Spire Power Solutions CEO Justin Smith explains how the company has built a platform for growth with a view to supporting the power grid of the future.
In November 2019, three companies with over 100 years of combined experience—Pioneer Transformers, Power Partners, and Jefferson Electric—came together to form a new enterprise, Spire Power Solutions. Spire is a leading North American manufacturer of transmission and distribution solutions including liquid-filled and dry-type transformers that serve the utility, public power, renewable energy, construction, industrial, and OEM markets and is known across the industry for safe, high quality, reliable products and exceptional engineering capability.
“When Spire came together, we merged three businesses that served various end markets and put them under one umbrella to create the platform we have today,” Justin Smith, who was appointed CEO of the newly formed company in November 2019, told CEO North America in an exclusive interview. “We are now one of the largest transmission and distribution suppliers in North America.”
IDENTIFYING OPPORTUNITIES FOR GROWTH
“We identified a value creation and growth plan that included five key levers to drive growth over the next 3-5 years,” Smith commented on the early days of the organization. “This included expanding our market presence in high growth end markets such as renewables, investment in new products and capacity, such as liquid filled pad-mount transformers; optimizing and standardizing the operational footprint of our sites with a lean manufacturing foundation, driving procurement synergy, and executing on potential M&A activity that aligns with our growth strategy.”
Commenting on the liquid filled pad mount growth investment, Smith elaborated, “We launched our single-phase liquid filled pad-mount product in 2019 to the U.S. market and we’ve seen a tremendous reception to that. We aim to grow our capacity on that product offering by five times in the next 12 months. In addition, we will be entering the U.S. three-phase liquid filled pad-mount market by Q1 2022 and we view that as a $750 million to $1 billion market in the U.S. alone. This also supports our expansion into renewable energy applications. Our project work on wind and solar applications has grown significantly and we recently partnered with our first renewable energy customer.”
THE SPIRE BRAND
In November 2019, as what is now the Spire platform really began taking shape, Smith says his team needed to evaluate how they wanted to position themselves in the market. At the time Spire was three different businesses that shared a common industry with somewhat separate go-to market strategies. Each of the three businesses had been very successful over time, with well-recognized brands, but to move forward the Spire team needed one brand identity.
“Externally, we needed to step back and think about how we could rebrand this business as one, so when we go to market, we have a cohesive identity and are able to present our full range of offerings,” Smith commented. “That is how Spire came to be. Now that we have rebranded and completed the integration process, we have the horsepower and product portfolio of all three brands working together, and that makes us a very well positioned and focused company.”
A NEW ADDITION TO THE FAMILY
With the Spire brand now on the market, Smith and his team were also able to add a new member to the Spire family with a much welcome acquisition. In August 2021, Spire announced that it had acquired the assets of V&F Transformer Corporation, a leading manufacturer of custom dry-type transformers and magnetic components for electrical power management and power distribution equipment in high-growth end markets including Data Centers, Electric Vehicle/Battery, and Industrial Automation with an engineering first approach.
“We were thrilled to be able to complete the acquisition of V&F and welcome the V&F team to Spire,” Smith commented. “This acquisition is very complementary to our platform and product offerings and was the kind of inorganic opportunity that instantly made us an even stronger player in high growth end markets, including data centers and electric vehicle applications. It aligned with our overall growth strategy.”
STRONG TEAM & OPERATING CADENCE
With order rates in the industry higher than they have been in the last decade and Spire Power planning to deploy further capital this year to meet demand for both single-phase and three-phrase liquid filled pad-mount transformers, the Spire team also concentrated on implementing a lean manufacturing focus at the company with a view to building a genuinely world class organization.
“The first improvement we tried to make out of the gate was looking at how to leverage the best practices from each business and how to continue to accelerate that moving into the future,” Smith explained. “The leadership team and the organization overall have a very strong lean manufacturing focus. Our foundation is in safety, quality, delivery, and cost. We manage this through key performance metrics and drive root cause and corrective action when there are issues. That sets the tone for how we operate every day.
“To be honest with you, I’m really proud of the team we have. I believe we have one of the best teams in the industry. That’s both our strongest differentiator and the key component of our success and future growth.”
According to Smith, another benefit of the Spire platform has been the deep and longstanding partnerships that already existed among the company’s customer and supply base. On the customer side, Spire has deep relationships with large OEM customers and distributors in the dry-type transformer business and long-standing partnerships with most of the large utilities on the liquid-filled transformer side.
“Part of our value proposition is our ability to execute, deliver and have the ability to react quickly when there are emergency events such as hurricanes or other weather-related emergencies that require ultra-short lead times,” Smith explained. “We’re known for the safety and quality of our products, but also have a great reputation in terms of our overall customer service and customer experience.”
With a view to improving the company’s supply chain, Smith said he and his team have done a lot of work consolidating spend and developing new supplier relationships to enable success. “Our biggest spend each year is on major commodities such as electrical, steel, copper, aluminum, mineral, soy-based oil, and carbon steel,” he commented. “One of the most important things with respect to our supply chain has been developing more sources of supply so we aren’t constrained to one supplier. The team has done a great job developing additional partners to de-risk our supplier portfolio.
“This year has been a challenging year from an overall supply chain perspective with additional pressure from rising commodity indices. We have had to work even harder to minimize the impact to our customer base and ensure product supply. Our key suppliers have really stepped up, which is a good indicator of the strength of the partnerships we have.”
Smith views Spire Power as a company that is thinking big, and he believes they can play a key role in how utilities operate in the future amid a changing energy industry and increasingly complex infrastructure challenges. For example, hurricanes and other natural disaster events continue to increase in volume and intensity. Following the damage caused by major hurricanes in the last five years and the upheaval of the COVID-19 pandemic, Smith cited the need for an ever more resilient power grid to address such emergencies and meet consumer demand.
“When you look at recent weather events, the pandemic lockdown, and increasing demand for energy, it’s putting a lot of stress on the grid,” he stressed. “It’s making people think about how we can harden the grid and our infrastructure in general. Spire’s products play a key role in this solution and we continue to partner with utilities and others on grid hardening, grid upgrades, and other infrastructure upgrades.”
“Spire is focused on supporting the grid of the future,” Smith concluded. “We are and will continue to be a preferred partner on infrastructure upgrades, grid hardening efforts, renewable energy projects, and innovation with respect to product safety. We have a tremendous team that do great things every day. Spire is and will continue to be a key player in the power grid of the future.”
By Anthony Moran