As global populations rise and the middle class emerges in developing countries like China, India, Brazil and others, the demand for food is increasing. As countries clear more land and improve farming practices, they are increasing the use of fertilizer, which has helped drive the demand for pot ash, a mined mineral that is a raw ingredient in many fertilizers.
There are two significant manufacturers of compaction, milling and flaking equipment used in pot ash extraction and processing – one of them is a German company, and the other is Ludman Machine Co. LLC, based in Muskego.
Jim Lenahan bought the company on April 1 and is now serving as its president.
After a little more than a month of owning Ludman, Lenahan has already hired two new employees in its engineering department and is working to double the size of its production space because of the demand for its products.
“With the emerging markets in the world wanting better food and growing conditions, there has been explosive growth in the fertilizer business sector,” Lenahan said. “Pot ash is a big ingredient in that.”
Lenahan was formerly president and CEO of Aries Industries Inc., a Waukesha manufacturer of inspection equipment for sewers, tunnels and mines. He left Aries in November, seeking new opportunities, and quickly focused on acquiring Ludman.
Terms of the acquisition were not disclosed. Lenahan was represented in the transaction by Corporate Finance Advisors and Tom Meyers of Reinhart Boerner Van Dueren S.C.
Robert Wendelbrg, former owner of Ludman Machine Co., was represented by Tom Kintis, president of CGK Investment Banking.
Milwaukee-based Park Bank provided funding for the transaction.
“This was a good fit for me. I’ve been in the underground business for most of my career,” Lenahan said. “I could understand the business from the get-go. This was a sleepy business for a long time. It’s taken off because of the pot ash and fertilizer industries.”
The company’s orders have increased dramatically in recent years, to the point that it has a two year backlog. It recently received a new $9 million order, which it is not scheduled to begin delivery on for at least 18 months.
Today, Ludman Machine has about 20 employees and occupies a 22,000-square-foot facility in Muskego’s industrial park. The company will likely add at least 10 more employees over the next year.
It will also need to significantly grow its physical space. Lenahan has retained an architect to design an expansion of its Muskego facility that would give the company about 55,000 square feet of space. The company will also look at other facilities that have taller ceilings and increased crane capacities in the Milwaukee area.
“The equipment that we make is becoming larger and heavier,” Lenahan said. “Some of our machines are more than 140,000 pounds. We need (more) height and crane capacity. Those are our two biggest issues now.”
Ludman Machine Co. will also need to expand its sales to other markets, Lenahan said.
“Pot ash has been a big focus for us, and we’ll broaden out,” he said. “We’ll get into food processing, Quaker Oats has a lot of our machines, and there a lot of other businesses out there that we aren’t focused on now.”
