A multiplying effect on manufacturing

Sukup capitalizes on growth opportunities with Ramco acquisition and new innovation arm

By Sarah diehn

After seven years of developing a new technology product for Sukup Manufacturing Co.’s customers, President Steve Sukup decided it was time to find and dedicate the resources to bring it to market.

Emily Schmitt, Sukup’s chief administrative officer, said the family-owned manufacturer built the technology better than what they could buy from another company, but they needed a leader in automation to help execute.

“We have a great labor force, but going into the tech industry, we needed some more resources,” Schmitt said in an August interview with the Business Record.

Steve Sukup said as acquisitions became a “hot market” in the last five to 10 years, he wanted their acquisition to strengthen the company’s core business and add value for customers.

“We’ve watched competitors, and we can’t say that we really saw anybody that did a successful acquisition. … We wanted to learn [and] say, ‘OK, what do we want to do right with our acquisition?’” he said.

They found the right match in Ramco Innovations, another 60-year-old company. Sukup already had a relationship with the West Des Moines-based factory automation distributor as a customer, collaborating on efficiencies and automations for its plants.

Now, Sukup wants to bring automation from the factory floor to the farm.

The acquisition, which was announced in December, formed Sukup Innovations, a new entity that oversees new product development at Sukup, Ramco and Maple Studios, a space on Ramco’s campus for industrial technology startups. 

Ramco CEO Hank Norem is leading Sukup Innovations as chief innovation officer. He said he was initially curious when the company reached out to discuss launching an innovation arm.

“Ramco has been in existence for over 60 years [and] evolved and grown over time. Thinking about what that next step looked like seemed like a great opportunity to partner with another 60-year-old business that’s got a large footprint and additional capabilities,” Norem said.

Sukup Innovations will focus on the launch of its new product in the coming months, Norem said, but it will also serve as an outlet to vet new technologies.

He said establishing Sukup Innovations signals a continued commitment to innovation from the 61-year-old manufacturer of grain drying, storage and handling equipment.

“Sukup’s always been an innovative company but this really puts a stamp on it to say, ‘I’m going to lead this innovation charge and look at emerging technologies,’ [and] harness what we’re already doing and try to continue development along the way, so that could include Sukup, Ramco [and] Maple Studios, all innovation efforts through there,” he said.

Steve Sukup said Ramco and Sukup’s joining forces poses a multiplier opportunity for Iowa’s manufacturing industry. 

“I think the combination is going to be a multiple. It’s exponential, not just adding to it,” Steve Sukup said. “That’s what we matched up well with Hank on is he wants to [say] how can we leverage everything to grow faster, provide better products … it’s one that we both can tell the same story.”

Setting up Sukup Innovations

The two Iowa-based companies have built their businesses on trust and embraced innovation, the leaders said.

Sukup started in 1963 with Eugene Sukup’s invention of a system to keep grain from overheating and spoiling. Schmitt said the entrepreneurial mindset the company was founded on never left, and innovating is synonymous with staying competitive and adding new value to customers. 

Steve Sukup said the relationships they’ve built with their dealers and customers has positioned them to understand farmers’ needs and gain their trust as they test new ideas.

“They want us leading out there, and it’s always when is it good enough to bring to the market?” he said.

Employing over 800 workers worldwide, Sukup has expanded its presence in Iowa in addition to its global footprint. It operates a 1-million-square-foot facility at its headquarters in Sheffield, facilities in Manly, Clear Lake and Hampton, as well as an Ames office that opened in 2017.

Ramco, founded in 1962 by Tom and Marj Ramsey, started as an electrical supply distributor and began to focus on selling and servicing higher-tech products in the 1960s when solid-state electronics became more popular, according to the company’s website. 

Today, the company designs, assembles and installs automation applications, including industrial robots, in addition to its industrial electrical components business. It has operations in Nebraska, Kansas, Illinois and Missouri.

As the companies start to integrate offices and teams, their locations complement each other with Sukup covering more rural parts of the Midwest and Ramco concentrated in urban areas. 

They have also each gathered decades worth of business lessons and best practices to exchange. Norem said the open-mindedness of both businesses allows Sukup Innovations to easily try a new process or idea.

“Sukup [is] quick to adopt,” he said. “That’s been really exciting to see and it’s been very comforting for the Ramco and the Sukup folks because that adoption of new ideas has really [been embraced] bi-directionally with the two companies.” 

Ramco brings a strong understanding of the agriculture industry from its client base, but its knowledge of related industries has applications at Sukup as well, Norem said. 

It also has a look into emerging industrial technologies through Maple Studios, a startup studio launched in 2018 on Ramco’s campus. Norem said the formation of Sukup Innovations will help identify solutions that could “plug in” to Sukup or Ramco.

“Maple Studios is going to help serve as a pipeline of emerging technology to Ramco or Sukup and vice versa. If there are certain technologies that Sukup senior leadership wants to review, they can have that done through Maple Studios,” Norem said.

