Pall Corporation
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| Type | Public (NYSE: PLL) S&P 500 Component |
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| Industry | Diversified Machinery |
| Founded | 1946, New York City |
| Headquarters |  Port Washington, New York |
| Key people | Lawrence D. Kingsley CEO & President [1] Lisa McDermott Chief Financial Officer & Treasurer Roberto Perez Chief Operating Officer[2] Robert G. Kuhbach Senior Vice President, General Counsel & Corporate Secretary[3] Yves Baratelli President, Pall Life Sciences[4] Wolfgang Platz President, Pall Industrial[5] |
| Revenue |  US $ 2.74 Billion (FY 2011)[6] |
| Net income | US $ 315.5 Million (FY 2011)[6] |
| Employees | 10,900 (FY 2011)[6] |
| Website | www.pall.com |
Pall Corporation (NYSE: PLL), headquartered in Port Washington, New York, is a global business in the diverse field of filtration, separations and purification. Pall has been called the "original clean technology company" since many of its products deliver sustainable social benefits.[7] The company is listed in the S&P 500[8] and has been included in the Fortune 1000 list since 1991.[9] Total revenues for fiscal year 2011 were $2.74 billion, with $86.8 million spent on R&D.[6] Pall Corporation's business is split into two broad groups: Life Sciences (c.51%) and Industrial (c.49%).[6] These business groups provide fluid management products and systems to customers in biotechnology, pharmaceutical, transfusion medicine, energy, electronics, municipal and industrial water purification, aerospace, transportation and broad industrial markets.[10]
The company was founded by David B. Pall in 1946 as Micro Metallic Corporation.[11]
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[edit] Company history
Pall Corporation is a leading supplier of filtration, separation, and purification technologies.[4] The company sells its products to five major markets: medical, biopharmaceuticals, food and beverage, energy and water, aeropower, and microelectronics.[12] Emerging regions—such as Latin America, Eastern Europe, MENA, China, India, and Southeast Asia—represent about 20% of company sales.[13]
[edit] Formation
David B. Pall founded Micro Metallic Corporation in 1946. Pall, a Canadian-born chemist, had helped design a filter to separate uranium-235 from uranium-238 while working on the Manhattan Project.[14] The new filtration media, porous stainless steel, was created by sintering powdered stainless steel—a process which was later patented by Pall.[15] When Pall founded the company, he had planned on manufacturing porous stainless steel sheets for use as a filtration media. However, marketing this new media to filtration manufacturers was not successful and the company began to develop its own line of filters.[16] The company, renamed Pall Corporation in 1957, focused on developing filters for specialized tasks.[14]
In 1950, Pall brought his neighbor, a certified public accountant named Abraham Krasnoff, into the company to help with administration and finance. Krasnoff's organizational skills along with Pall's scientific abilities resulted in a successful organization.[10]
[edit] Early history
Pall Corporation has always focused on producing filters that performed critical tasks for customers.[14] In the late 1950’s, the company began developing filters for the aircraft industry in response to a series of high-profile incidents: two different Boeing 707s reported problems with their hydraulic systems while in flight; one plane was forced to make an emergency landing at John F. Kennedy International Airport, while the other was forced to use an auxiliary system to lower its landing gear.[16] It was found that the hydraulic systems had been contaminated—largely a result of the paper filters used at the time.[17] Pall developed a sintered woven metal filter which eliminated the contamination problems. The company later developed a filter for General Electric that purified the fuel line to its jet engines.[14] These early forays into the commercial airline industry would grow to become a major part of the company’s business.[16] Pall soon became a leading supplier of aircraft filters, with products used on most major military aircraft.[10]
In fact, by the late 1970s Pall had become overly dependent on military and defense industries, and the company sought new markets for its fine filter technology. During this time, Pall was able to provide the emerging semiconductor and biotechnical industries with the finer filters needed in their manufacturing processes.[10]
