In 1915, a young engineer out of the University of Minnesota named Frank Donaldson designed a filter to cut the dust that clogged the engines of farm tractors.
It was quite an innovation for the founder of what became Donaldson Co. Inc.
Last year, Donaldson sold $2.5 billion worth of filters and related equipment that protects diesel engines, cuts their emissions, collects factory dust, captures industrial fumes and even protects tiny computer parts.
And it’s going to take a lot more innovation and growth to achieve Donaldson’s goal of $3 billion in sales by 2016.
A big part of the strategy is identifying new markets for existing and developing technology.
A small but fast-growing internal initiative centers on new uses for Donaldson technology used to protect disk drives with filters. That business started with mainframes decades ago and evolved to tiny filters that protect the electronic brains in PCs and laptops. That’s a declining market amid the growth of iPads and tablets.
Peggy Herrmann, vice president of Donaldson’s disk drive, venting solutions and semiconductor group, said a several-year-old product group called “integrated venting solutions” takes Donaldson’s expertise in chemical absorptive filtration and has created filters for new customers. Most of those markets didn’t exist a few years ago.
The business is small so far, but expected to grow by 40 percent this fiscal year to about $13 million in sales, thanks to fledgling customers in the medical device, consumer electronics and auto markets.
“Donaldson is good at keeping things clean,” Herrmann noted. “And we are entering adjacent markets that build upon our core technology of filtration.”
For example, Performance Systematix, a manufacturer of packaging materials, including specialized bottle caps for bleaches and chemical and industrial solvents, is a fairly recent Donaldson customer.
“We use Donaldson material primarily in our packaging container venting applications, most commonly where we convert the liner materials used in caps and closures to a vented format,” said John Grover, director of sales and marketing of the Grand Rapids, Mich.-based Performance Systematix. “The venting allows containers to breathe without leaking. The properties of the Donaldson filter materials allow air to pass … so our caps and closures allow air to pass … and keeps the liquid within the containers.”
Performance Systematix provides what can be volatile solutions if not stored properly and allowed to vent. Its products include a variety of bleaches and hydrogen-peroxide-based products for the medical, consumer, ag and industrial markets.
“I can’t remember who found who,” Grover said. “But we’ve been working with Donaldson for several years. They are a key supplier. And Donaldson provides a high-quality option to other materials. It’s a unique application for their filter material and somewhat invisible to the final customer, but an important application for the packaging.”
In health care, Donaldson has found new customers for its tiny filters by creating membranes that protect the electronic guts of hearing aids and filters for ostomy bags to dampen odors.
“We were already in the technologies but the markets are new,” Herrmann said. “We had nothing to do with hearing aids, screw vents … or ostomy bags before this.”
In short, Donaldson has taken its expertise in chemical absorptive filtration to create membranes and filters for many diverse end markets that previously didn’t use this filtration, including an auto parts company that uses a Donaldson vent to keep the inside of its headlights from fogging.
“Within ‘venting solutions,’ we get ideas from customers and from within the company,” Herrmann said.
CEO Bill Cook even sent a photo of a hockey helmet to Herrmann one day, thinking he’d spotted a vent that Donaldson engineers could improve upon. Turns out, there wasn’t much of an opportunity there.
But Herrmann’s group has helped pioneer markets in mobile phones, solar panels and lighting that will contribute to the anticipated 40 percent hike in venting-solutions sales this year.