Joshua Dill: Please tell us about your background and how you came to be in your current position.
Randy George: I finished school and started working at T-L Irrigation in 1981, doing production work. I went into the service/spare parts department, and they shipped me to Saudi Arabia. I was 19 years old and had never flown before in my life. I worked there for a month setting up a new dealer with a warehouse, inventory, and stock. Then I came back home, and an Irish/Saudi Arabian company offered me a job. The following February, I went back over to Saudi Arabia on a contract. The company had a hard time finding people and had a bonus system in which you got a 12½ percent bonus your first year, a 25 percent bonus your second year, a 50 percent bonus your third year, and a 75 percent bonus your fourth. If you stayed 5 years, you got a full year’s salary as a bonus. I continued renewing the contract and stayed for 5 years. From there, I transferred with the same company to Georgia, in the United States, where it had set up a huge dairy operation to address the deficit of fresh milk in the Southeast in the late 1980s. We installed center pivots and huge wastewater systems, since the U.S. Environmental Protection Agency was just learning then what to do with all the waste coming off these dairy confinements. I then went back to Saudi Arabia for a second dealer and helped it set up operations in the 1990s after the Gulf War. I stayed for a couple years, and I have been working at T-L Headquarters since 1993. I took over as vice president of international sales in 2001 and am still in that position today.
Joshua Dill: For those who don’t know much about the company, would you give a quick overview of T-L?
Randy George: T-L started in 1955 as a family-owned operation run by a father and two sons. It manufactured aluminum tubes for flood irrigation. In the mid-1960s, due to the high cost of leveling land, center pivots were invented. The first machine was driven by high-pressure water going through turbines. The second machine was electric. The owner of T-L didn’t like electricity and water together, and as he was a mechanical engineer, he designed the first hydrostatic-drive center pivot, which we marketed in 1969 in the United States. We exported our first machine to Saudi Arabia in 1978. Now we export to about 80 countries worldwide.
Joshua Dill: Would you give us an overview of your worldwide business?
Randy George: We started to export to Australia in 1982. We also export to countries in Africa, Asia, South America, and Eastern Europe, including Argentina, New Zealand, Paraguay, Russia, and Uruguay. Argentina used to be a good market, but the peso crashed drastically and there is not much going on there anymore. Sub-Saharan Africa has been a good market for us. We sell a lot of machines to third-world countries because of the simplicity of the hydraulic system. People who can’t read or write can run and service our machines. At the moment, commodity prices are pretty low in the United States and domestic sales are quiet, so we are working hard to gain higher market share in international markets and to open new markets.
Joshua Dill: Do you export full center-pivot systems?
Randy George: Yes. T-L only produces in Hastings, Nebraska. We have no factories overseas.
Joshua Dill: Would you tell us more about the New Zealand market?
Randy George: At the beginning, a big dealer from Australia sold in New Zealand for us. We probably sold our first machine in New Zealand in the mid-1990s. We started setting up independent dealers there in the late 1990s. The majority of our systems are on the South Island, which is relatively flat compared to the North Island. Thousands of our machines have been sold there in the last 15–20 years.
When it comes to irrigation, the easy stuff—the land that has little slope—is already set up with irrigation. Now we’re working on hills. We’re putting pivots on land with a 28 percent slope. Our pivots have probably got the highest standard slope capacity. They can deal with slopes up to 30 percent. That’s pretty steep—a slope like that is difficult to walk up.
The majority of our systems are used on dairy farms. New Zealand is a good producer of milk, and it is relatively close to China, which is a huge market. The strength of the dairy industry has fluctuated over the last 20 years, but it continues to grow. New Zealand and Australia set up their dairy farms in an unusual way. They graze their dairy cows underneath pivots. For the most part, there are few confined dairies where they bring the food to the cows. In New Zealand, they’ll put the pivot point center at the top of the milking parlor, and they’ll have segments out in the pivot area. They’ll just graze their cows and rotate the cows around as they eat up all the forage.
New Zealand has a new prime minister who is skeptical of agriculture. There’s a big push by environmental groups over there to get dairy farmers to keep effluent out of the underground water and the surface water, and to do that, they are forcing them to put slurry into their pivots. There are reasons for concern and they need to have control, but they go over the top a bit. The government is forcing them to install valves that turn off sprinklers when they go over little ponds, roadways, and water tanks, which is expensive, unreliable, and requires complex programming. It’s expensive for those farmers to conform to all the regulations. Twenty years ago, the farmers just dumped the slurry on the ground. They had HDP piping, and underneath the pivot structure, they pumped pure slurry through the machine with tees, where it would hit a disc harrow blade and be dumped on the ground. They weren’t using the nutrients efficiently. Then they started diluting it, filtering it, and putting it on the fields through a proper sprinkler package, which is excellent and also environmentally friendly.