According to Abraham Krasnoff, who became the company chairperson in 1989, Pall preferred to service niche markets, where manufacturing needs were very specialized and challenging. Accordingly, Pall eschewed the production of filters widely used by individual consumers, such as gasoline or oil filters for cars. Furthermore, once Pall's development of a certain technology was complete, the company usually jettisoned its business in that area. For example, in 1988, Pall sold its compressed air dryer business as well as its facility that produced gas mask filters, as they both became technologically and financially mature units.[10]
Recognizing that Pall Corporation could not rely solely on the genius of one person, David Pall, the company focused on building a research and development department. Referring to David Pall, Krasnoff told Industry Week, "You can always succeed a good manager, but you can never succeed a genius." Therefore, Krasnoff and Pall set about assembling an impressive array of scientists who would help develop fluid clarification products. Pall spent only about 4 percent of its sales on research and development, compared to the budgets of some of its chief competitors, such as Millipore, which allotted more than 7 percent of sales. The company was able to keep its costs down by focusing solely on fluid clarification, unlike Millipore and other companies, which had diversified their interests and therefore required a wider array of researchers.[10]
Another of Krasnoff's organizational strategies was to assemble a team of scientists known collectively as the company's Scientific Laboratory Services, or SLS, to help test, advise, and communicate with researchers. Krasnoff told Financial World that SLS was "a bridge between the leading edge customer and our own marketing and research people." [10]
In order to ensure that supplies and prices remained steady worldwide, manufacturing for each of Pall's product lines took place in at least two Pall facilities. The size of each facility was limited to no more than 450 employees, fostering a sense of team spirit and familiarity.[10]
[edit] Pall in the 1980s and Early 1990s
Much of the steady growth Pall experienced, measuring about 17 percent annually through the 1980s and into the 1990s, was accomplished through internal growth rather than through acquisitions. Pall focused on building new factories and creating subsidiaries throughout the world. Pall faced international competition but maintained its edge in several markets and managed to dominate almost every niche it carved out for its subsidiaries.[10]
In the early 1990s, Pall's healthcare products division was the fastest growing segment of the company. In 1992, with sales of $331.6 million, the division represented almost half of Pall's sales and 60 percent of its operating expenses. It included filters for direct use with hospital patients to provide protection against contamination and infection through blood, breathing, or IVs. Blood filters in particular were a high growth area in the first part of the decade, with sales estimated to reach $260 million, or 26 percent of total sales, by 1995.[10]
Pall's leukocyte filters treated with gamma rays were used to filter out white blood cells, which caused the rejection of platelets during the multiple transfusions necessary for organ donors and recipients, AIDs patients, and those undergoing chemotherapy. David Pall led the team that developed the blood filter, which proved a vital part of the system used for processing whole blood at blood collection sites.[10]
Other Pall healthcare products included filters to use in diagnostic devices and filters for the manufacture of contamination-free pharmaceuticals, biopharmaceuticals, and biologicals. Moreover, Pall produced electronic instruments for use in testing the filters before and after use. Pall's operations also included food, beverage, and household water filters in its healthcare segment. Products in this market included filters for the final filtration process of beer, wine, and bottled water and filters used in the production of high fructose corn syrup. Pall entered into an agreement to apply its dynamic microfiltration systems to a series of dairy product applications of Ault Foods of Toronto, Canada.[10]
The company's Aeropower division accounted for sales of $204.7 million in 1992. This division produced fluid clarification filters used to clean hydraulic, lubricating, and transmission fluids for both military and commercial aircraft. Other industrial customers included manufacturers and end users of fluid power equipment and bearing lubrication systems for steel, aluminum, and paper mills and the automobile and aerospace industries. Furthermore, Pall's filters were used by manufacturers of on- and off-road vehicles and construction equipment and machinery for moving earth, as well as having applications in agriculture machinery, oil drilling and exploration, mining, metal cutting, and electric power generation.[10]
