Dallas-based PVF manufacturer-distributor Titus Industrial has a different type of business model.

For one, the company has no warehouses or unsold stock. “We are not your traditional PVF company,” 31-year-old Titus Industrial CEO Max Farley says. “We have deliberate partnerships with warehouses nationwide as well as overseas. In Dallas alone, we have more than 1.3 million square feet with more than 5,800 pallet positions and there isn’t one item unsold. We buck the norm on traditional PVF distribution. Our lean operation allows us to reinvest our cost savings into a quality-assurance program.”

Titus flourishes as a progressive PVF manufacturer and distributor for large or small retailers who consume the company’s forged steel, FunkLok fittings and couplings, hammer unions, pipe nipples, ball valves, black-malleable iron, oil country tubular goods, fasteners and flanges. “It’s a very unique business,” Farley says. “We’re disruptive. We have high-quality products with a different business model at a fundamentally lower cost.”

Farley explains Titus focuses on creating strategic partnerships in each region, building relationships where Titus becomes the retailers’ go-to PVF source. “We choose retailers to act as our distributor and then work on fostering demand through end-user adoption,” he notes.

Farley cites the example of west Texas-based RK Pump and Supply. “They have 14 locations and a 100,000-square-foot distribution center along with a 15-acre pipe yard stocked with Titus products,” he says. “We have an entire sales team and engineering team dedicated to getting in front of their customers.

“Our goal is to educate end users on Titus quality, safety and price-value proposition to pull in demand through our retail partners. Whether it’s in west Texas, the Rockies or North Dakota, we unleash our team to get products approved by the largest producers in each region. We increase demand for Titus product through end-user adoption. That’s been our roadmap to success the last two years.”

How it started

Titus was born in a downturn, hatched in 2015 by Farley and three other investment founders. The group used the first two years to build in-the-field relationships with its overseas manufacturing partners. The as-its-known-today Titus launched in 2016. Private equity invested in the company last September.

“Chaos is opportunity,” Farley says. “With commodity prices cratering, we decided to jump in headfirst and build an oilfield manufacturing, supply chain and distribution business from scratch. We didn’t know what that meant at the time. It was four guys sitting around the table and throwing crap against the wall and watching what sticks.”

Farley points out two key areas the company wanted to “attack” at the onset. “There was a tremendous amount of friction in the incumbent supply chain that wasn’t creating value for the end customer,” he explains. “There was a set of goods within the PVF market that was completely disregarded in terms of quality. Quality assurance was starting at the distributor’s warehouse and not at the manufacturing level. Once we identified those two areas, we built Titus to remedy the gaps and we’ve been holding on for dear life ever since.”

The quality part of the puzzle is something Titus zeroed in on in particular, rolling out an in-depth strategy to make sure its customers get the highest-quality product possible. Titus’ quality assurance and engineering departments are led by multiple professional engineers with extensive manufacturing experience in the sub-sea production equipment sector, Farley notes.

“We want to push quality control as upstream into the supply chain as possible to ensure field functionality for every Titus item,” Farley says. “Quality control has to be proactive instead of reactive. You can’t tell an end user to run a pressure test once in the field and let the manufacturer know if it works. You can’t control quality unless you control every step from raw material to finished product. At Titus, we are the new kid on the block. We have to create a value wedge to our customers and end users to succeed — that starts and ends with quality.”

Farley notes Titus products are manufactured in the company’s exclusive facilities where they undergo what he terms “an unrivaled quality assurance methodology including metallurgical testing and proof and pressure testing on every heat code of every production run.” Titus provides the test results and inspection results from every order to bring transparency and confidence to its quality-assurance and quality-control processes.

“As a manufacturer, by the time you load up the product in a crate or container it’s either going to work or it isn’t,” he says. “It’s all about quality and safety. Our products are running 1,000-15,000-plus psi through them. You are talking about people getting hurt or dying if they malfunction. We don’t put our head on our pillow knowing we always have an insurance umbrella to fall back on. We sleep well knowing we have tested every production run to ensure field functionality for our end customer.”

Titus has more than 20 quality-control employees based in two offices overseas and an engineering team in the U.S. Titus creates all its manufacturing drawings and runs finite element analysis on each product design prior to manufacturing. “We observed huge gaps in quality assurance and we saw that as an opportunity,” Farley says. “You only have one shot to make a good product. If you don’t have feet on the street and over-invest in quality control, you are dead in the water.”

Blueprint for the future

In a commodity-driven industry, Titus has no interest in competing on price alone. “There is no winner in a price war. Best price is not a sticky value proposition,” Farley says. “Being undercut in terms of pricing is inevitable. Someone will always come in willing to lose money on an order, but a better product resonates with producers and drillers, especially in this market.”

While business has been beyond strong — Farley states the company grew sales 400% in 2017 and is on pace for another 250-300% increase this year — it has been anything but smooth sailing.

“We’ve encountered some backlash,” Farley says. “It’s a tough market out there. We’re a young organization and are disruptive to the status-quo in this industry. That is never easy. In the Permian Basin, 99 out of 100 retailers gave us the same line, ‘Listen son, we love the product and pitch, but we’ve been doing this for 20 years and we’re not changing.’ We just needed one guy to give us a shot and it’s been a domino effect. Retailers can buy from us and resell to their customers at a cheaper price than competitors can buy. They are keeping business away from competitors using Titus product and standing behind our value proposition of better quality and better price.”

As with all young companies, the name of the game going forward is continued growth. “We would like to expand our footprint with retailers from south Texas to North Dakota to California,” Farley says. “We have strong end users and strong retail partners. We want to grow this as big and quick as we can with product development and expansion and see where it leads.

“We will continue to go out and earn market share every chance we can get. At the end of the day, we want to change the mindset and behavior of how retailers think through purchase items and how end users perceive quality on lower-priced goods. Price and quality are not enemies. We are evangelizing that value proposition to the end user and the retailer from coast to coast.”

This article was originally titled “Disruptive PVF” in the April 2018 print edition of Supply House Times.