Heatec Launches an Ambitious Five-Year Growth Plan

Written by Nate Hendley

“We make heaters, tanks and related equipment for asphalt plants. We also make heaters and related equipment for asphalt terminals and heaters for other industries: oil and gas, food –things like that,” explains Jerry Vantrease, construction sales manager at Heatec.
Heatec has a manufacturing plant and office in Chattanooga, Tennessee, a global presence and an ambitious plan to hit $100 million in revenue within a few years. The company’s big focus is asphalt. To this end, Heatec manufactures asphalt equipment and helps construct facilities to store it.

With the exception of motors and a few other parts, “we make everything here. We build everything from scratch. I don’t think we have any competition that does all of that. We can do everything,” adds Vantrease, proudly.

Heatec is a subsidiary of Chattanooga-based parent company Astec Industries Inc. which controls several other firms as well. Heaters made by Heatec are primarily used for heating gases and liquids, while the tanks it makes are largely used for storing and mixing liquids. Replacement parts and in-field support is also available. Heatec does not sell equipment from other companies, preferring to stick with its own line of products.

In addition to making heaters and tanks, the company is involved in the construction of asphalt storage terminals and asphalt emulsion plants. Heatec has an engineering department that can do mechanical design, electrical engineering work and other tasks. It also assists with equipment installation, when asked.

The company’s heaters and tanks are used by hot mix asphalt plants, oil and gas producers, producers of wood products, roofing plants, ship and barge manufacturers, chemical and petrochemical producers, asphalt terminals, power plants, emulsion plants and food processors. Of these segments, the asphalt sector is the largest. Key customers include construction companies that build roads and require large amounts of asphalt. Heatec products not intended for road construction purposes are classified as ‘industrial’ goods and include such things as vaporizers, heat recovery units and heaters. The company also sells high-tech control systems.

A few years ago, the oil and gas segment of Heatec’s business was booming, thanks to high fuel prices. Then the price of fuel drastically declined, and that portion likewise deflated. Right now, company officials are excited about road-building legislation in the United States that will ultimately benefit the asphalt industry.

While based in Tennessee, Heatec has an international sales force and sells its products all over the world. Vantrease estimates the company has a presence in roughly fifty countries at present.

Heatec, like its parent company, traces its roots to the early 1970s. The company originally designed and fabricated asphalt storage tanks and heaters for plants run by Astec. In 1977, Astec moved the heater and tank manufacturing to a separate location at which point it became officially known as Heatec.

At present, Heatec has 250 employees in the United States. Astec has “about 4,000,” says Vantrease. While Heatec has a global sales force, installation and service support is arranged from company headquarters.

Heatec’s workload both around the world and in the US varies from year to year, depending on local economies and budgets. In the US, “some states have a lot of money one year; next year they don’t have much. At this time, it appears that for us the Northeast is a pretty hot area right now.”

While workload might oscillate and different market segments expand or contract, the company’s overall bottom-line is solid. Heatec embarked on a five-year plan to boost annual revenues to twice what they are now. Vantrease thinks this is entirely doable, based on increased international business and sales of industrial products such as heaters. Certainly, the short-term prognosis is good; company officials predict revenues will rise ten percent in 2017.

Heatec continues to innovate and introduce new products. “The biggest thing we’re doing right now is in the controls area. We have staff programmers here. Most of the equipment that goes out now is automated to some degree. That requires code, [programmable logic controllers], things of that nature. The latest thing that we came out with was an Internet-based program called Recon.”

The Recon program allows asphalt companies to check the status of the heaters or tanks at an asphalt terminal using a computer, tablet or a smart phone where mobile service is available. Recon was released in January 2016. The company also has products for fracking, including portable rigs designed to heat water used in the fracking process to drill for oil or gas.

Heatec has been part of some noteworthy projects. The company recently completed work on an asphalt emulsion plant for BCI Materials of Charlotte, North Carolina and an asphalt terminal for C.W. Matthews in Rockmart, Georgia. The C.W. Matthews project was the largest Heatec has ever undertaken.
Vantrease points to the full-service aspect of the firm as part of makes Heatec unique. “Another thing, when people come to us and want a [product], there’s usually other things involved. I think what separates us from our competition, we design a system around that product, and that’s what we offer to our customer. Our competition would just sell the product … We do package solutions. So even a heater comes packaged with pumps and piping and all the things that might go with it. It’s not just a plain heater. On an asphalt terminal [we offer] a total package of equipment. It’s not just a piece here and a piece there,” he states.

Quality control is paramount. “We probably have twenty different [quality] codes that we work off. They are tank codes, heater codes, etc. All those you have to get approval for. We have food codes as well because we make a heater that heats water for the food industry,” says Vantrease.

Along with quality, safety is an important issue. The company recently invested $1 million in an addition to its plant, containing three classrooms for employee education purposes, including safety training. Employees go through safety training four times a year, learning about the hazards of flammable liquids or flammable products, among other things. Occupational Safety and Health Administration (OSHA) standards are adhered to.

“Safety is one of the biggest concerns of our company,” says Vantrease, adding that the company gives plant employees a bonus if they reach safety targets. “I don’t recall since I’ve been here that we’ve not gotten the bonus.”

Of Heatec’s 250 employees, roughly 200 are shop-floor workers. Most of the latter are welders. In terms of office staff, “it’s no different than any other office. You’ve got your accounting and engineering department … [we want] people with an engineering background, some kind of heating background if possible. From a sales standpoint – which is what I hire for – I want people that can sell. I can teach them our products but can’t teach how to sell.”

Vantrease says Heatec’s corporate culture is reflected in the core values shared by all of Astec’s companies, even though the companies operate independently.

The company likes to work with vendors in a preferred supplier arrangement. If the vendor proves it can provide the level of support Heatec requires, “we do try to stick with them,” explains Vantrease.

Heatec promotes itself through advertisements in construction asphalt magazines and other trade publications. As it has an established reputation in the asphalt sector, the company does not need to do much general advertising to market its services and products. That said, the company is getting more into social media and also takes part in industry trade shows.

Vantrease says he can envision the company’s international business increasing to become half its business within a few years.

As for the present, the company is currently facing a major opportunity: “There’s an awful big demand right now for asphalt products,” notes Vantrease. The challenge for Heatec moving forward is to meet this demand and achieve the high revenue benchmark it set in its five-year plan.



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