sukup Innovations will help identify solutions that could “plug in” to Sukup or Ramco.
“Maple Studios is going to help serve as a pipeline of emerging technology to Ramco or Sukup and vice versa. If there are certain technologies that Sukup senior leadership wants to review, they can have that done through Maple Studios,” Norem said.
Between Sheffield, Ames and now Ramco’s office in the Des Moines area, Sukup has a presence along much of Interstate 35. Norem said Sukup Innovations has built out teams and lab space in all three locations to expedite progress on Sukup’s investment.
He said the long-term strategic investments Sukup is capable of as a family-owned, privately held company helped make new investments like Sukup Innovations possible.
Sukup Innovations’ team is a mix of new hires and existing workforce from Sukup and Ramco, with plans to add.
Steve Sukup said with the current economic challenges in the agriculture industry, including almost 4,700 layoffs reported at companies tied to agriculture so far in 2024, strategic growth across the company is on the manufacturer’s radar.
“Hank is exploring the expertise that’s across the industry of who we can bring in. We do have a goal of bringing in a number of individuals in some areas that we haven’t touched [before],” Sukup said.
Sukup’s locations along Interstate 35 could help Iowa retain highly skilled technology talent, Norem said.
“As we’re recruiting and walking folks through … they know that they have a place to grow here amongst those three campuses,” he said.
Schmitt said with the addition of Ramco’s location, Sukup has started to have success with recruiting former employees who moved to the Des Moines area.
She said she thinks the company’s growth in Iowa and culture helps attract new employees.
“We’re building out an Iowa footprint because we do have the resources and people in Iowa and I think that’s what they’re recognizing. … People want to know who they’re working with. [At] bigger companies, it gets lost in the fold, so I think that high-touch employee culture is key. Ramco had that culture already. We have that culture and want to keep it,” she said.
Norem said less than a year since the acquisition, Sukup Innovations has also garnered attention from outside parties interested in partnering.
“Our state’s very supportive of industrial innovative companies, and with these two coming together, we feel like we’re going to fast-track development,” he said. “Sukup’s going to help Ramco go faster. Ramco’s going to help Sukup go faster. Together it really is a one-plus-one-equals-three equation.”
Continue reading this and other stories from the Business Record's Made in Iowa edition
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The Iowa Rural Development Council (IRDC) has selected four pilot communities to participate in its new Rural Business Initiative, which was created with a $200,000 grant from Wells Fargo.
The rural communities are located within 30 miles of a Wells Fargo branch. Each proposed a plan to support existing small business, enhance entrepreneurship and expand the economic vitality of their area.
The pilot communities are:
City of Minden
The city of Minden is launching a “Forward With Strength” effort targeting its central business district after the town was hit by two tornadoes this spring that destroyed 40% of the community. According to a news release, the district, known as the Minden Triangle, was “vibrant” before the tornadoes, but many businesses have not been able to operate since.
Pathfinders Resource Conservation and Development Region
Pathfinders RC&D is a nonprofit serving five core counties in southeast Iowa, with additional services reaching more than 20 counties in the region. Through the Leveraging Access for Underserved Networks and Capital for Hope (LAUNCH) program, Pathfinders aims to help small businesses in 21 rural communities across the five core counties, the news release said. LAUNCH seeks to bridge the gap in economic development resources between smaller towns and larger cities like Ottumwa by promoting regional collaboration and providing customized support to strengthen the small-business environment and boost job creation and revenue.
Perry Chamber of Commerce
The city of Perry seeks to revive a pandemic-era business grant program for small businesses in need of capital for products, services, marketing or improvements, as well as providing connections to resources for skill building and networking. Community leaders hope to address small-business challenges that existed before the closure of the town’s Tyson pork packing plant.
West Branch Main Street
West Branch will focus on its existing effort, the Rising Tide Initiative, aimed at helping the town’s 47 small businesses by enhancing street appeal, updating signage, renovating facades, increasing accessibility and optimizing inventory. According to the release, the businesses face several challenges with the eastbound exit to Interstate 80 being closed for construction, the westbound exit set to close next year and the Herbert Hoover Presidential Library and Museum planned to close soon for renovation. The interstate closures affect access for 25,000 vehicles daily.
The IRDC will work with these communities and partners from local Wells Fargo bank branches, the Iowa Small Business Development Centers and the Iowa Center for Economic Success to develop strategies for training, capacity building and funding.
