Rochester Business Journal

Q: How did the $25 million order from Northrop Grumman Shipbuilding that was announced last week come about, and is this Graham's largest order from that customer?

A: Graham has worked with the Navy for many years. Actually our company has supplied equipment to the Navy since the 1940s. The contractor constructing the carrier is Northrop Grumman Newport News, and our relationship goes back many years. This particular order is the largest single order for the company; however, the delivery of our equipment will span three to four years.

Q: In addition to the Northrop Grumman order, Graham announced three orders, combined in excess of $9 million, for custom-engineered ejector systems to be installed at new oil refineries in the Middle East and China and equipment for an existing refinery in the United States. Are these contracts signs of a rebound in the marketplace?

A: We believe the refinery markets in Asia, the Middle East and South America are expected to be active. There are a couple very large refining projects that are going forward in the Middle East. China continues to expand its oil-refining capacity. South America is expected to invest heavily in new refining capacity. We also are noticing early indications of a pickup in petrochemical-related activity in international markets.

Q: What geographic areas do you see the most activity coming from in the next year in the refinery market, and how much impact will alternative energy markets have on Graham's top-line growth?

A: It had been, and continues to be, our view that Asian and Middle East markets would lead the recovery for Graham, followed by activity in South America, and then lastly the North America market would recover. Our last three orders announcements of Oct. 30, Nov. 4 and Dec. 18 indicate the work we are winning from our energy and petrochemical markets is largely for international locations. Over the next 12 months we don't expect alternative energy to play a significant role. However, longer term we believe it will remain an important element of our growth strategy.

Q: The company has talked about potential acquisitions. Is that still the case?

A: Yes, acquisition growth is part of our overall growth strategy. We believe energy markets will expand in the coming years, and our acquisition criteria tend to center on how to take fuller advantage of those eventual opportunities. Adding to our existing products and/or expanding our manufacturing footprint are fundamental to our criteria.

12/25/09 (c) 2009 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.