Military sales accounted for only 10 percent of Pall's sales in 1990, down from 25 percent ten years earlier. During the Persian Gulf crisis involving Operation Desert Shield and Operation Desert Storm, however, military sales went up when Pall supplied $26 million worth of filters to keep sand out of helicopter engines. Furthermore, Pall entered into an agreement with FMC Corporation, a defense and military systems contractor, to provide an industrial air purification method (called Pressure Swing Absorption or PSA) to FMC for most military applications in North America, including foreign military sales. Pall anticipated that this would build a strong base for military sales, which the company expected to slowly increase despite the downsizing of the military occurring in the early 1990s.[10]
The fluid processing market, with sales of $148.8 million in 1992, included service to manufacturers of electronic components, liquid crystal displays, magnetic tape, electric power, film, fiber, chemicals, petrochemicals, oil, gas, paper, steel, and other products in which filters are needed for removing contaminants or particles. Pall worked with several world-renowned scientists to develop new products in this market segment, especially the area of semiconductor technology. Although this was a mature market, research and development was opening new applications for Pall.[10]
[edit] International Operations in the Early 1990s
Pall's international operations provided about two-thirds of its revenues in the early 1990s. In the mid-1960s Pall had acquired a small English metalworking company run by Maurice Hardy. This initial investment in Hardy's company was Pall's jumping-off point for further overseas expansion. By the time England became a full member of the European Common Market more than a decade later, Pall Europe was generating sales revenues of $9 million. Despite duties imposed by the European Economic Community, 40 percent of Pall's sales were in West Germany, Italy, and Holland, while 10 percent were in Scandinavia.[10]
In each country Pall entered, it used roughly the same strategy, setting up a small sales unit, then expanding to include technological and engineering support. It then added distribution to its services. Krasnoff maintained that Pall did not establish foreign facilities to take advantage of lower labor costs, telling U.S. News & World Report in 1988 that the three most important rules he had learned about operating overseas were, "Hire competent locals, use competent locals, and listen to competent locals." [10]
In 1991, Pall's sales growth in Europe was at 18 percent, and its growth in Asia reached 31 percent, while its growth in the United States that year was only 8 percent. By 1993, Pall was generating about two-thirds of its revenues from foreign markets and had subsidiaries in Brazil, Spain, Germany, France, Singapore, Canada, Japan, Korea, and other nations and was considering further expansion in Japan and the rest of the Pacific Rim. Pall projected that by 1995, as much as 75 percent of its sales could be generated abroad.[10]
In the early 1990s, Pall faced intense competition from the Japanese, particularly in the blood filtering market. While Pall controlled about 50 percent of that market, its share was threatened by Asahi, a Japanese chemistry conglomerate worth billions of dollars, and Terumo, a medical equipment manufacturer. Nevertheless, Pall was able to beat these Japanese firms to market with its improved leukocyte filter.[10]
In 1993, Pall looked forward to international growth, particularly in the high-tech areas of ultrafiltration (molecular separation) and dynamic microfiltration. To this end, the company sought to form alliances with global operations rather than to acquire them. According to CEO Maurice Hardy, who replaced Krasnoff, a company must have "a multinational and, later, a global operating strategy." Hardy died of cancer in July 1994, leaving Eric Krasnoff at the helm as chairman and CEO.[10]
[edit] Mid-1990s and Beyond
Under the continued leadership of Krasnoff, Pall focused on expansion and diversification in the mid-1990s. The company relied on high-end separations to fuel its growth well into the 2000s. It also made several key acquisitions and launched several new products as part of its growth strategy. In 1995, Pall announced the development of a filter used in HIV-related blood filtration. Two years later, the firm acquired Gelman Sciences. In 1998, Rochem, a German filtration systems manufacturer, was added to the company's arsenal. In 1999, Pall secured a $6 million water purification contract with the Pittsburgh Water and Sewer Authority. During that year, the United Kingdom began to require the removal of white blood cells—leukocytes—from all blood and blood products after nearly 30 people died from Mad Cow disease. Shortly thereafter, Austria, France, Ireland, Malta, Norway, Poland, and Canada adopted the requirement that blood products go through the process called leukocyte reduction. In 2000, Germany followed suit. As a result, Pall landed a $6 million blood filtration contract from the German Red Cross Transfusion Center.[10]