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ONE QUICK QUESTION
What does the new venture capital fund mean for the Plains Angels Investment Fund?
A few weeks ago, innovationIOWA shared that local investors Tej Dhawan and JD Geneser are launching a new statewide venture capital fund targeting early-stage startups.
Last summer, Plains Angels created the Plains Angels Investment Fund, which was designed so members of the angel investor could pool funds together to fund startups and diversify their investment portfolios by investing smaller amounts in more companies.
I asked Dhawan in our September interview what the future of the Plains Angels Investment Fund is in light of the new venture capital fund.
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“[The Plains Angels Investment Fund] was bringing groups of investors together and giving them an easy vehicle to invest. This [new fund]
very likely will supersede that. That one, we could probably retire or at least put aside. We think this will be the perfect complement to Plains Angels’ network of investors,” Dhawan said.
Dhawan and Geneser said the new venture capital fund, the Plains Angels Early Stage Investment Fund, will fall under the Plains Angels umbrella, but the fund will be managed by them, not Plains Angels members. Plains Angels is the manager of the Plains Angels Investment Fund.
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Oskaloosa hosting first Idea Lab for aspiring entrepreneurs
The Mahaska Chamber and Development Group and the Center on Rural Innovation are partnering to host an Idea Lab event to provide aspiring business owners guidance and resources to launch their companies. The free event is part of a broader effort to cultivate entrepreneurship in rural areas and address gaps in resources and mentorship, a news release said. The Center on Rural Innovation will involve two experienced representatives who specialize in helping rural entrepreneurs generate, test and refine their business ideas. Participants at the Idea Lab will learn how to evaluate the viability of their business ideas, identify key challenges and explore strategic next steps with a focus on practical applications. "We’re thrilled to be partnering with the
Center on Rural Innovation to offer this event. Mahaska County is one of the leaders in the state for unique patents and innovations and partnering with CORI could foster the next generation of entrepreneurs,” Deann DeGroot, executive director of the Mahaska Chamber and Development Group, said in a prepared statement. The event is on Oct. 8 at William Penn University’s Musco Technology Center, 201 W. Trueblood Ave. Attendees can choose from two sessions held from 9 a.m. to noon and 5:30 to 8:30 p.m. For more information, contact DeGroot at ddegroot@mahaskachamber.org.
10,000 Small Businesses opens spring cohort registration, fall cohort announced
The Goldman Sachs 10,000 Small Businesses program in Iowa is currently accepting applications for its spring 2025 cohort, which starts in February 2025. The program provides practical business education, access to capital and support services, including a dedicated business adviser. Small businesses located anywhere in Iowa are eligible to apply. The national program launched in Iowa in 2019, according to a news release. The deadline to apply is Nov. 1. To learn more and apply, click here. The organization also announced that 32 small-business owners will participate in the
program’s fall cohort.
ISU Pappajohn Center hosting SheTalks on Oct. 17
The Pappajohn Center for Entrepreneurship at Iowa State University is hosting the SheTalks event on Oct. 17, featuring the stories of seven women from the Ames community. Their stories will be presented in a fast-paced format inspired by the Japanese presentation style Pecha Kucha. Each speaker will present 20 slides, with only 20 seconds per slide. The event is from 4:30 to 6:30 p.m. at the ISU Research Park Core Facility Atrium, 1805 Collaboration Place in Ames. The event is free and open to the public, with registration encouraged.
The speakers include:
Jennifer Knox – founder of Saltlickers and associate teaching professor at Iowa State University
Ellyn Grimm and Amanda Lepper – founders of Dog-Eared Books
Lindsey Long – senior director of donor relations at the Iowa State Foundation, former assistant athletics director, and former ISU soccer player
Kori Heuss – owner of Heuss Printing
Jassma’ray Johnson – Recent ISU graduate, founder of Simply Samone, licensed massage therapist, and CYstarters alumna
Melissa Chamberlin – associate professor of management at Iowa State University
Other news:
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FROM THE BUSINESS RECORD
IN CASE YOU MISSED IT
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ONE GOOD TECH READ
Fed’s rate cut is jolting small businesses to spend againSome entrepreneurs are preparing for lower borrowing costs. Others say not so fast.
Wall Street Journal: A tire seller will open more stores. A maker of gun safes plans to boost advertising. A candle maker is looking at taking out a $20,000 loan to expand for the holidays.