Between Sheffield, Ames and now Ramco’s office in the Des Moines area, Sukup has a presence along much of Interstate 35. Norem said Sukup Innovations has built out teams and lab space in all three locations to expedite progress on Sukup’s investment.

He said the long-term strategic investments Sukup is capable of as a family-owned, privately held company helped make new investments like Sukup Innovations possible.

Sukup Innovations’ team is a mix of new hires and existing workforce from Sukup and Ramco, with plans to add. 

Steve Sukup said with the current economic challenges in the agriculture industry, including almost 4,700 layoffs reported at companies tied to agriculture so far in 2024, strategic growth across the company is on the manufacturer’s radar. 

“Hank is exploring the expertise that’s across the industry of who we can bring in. We do have a goal of bringing in a number of individuals in some areas that we haven’t touched [before],” Sukup said.

Sukup’s locations along Interstate 35 could help Iowa retain highly skilled technology talent, Norem said.

“As we’re recruiting and walking folks through … they know that they have a place to grow here amongst those three campuses,” he said.

Schmitt said with the addition of Ramco’s location, Sukup has started to have success with recruiting former employees who moved to the Des Moines area.

She said she thinks the company’s growth in Iowa and culture helps attract new employees. 

“We’re building out an Iowa footprint because we do have the resources and people in Iowa and I think that’s what they’re recognizing. … People want to know who they’re working with. [At] bigger companies, it gets lost in the fold, so I think that high-touch employee culture is key. Ramco had that culture already. We have that culture and want to keep it,” she said.

Norem said less than a year since the acquisition, Sukup Innovations has also garnered attention from outside parties interested in partnering. 

“Our state’s very supportive of industrial innovative companies, and with these two coming together, we feel like we’re going to fast track development,” he said. “Sukup’s going to help Ramco go faster. Ramco’s going to help Sukup go faster. Together it really is a one-plus-one-equals-three equation.”

Taking up more space in the market

Sukup has leveraged Ramco’s expertise in industrial automation to launch a new automation platform called Synk, the product Sukup was developing before the acquisition.

Synk is named to tie in with Sukup’s name and reference the way it will help farmers sync and manage their operations from one place.

Schmitt said ownership of land has consolidated over the years, so fewer landowners have more fields to manage in different locations. 

“Being able to sync up the different locations from your main location is a huge value because … grain management is the most important to get the value at the co-op or ethanol plant and to prevent any safety issues that arise when you don’t manage your grain,” she said.

The product will roll out in phases, Norem said, starting with grain bin monitoring.

Steve Sukup said he believes Synk will make a “lasting impression” among competing products because it was developed internally and is based on customer needs. 

“We were able to bring some of the expertise from inside but we still recognized we needed a little bit of the adrenaline or something else to say, ‘OK, how do we get it to the next level?’” he said.

Norem said Sukup’s solution will be comprehensive whereas others are more “piecemeal.”

The technology is also shaped by Sukup’s knowledge of the industry and its customers, Schmitt said.

“We know the farmers, we know the dealers, we know the people using it, so it’s not just buying a startup [and] what they think the solutions are,” she said. “It’s going to be our mindset because … we have that direct access where the other competitors are not there.”

Steve Sukup said both Synk and Sukup Innovations are opportunities for the company to take up more space as competitors pull back due to the downturn in the agriculture market.

The company is not experiencing the same negative effects as other agricultural manufacturers for several reasons, he said.

In the last five to 10 years, the company concentrated on providing value to the growing number of commercial farms. He said orders have stayed “steady” because of the investment in that segment.

“Generally, for our business, we like bushels. … and the commercial individuals like lots of bushels too, so they’re generally investing as [if] they have to handle more bushels this year than last year,” he said. 

Sukup’s products like grain dryers are a long-term investment that can help farmers keep their grain in good condition to sell when prices are favorable. 

“They can make money with our product every year, so the mindset and the sales approach is different for us than some of the other ag manufacturers,” he said.

He said if the current conditions in agriculture persist for two to three years that would mark a trend, but Sukup’s customers are willing to withstand some volatility to get the best prices possible.

With more disruption, both farmer and commercial customers are planning in advance more than they used to, Schmitt said.

In the future, Synk could play a role in long-term planning by helping customers make data-based decisions, Norem said. 

Steve Sukup said the uncertainty makes the pace of growth and innovation more important.

“I think expediency pushes more of it [because] you don’t know what storm is coming,” he said.

Norem said the strength of Sukup’s position allows Sukup Innovations to stay fixed on building Synk and driving innovation. 

“Eighty percent of Sukup’s revenue comes from products that didn’t exist 20 years ago,” Norem said. “That just proves the innovation mindset at Sukup and so this goal is to do it again. … We need to repeat that. We have to keep innovating to stay competitive and to add value to the farmer.”