Doing It Right with Malco

An HVACR contractor is only as good as his tools. He might have the technical expertise and the backing of an HVACR dealer who supplies him with the products that he needs, but it takes the right tools to do the job right.

That's what makes Malco Products Inc. so valuable — and not just for contractors. Sure, the company makes tools that are custom-designed for the HVACR contractor. But the Annandale, MN-based company also works closely with wholesaler distributors, helping them effectively market Malco's product line with industry manufacturers and ensuring they are developing the tools to meet the requirements of new HVACR products. Malco is a company that provides value for all of the players in the supply chain.

As the HVACR industry continues to evolve, so, too, does Malco. In fact, that's how Malco came into being. Founder Mark Keymer was working as a steel supply salesman in 1950 when he saw contractors trying to make alterations to sheet metal on job sites without the proper tools. Keymer saw the need for sheet metal tools that contractors could use on-site, and he began to supply them with the tools as well as the sheet metal.

When the industry began to move to forced-air systems, flex duct and duct board became popular; Keymer was nimble enough to develop the tools and accessories for those products. More recently, radiant heat has become a popular alternative, and Malco is there with the tools and accessories for those systems as well. “We're evolving with the different types of heating systems that come into the marketplace,” says Donald Schmidt, Malco's executive vice president.

Left to right: Bruce Berhow, vice president, Operations/Facilities; Paul Hansen, president & CFO; Don Schmidt, executive vice president.

Malco began as a regional company and quickly became a national presence in the HVACR tool market, according to Schmidt. Through a national network of manufacturer reps, Malco had the U.S. market covered by the end of the 1960s. The introduction of a comprehensive and innovative fastener program, branded as Zip-In^® products (which became a signature line for Malco), brought the company to greater prominence in the HVACR industry. “That really helped to catapult us to be thought of as both a tools and fastener supplier,” Schmidt says.

The company today has about 170 associates, who are, in fact, the owners. Malco converted to an ESOP, or Employee Stock Ownership Plan, in 1999. “That helped us organizationally to engage our associates,” says Paul Hansen, Malco's president. As owners, the associates (Hansen points out that they are called associates and not employees) know the financials of the company, which helps them to understand what they need to do to remain successful.

While the Zip-In products stand on their own, Malco has the ability to personalize the packaging with a distributor's logo through digital printing. The co-branding is part of Malco's goal to provide Custom Crafted Solutions^™ for its customers. “HARDI members realize the benefits of the co-branding on this different type of packaging,” Schmidt says.

In addition to making quality tools, Malco works hard to help its distributor customers sell those tools. Malco has helped its distributor customers think more like a retailer than an industrial supply house.