Some small-business owners have begun to recalibrate their spending and investment plans in response to the Federal Reserve’s decision to cut interest rates by half a percentage point.
For Rental Concepts, based in Springdale, Ark., the rate cut announced last week — and the promise of more to come — were enough to jump-start plans to add as many as three new tire-and-wheel store locations next year.
“That they are starting to make those moves has given me the confidence to start the process again,” said Chief Executive David Harrison, who has 33 stores and about 360 employees. “We are moving forward. We are cautiously optimistic.”
The retailer refinanced its existing debt into 15-year loans with a fixed rate of 2.99% in 2021, limiting the impact of higher rates on existing operations. But Fed rate increases and a near-doubling in construction costs put a damper on expansion plans, said Harrison, who aims to have 50 stores by 2030.
Rental Concepts has agreements with two banks that are willing to provide short-term debt that can be refinanced without a prepayment penalty, assuming the appraisals pencil out, Harrison said.
Roughly 1 in 4 small-business owners said a half-percentage-point reduction in rates would be sizable enough to affect their business, according to a survey of more than 770 entrepreneurs conducted by Vistage Worldwide in early September. The survey by the business-coaching and peer-advisory firm was completed the day before the Fed announced the cut.
Other entrepreneurs said it would take months — and additional cuts — for lower rates to translate into higher sales or additional borrowing.
IN OTHER NEWS: A core issue fueling the dockworkers strike that started this week is the concern that their “semi-automated” jobs are on their way to being fully automated. They are asking for protections from that happening in their next contract (MARKETPLACE).
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MEMBERSHIP EXCLUSIVE CONTENT
BilT Guitars makes music, one custom guitar at a timeBy Kathy A. Bolten | Senior Staff Writer
Local musician and record producer Brandon Darner had a request: Could luthier Tim Thelen build an electric guitar with special effects installed in the guitar’s body?
“I was highly resistant to the idea for a long time,” said Thelen, who at the time co-owned The Lutherie Shop, a guitar repair shop near Drake University. Darner persisted and “finally broke me down and we did it. … And it actually turned out pretty cool.”
Darner, a member of the alternative rock band The Envy Corps, played the electric guitar made by Thelen and Bill Henss, a repair shop employee, during the band’s concerts.
“I would manipulate the effects while playing the guitar, which was a little different than an average guitar player,” Darner said. “After a show, a lot of guys would come up and go, ‘What was that you were doing during the song?’ And I’d be like ‘Oh, it’s a modded guitar a guy back [in Des Moines] helped me make.’”
That was in 2008. Read more
MORE INSIDER CONTENT: See all Business Record insider content and become an insider.
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PEEK INTO THE MAGAZINE
Guest opinion: Tippie embraces virtual reality in business education
Submitted by Jim Chaffee, executive director of learning innovation and technology, University of Iowa’s Tippie College of Business
Virtual reality is changing the world and changing business, two points driven home when I participated in a virtual roundtable in December with Facebook’s technology boss and leading global technology thinker Sir Nick Clegg.
The roundtable brought together representatives from an exclusive group of 15 higher education institutions from around the world that have adopted virtual reality as part of their teaching and research missions. I was invited as the executive director of learning innovation and technology at the University of Iowa’s Tippie College of Business, one of the few business schools in the country that currently use VR for teaching and research.
Wearing a VR headset, I sat in my office in the college’s Pappajohn Business Building in Iowa City and exchanged ideas with participants from all corners of the world. It was clear from our wide-ranging discussion that virtual reality and its cousins, augmented reality and mixed reality, are already making a difference in higher education. We learned about medical students using it to practice surgical skills, law students to practice courtroom speaking and history students to virtually visit important historical sites. Read more
MORE INSIDER CONTENT: See the innovationIOWA Magazine online: Click here.
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BUSINESS RECORD CALENDAR
UPCOMING EVENTS
Oct. 24: Iowa Lean Consortium Annual Conference 2024
The Center for Industrial Research and Service at Iowa State University is hosting the Iowa Lean Consortium Annual Conference, where continuous improvement professionals from all sectors of the economy will gather to exchange insights, explore innovative strategies and advance their continuous improvement practices. For more information and registration, visit the event page.
WHEN: 8 a.m. to 5 p.m.
WHERE: Meadows Event Center, 1 Prairie Meadows Drive, Altoona
View our full calendar to see the latest curated business and community events, or suggest an event.
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