It Takes Perseverance and the Right Technology in the Oil Patch
Starting out small--really small--and then growing rapidly involves risk, courage, perseverance and the right machining technology. Meet a Texan who's traveled that path.
David Kulbeth, president of Kalco Machine and Manufacturing Co. (KM&M; Wichita Falls, TX), says the company started out in 1998 as a one-man operation in a 2000-ft² (183-m²) shop with two manual lathes and a manual mill. Today KM&M has 70 employees at three locations in 51,500 ft² (4790 m²) and will probably have sales of about $9.2 million this year.
Here’s how that journey happened, Kulbeth said: “What got me started in this business was I had a brother who was 18 years older than me, and he worked for the Halliburton plant in Duncan, OK. He broke off and started a machine shop in 1974, and when I turned 13 I would work in his shop every summer for three months. So actually I started doing this when I was about 13.
“Then there were some significant downturns in the early 1980s, and it was a horrible time to be in this profession. You couldn’t find a job as a machinist anywhere around here, so I did what I had to do until things picked up. I moved from Duncan to Wichita Falls, Texas, where I became a production manager at a shop for about 10 years.
“My wife had a business that sold blinds, drapes and carpet, that sort of thing, and she was working 50–60 hours a week, so I gave a one-year notice where I was working, and after a year I quit to go to work and help my wife in the retail store. I did that for about a year, but it just wasn’t for me.”
Kulbeth recalled that he was reading the Sunday paper and came across an ad for a 2000-ft² machine shop on 10 acres (4 hectares), and, in 1998, this became the birthplace of KM&M. The shop’s original owner had been machining as a hobby. He had a couple of manual lathes and a manual mill. The owner passed away, and his wife just wanted to get rid of it all, and Kulbeth thought he “might take a look at that and see if I can buy it cheap enough, and then I’ll sell all the equipment and I’ll have that building on the 10 acres left over.”
Then, as entrepreneurs often do, he rethought his strategy. “What if I don’t do that,” he said, “but run it as is for a couple years?” He started up KM&M in a building with no running water or telephone. He had to haul 55-gal (209-l) barrels of water to mix the coolant. Bathroom facilities? A Port-a-Potty outside. “We started out pretty primitive, I guess,” he said. “We didn’t even have a forklift for the whole time I was at that location. We built this little stand that we could slide a pallet on, load the parts, wrap it, back up to it and shove it off into the back of a pickup truck. I believe this is called ‘roughing it’, and we definitely did that.”
By the end of 1999 KM&M was up to six employees and acquired its first CNC machines—a vertical machining center and a small lathe. In late 2002 they moved to their current location on Shepard Access Rd., a 5000-ft² (465-m²) building. In 2004, 4000 ft² (372-m²) was added to the Shepard Access Rd. building. In July of 2007 Kulbeth formed a partnership with Charles Donnell, and they launched a company called Affiliated Energy Products Inc. (AEP) with seven skilled machinists. At that time they built another 5000-ft² facility behind the existing facility, for a total of 14,000 ft² (1302 m²) under roof at the site. The start of the partnership also saw the purchase of two Hyundai WIA machines, an SKT 28L and an SKT 25. At present KM&M has 12 Hyundai machines, out of a total of 24 CNC machines. The most recent acquisitions were purchased all within the last seven months, and include an L400LMC, an LV800M vertical lathe, an L250MS and an SKT21LMS. The LV800 vertical lathe was for a new oil and gas application.
In the past six months the company has gone from a 14,000-ft² footprint to 51,500 ft². They have acquired two additional locations, one just a couple of blocks from the Shepard Access Rd. facility and the other about 10 miles away.
“We are currently about 80% oil patch,” Kulbeth said. “The frac pumping industry has slowed down quite a bit because of an overcapacity of pumps. It’s not because they’re not still drilling and fracking wells, it’s just that there’s so much equipment out and no one needs new equipment, for what looks like at least a year. I think we’re going to start working with Caterpillar in the next month or so. This division of Caterpillar builds drilling machines that are track mounted. I think these machines are used more for mining, which is directly related to oil & gas types of applications.
“Regarding materials, the oil & gas business is probably 70% 4140, and some of it is heat-treated up to 38 R. We outsource the heat-treating. We have just started doing some black oxide and zinc phosphate plating.”
Value for the Dollar
Kulbeth said he recently went to South Korea with his supplier, Hillary Machinery (Plano, TX), to tour Hyundai WIA’s machine tool production plants in Changwon. While there he wanted to learn more about their Hyundai’s vertical lathe offerings, specifically the LV800M. “We had a specific oil & gas part in mind that was quite large and required both turning and milling operations that would ideally be machined in one setup. Our visit to Korea really paid off,” he says. “During our tour we were able to see the LV Series vertical turning centers being assembled in what was a very modern, clean and well-organized plant. The LV800M is now installed and has met our challenge in both its capacity to machine large, heavy parts, and its capability to perform both turning and milling operations in a single setup.”