Joshua Dill: Do you have to specially design pivot systems to do that?
Randy George: We have done some special and nonstandard equipment, but the Kiwis like doing things themselves. We’ve got high-profile machines that go over houses and barns and can even have tractors and harvesters run underneath them. There are multiple reasons to use a high-profile machine, but there is lots of wind in New Zealand. A few years ago, 800 machines were blown over in one big storm. Customers and dealers have tried to design antiwind systems to attach to our pivots. One was a bag filled with water that dropped from the span. Another big customer with 30 machines designed a wind foil that put downward pressure on the axle of the pivot to keep it from blowing over. I don’t know if he’s ever tested it. Some guys would go out with battery-operated screw guns and anchor the axles with anchor screws. Most would do that for about 4–5 high wind warnings and then abandon it because of the additional work involved.
Joshua Dill: How do T-L’s global markets differ from each other?
Randy George: Every market is a little bit different. Some governments promote agriculture with subsidies or low-interest loans, whereas other governments don’t have the cash to do that and rely on the World Bank or the U.S. Agency for International Development for funds to build up agriculture.
There are protests around the world for all sorts of reasons. The worst thing that a government in Africa can have is hungry people. The big drought in the United States in 2012 resulted in skyrocketing prices for commodities. If commodity prices were double here, they were triple by the time the food was shipped across the Atlantic. Social media travels fast. If you want to get an uprising or protest started, you can do it in minutes now with a cell phone. Public unrest causes chaos and even civil war. No one will invest in irrigation with a civil war going on.
Joshua Dill: How does intellectual property theft affect T-L’s business?
Randy George: It started in 2008 when the Chinese government set up a tender to all U.S. pivot manufacturers, and we all bid on them and sold quite a few machines in 2008, 2009, and 2010. In 2011, it said, “Thank you very much, there is now a 25 percent duty on pivots coming in.” Basically, the Chinese manufacturers had set up factories and copied pretty much everybody. Fortunately, T-L wasn’t among them, because our hydrostatic drive system is unique and difficult to copy, whereas an electric pivot simply involves a center drive, a couple of microswitches, a contactor, and a motor. Most of the Chinese manufacturers copied the structure from U.S. companies. I haven’t been to China since they put the import duty on us, but I have heard the market crashed from 5,000 systems sold per year to 1,000. Two U.S. manufacturers have factories over there, and they are exporting a lot of their machines because, from what I understand, they have to wait 2 years to get paid by the Chinese government. The Chinese companies that copied the U.S. systems are trying to survive by selling in first-world rather than third-world countries. However, they state that any parts and service can come from your U.S.-backed dealer since everything is interchangeable. They have no inventory and no service department to back them up. No overheads!
Joshua Dill: Is there legal recourse for these companies to object to that?
Randy George: I don’t think so. I don’t think a patent means anything in China. You could spend a million dollars defending a U.S. patent, but would you gain anything?
Joshua Dill: Can countries like New Zealand or Australia do anything about pirated systems being sold there?
Randy George: As long as the machines are up to code, I don’t think so.
Joshua Dill: To what extent are other companies becoming competitors on the global market?
Randy George: The Europeans have been manufacturing pivots for over 20 years. The Austrian company Bauer is aggressive worldwide. It tweaks its machine a little bit, but all the technology comes from the United States. It is riding off our research and development. When the U.S. government put sanctions on South Africa in 1988, that country became self-sufficient and started manufacturing its own pivots, which were copies of U.S. products. Today, they’re still in business. There are manufacturers in Argentina, Austria, Brazil, France, Italy, Portugal, Russia, and Spain, and 15–20 of them in China.
Joshua Dill: Do those companies ever try to market in the United States?
Randy George: I heard that the French company Otech was selling in Québec and that Rain Fine from China was trying to promote on the West Coast of the United States. That may or may not change with the import duties that President Trump is trying to get in place.
Joshua Dill: What are T-L’s plans for international sales going into the future?
Randy George: The company leadership is pushing us to boost exports anywhere the opportunity arises. Unless some of these third-world countries start subsidizing and promoting agriculture with low-interest loans or subsidies of some sort, the development of irrigation will be slow. However, as third-world countries see the benefits and food security that our systems provide, the markets will grow.