Pall entered the 21st century on solid ground. Strategic alliances, acquisitions, and research and development were cornerstones in the firm's long-term strategy. The company partnered with QIAGEN NV and Stedim SA in 2001. During 2002, Pall purchased the Filtration and Separations Group of U.S. Filter Corp. Whatman HemaSure, the blood filtration arm of Whatman plc, and the BioSepra Process Division of Ciphergen Biosystems Inc., were added to Pall's coffers in 2003 and 2004, respectively.[10]
During this time period, Pall began to make some internal changes. The company adopted the CoRe Cost Reduction program, which was expected to generate savings of nearly $20 million in 2005. Pall also began to realign its business segments in 2004. It restructured into three operating companies: Pall Life Sciences, which included the medical and biopharmaceuticals business; Pall Process Technologies, the combination of microelectronics and general industrial interests; and Pall Aeropower, which integrated the company's aerospace and machinery and equipment holdings.[10]
By 2005, it was evident that Pall's efforts over the past several years were paying off. Both revenue and income were on the rise, and the company appeared to be on solid financial ground. Founder David Pall—a holder of 181 U.S. patents—died in 2004, leaving behind a company that was far different from the small firm he founded in a New York garage in the 1940s. Indeed, with nearly 60 years of history under its belt, Pall had grown into a formidable competitor in the purification, filtration, and separations industries. Its good fortune in the recent decade left it well positioned for success in the years to come.[10]
[edit] Principal Subsidiaries
Medsep Corporation; Pall Acquisition LLC; Pall Aeropower Corporation; Pall Biomedical, Inc.; Pall International Corporation; Pall Puerto Rico, Inc.; Pall PASS US, Inc.; Russell Associates Inc.; Gelman Sciences, Inc.; Pall Austria Filter GmbH; Pall (Canada) Ltd.; Pall Europe Ltd. (United Kingdom); Pall France S.A.; Pall Deutschland Beteiligungs GmbH (Germany); Pall Deutschland Holding GmbH & Co. KG Partnership (Germany); Pall Italia S.R.L.; Gelman Ireland Ltd.; Pall Netherlands B.V.; PLLN C.V. Partnership (Netherlands); Pall Norge AS (Norway); Pall Espana S.A. (Spain); Pall Norden AB (Sweden); Pall (Schweiz) A.G. (Switzerland); Argentaurum A.G. (Switzerland); Pall Filter (Beijing) Co., Ltd. (China); Pall Asia International Ltd. (Hong Kong); Nihon Pall Ltd. (Japan); Pall Filtration Pte. Ltd. (Singapore); Pall Korea Ltd. (South Korea); Pall India Private Ltd.; Pall New Zealand; Pall Corporation Filtration and Separations Thailand Ltd.[10]
[edit] Key Dates
1946: David Pall establishes the Micro Metallic Corporation. 1950: Abraham Krasnoff joins the company. 1957: Micro Metallic is renamed Pall Corp. 1958: Pall begins to develop filters for the aircraft industry. 1991: By now, Pall's sales growth in Europe is at 18 percent and its growth in Asia reaches 31 percent. 1994: Eric Krasnoff is named chairman and CEO. 2004: Pall begins to restructure into three operating companies: Pall Life Sciences, Pall Process Technologies, and Pall Aeropower.[10]
[edit] Achievements
1990: Dr. Pall is awarded the National Medal of Technology for patenting and commercializing over 100 filtration and other fluid clarification products beneficial to society and for building Pall Corporation into a global company.[18]
2008: Dr. Pall is posthumously inducted into the National Inventors Hall of Fame for his invention of the leukoreduction filter.[19]
2009: Pall Corporation is named one of the greenest companies in America in Newsweek’s September 28th issue. The company was ranked second in the industrial goods sector and 47th among America’s largest companies.[20]
2011: Pall Corporation is awarded the Engineering Materials Achievement Award (EMAA) by ASM International. The company was recognized for its porous iron aluminide technology.[21]
2011: Pall Corporation is named a top green company in Newsweek's third annual Green Rankings. The company was ranked fifth in the capital goods sector and 69th among the U.S. 500 list.[22]
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[edit] External links
[edit] References
- ^ "Pall names new CEO". Filtration + Separation. 10 August 2011. http://www.filtsep.com/view/19998/pall-names-new-ceo/. Retrieved 3 October 2011.
- ^ "Roberto Perez". Bloomberg Businessweek. http://investing.businessweek.com/research/stocks/people/person.asp?personId=185387&ticker=PLL:US. Retrieved 8 March 2011.
- ^ "Robert G. Kuhbach". Bloomburg Businessweek. http://investing.businessweek.com/businessweek/research/stocks/people/person.asp?personId=174925&ticker=DOV:US. Retrieved 8 March 2011.