There are other factors that Kulbeth finds attractive about the machines. “What I am most happy with,” he said, “is what you get from Hyundai for the dollar you’re spending. You can compare them with more expensive machines from Germany or Japan, but those brands offer no additional capabilities that you can’t get on the Hyundai machines. I guess it boils down to value for the dollar, and that is what I like about them. Plus, these machines are very good at holding quality. We consistently hold ±0.0005" [0.0127 mm] all the time. Parts where we turn and bore come off of the Hyundai WIA turning centers with a 32 Ra finish. We do that on a regular basis. Normally if you need better than that, you’re probably going to need to go to grinding.
“Further, Hyundai WIA has probably influenced our operating processes somewhat in the last couple of years. We work about 20 hours a day in two 10-hour shifts, five days a week, and the Hyundais work right through both shifts. I think we have more Hyundai WIA machines than anything else.”
Typical Oil Patch Parts
Kulbeth said that some of the parts they do are 12.5" (317.5-mm) in diameter, 48" (1220-mm) long with a 6" (152-mm) through hole and weigh 1200 lb (540 kg). When finish-machined, they will have cut off 600 lb (270 kg) of chips. That’s probably the biggest part they’re currently doing. Cycle time: four hours. These 48" parts are part of a manifold system for fracking, and they are run on a Hyundai WIA L400LMC.
“The LV800 vertical lathes are used to machine check valve bodies,” Kulbeth said, “which are 10" [254-mm] in diameter and 14" [356-mm] long. The part requires both milling and turning operations, which they accomplish in a single setup on the LV800M. We probably do 250 of these parts per month, and I think those finished parts weigh about 75 lb [34 kg], and they’re probably double that when we start on them. The customer actually assembles them into a check valve; we do the bodies. They put the flappers in and assemble them after they get the machined bodies from us. Check valves are used after an oil well is completed to extract the oil from the ground into a holding tank or a pipeline.
“The check valve bodies,” he said, “are made from 10" bar and are generally 20' [7 m] in length. We get the steel in and we saw the bars into blanks with a couple of automatic bandsaws. They go on the LV800, we rough-turn them, drill a 27/8" [73-mm] hole with an inserted drill, and then we send them off to heat treat. They come back, and we put them on the LV800, and we are able to do one end finished, flip it to complete the second end and then do the mill work. So when it comes off, we are really doing the part in two operations—one roughing operation and one finishing operation. Total cycle time is about 45 min to do the roughing and about one hour to finish them. They have a variety of 63 Ra finishes on some of the bores, and they have a stub Acme thread in one end. We do all this on the LV800M.
“On our WIA L300MS, which is a traditional horizontal turning center featuring live tooling as well as a sub-spindle,” Kulbeth continued, “they start out with 5" [127-mm] diameter bar stock, about 1½" [38-mm] long. They get a close tolerance, tapered ID, and when you flip it around to do the opposite side, you have to maintain a wall thickness of 0.120", ±0.005" [3 mm, ±0.127 mm]. These are safety devices that go on high-pressure pumps, so that when pressure builds to a certain point the cover will blow instead of the pump. These parts also have a thread that we thread mill on the L300MS, which is kind of a unique thing to do on a lathe. Typically it’s more common to tap on a lathe. These have a fairly tight tolerance on the pitch diameter of that thread, so we thread mill them to control that pitch diameter better.”
Kulbeth noted they also still do mandrels and packers for downhole drilling, the majority of which is done for Halliburton. However, they do a lot of work for Weatherford, and almost everything for Weatherford goes down in the hole.
Buy the Machine for the Job
“In a couple of places the Hyundai WIA machines have replaced older equipment,” Kulbeth said, “but most of the Hyundai WIA acquisitions have been as new technology that we needed to grow and keep pace with energy sector demand—oil, gas and mining. The majority has been purchased as additional equipment for additional capacity, to reduce cycle times, and in the case of the multitasking machines, to reduce setup times.
“In the beginning as a job shop, you try to find a machine that will do just about anything that comes your way. However, during the last few years we’ve gotten jobs and then acquired machines to do those jobs. Actually, it’s a pretty good position to be in, to get the job and then buy the machine to do the job rather than having the machine and trying to find work to put on it.”
Kulbeth said they’ve been happy with uptime for the majority of the Hyundai WIA machines—which is not to say they haven’t had a few issues. However, Hillary Machinery has been very responsive as far as service calls, usually having a service rep out in no longer than two days.
“One thing about Hillary and our sales guy, Randon Beavers,” Kulbeth said, “back when I was in that 2000-ft² shop, he would consistently call on us, not knowing if we would ever give him an order. I guess he had a little faith in us because he kept calling and calling on us. He had been calling on us for six or seven years before we ever gave him an order.
“Hillary has had some pretty significant growth during the time that I have known them, which probably precedes my going into business on my own in July, 1998. Overall, I think Hillary is a first-class organization to work with, and they are very responsive to our needs. It’s a class organization.”
Edited by Yearbook Editor James D. Sawyer from information provided by Hyundai WIA.
This article was first published in the 2013 edition of the Energy Manufacturing Yearbook.