- ^ a b "Pall Corporation Form 10-K". United States Securities and Exchange Commission. 2010. http://sec.gov/Archives/edgar/data/75829/000120677410002091/pallcorp_10k.htm. Retrieved 8 March 2011.
- ^ Business Wire (2-11-2011). "Pall Corporation Names Wolfgang Platz President Of Industrial Business". TheStreet.com. http://www.thestreet.com/story/11004841/1/pall-corporation-names-wolfgang-platz-president-of-industrial-business-photo-business-wire.html#. Retrieved 8 March 2011.
- ^ a b c d e "Pall Corporation Form 10-K". United States Securities and Exchange Commission. 2011. http://www.sec.gov/Archives/edgar/data/75829/000120677411002167/pallcorp_10k.htm. Retrieved 30 September 2011.
- ^ "Pall Corp. at Robert W. Baird Industrial Conference Transcript". Thomson Reuters. 9-20-2010. http://www.alacrastore.com/research/thomson-streetevents-Pall_Corp_at_Robert_W_Baird_Industrial_Conference-T3490655. Retrieved 20 June 2011.
- ^ "S&P 500 Index". CNNMoney.com. http://money.cnn.com/data/markets/sandp/?page=23. Retrieved 29 April 2011.
- ^ "Fortune 500: Companies by years (1955-2005)". Fortune. http://money.cnn.com/magazines/fortune/fortune500_archive/letters/P.html. Retrieved 29 April 2011.
- ^ a b c d e f g h i j k l m n o p q r s t u v w x y z History of Pall Corporation
- ^ Bayot, Jennifer (9-26-2004). "David B. Pall, 90; Invented Filters for Blood". The New York Times. http://query.nytimes.com/gst/fullpage.html?res=9803E6D91F39F935A1575AC0A9629C8B63. Retrieved 29 April 2011.
- ^ Maher, Mike (3-11-2011). "Higher Profits Filtering to Pall Corp". Seeking Alpha. http://seekingalpha.com/article/257759-higher-profits-filtering-to-pall-corp. Retrieved 19 May 2011.
- ^ "Pall's CEO Discusses Q2 2011 Results - Earnings Call Transcript". Seeking Alpha. 3-11-2011. http://seekingalpha.com/article/257820-pall-s-ceo-discusses-q2-2011-results-earnings-call-transcript. Retrieved 19 May 2011.
- ^ a b c d Slutsker, Gary, ed. (January 23, 1989). "To catch a particle". Forbes: 88–89.
- ^ Wells, Michael, ed. (June 1982). "How Pall Corp. capitalized on a porous beginning". Hydraulics & Pneumatics 35: 90–94.
- ^ a b c Dlott, Jeffrey S.; Dan A. Waxman (January 2006). "Pioneers and Pathfinders: David B. Pall (1914-2004)". Transfusion Medicine Reviews 20 (1): 84–87. doi:10.1016/j.tmrv.2005.08.009.
- ^ "Pall answers an urgent call". Focus: Special 50th Commemorative Issue. Pall Corporation. 1996. http://www.pall.com/pdfs/About-Pall/inv_pdf_Focus50Pt1.pdf. Retrieved 2 November 2011.
- ^ "The National Medal of Technology and Innovation Recipients, 1990 Laureates". United States Patent and Trademark Office. http://www.uspto.gov/about/nmti/recipients/1990.jsp#heading-1. Retrieved 12 September 2011.
- ^ "David Boris Pall". National Inventors Hall of Fame. http://www.invent.org/hall_of_fame/387.html. Retrieved 12 September 2011.
- ^ "Pall Corporation Named a Top Green Company by Newsweek". Machinery Lubrication. http://www.machinerylubrication.com/Read/2330/pall-corporation-named-a-top-green-company-by-newsweek. Retrieved 12 September 2011.
- ^ "Pall wins Engineering Materials Achievement Award for 2011". Filtration + Separation. 14 September 2010. http://www.filtsep.com/view/12441/pall-wins-engineering-materials-achievement-award-for-2011/. Retrieved 12 September 2011.
- ^ "Pall Corporation Named A Top Green Company By Newsweek". Pharmaceutical Online. 1 November 2011. http://www.pharmaceuticalonline.com/article.mvc/Pall-Corporation-Named-A-Top-Green-Company-By-0001. Retrieved 9 November 2011.
