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Manufacturer Anticipates Ongoing Growth

By Christina Haley O'Neal, posted Jan 22, 2021
Scott Bodemann, president of South-Tek Systems, stands inside the company's 66,000-square-foot Wilmington facility with one of its many nitrogen generator models. (Photo by Michael Cline Spencer)
A manufacturer of nitrogen generation technology is continuing to grow and hire in the area.
 
Wilmington-based South-Tek Systems, which employs 55 people, is implementing growth initiatives to keep business on an upward trajectory in the coming years, said Scott Bodemann, president of the company.
 
“Our goal is to quadruple the size of the business in the next three to five years through organic growth and acquisition strategies,” Bodemann said.
 
The business was acquired in 2018 by Pfingsten Partners LLC, a private equity firm based in Chicago.
 
The strategy for building the business is supported by the equity firm and South-Tek’s relocation in late 2019 to a 66,000-square-foot facility at 3700 U.S. 421 N. in Wilmington.
 
The move more than doubled its footprint from its previous location in the North Kerr Industrial Park. The relocation marks the company’s fourth move in town, geared to support South-Tek’s growing manufacturing business.
 
“Our previous facility was very segmented. We weren’t able to have an efficient flow in production. Now, we’re under one roof,” Bodemann said. “The new facility has allowed us to focus on lean manufacturing and ultimately improve our on-time delivery. The additional space has also increased our number of workspaces, ultimately allowing us to bring on additional people, which is critical for our growth plans.”
 
South-Tek has standard product lines and custom nitrogen generation solutions for a variety of markets, including fire protection, food and beverage, military, laser cutting, electronics, laboratory and heat treating.
 
The business serves big-name clients such as Pfizer, Johnson & Johnson, Pepsi, Honda, Buffalo Wild Wings, Facebook and Apple.
 
Nitrogen generator products are made to fit the specific needs of an industry on the commercial side, Bodemann said. Generators in this segment are made for use in various applications, from pouring the perfect beer to preventing sprinkler system corrosion for systems that support commercial facilities and large data centers.
 
“All of these different applications, they use nitrogen,” he said, adding that South-Tek will install a nitrogen generator on-site for a company, rather than a company continually having to source its nitrogen each month from a gas company.
 
A new product on the commercial side that has come out within the past 18 months, LabTek, is a nitrogen generator line marketed toward toxicology and other laboratories using liquid chromatography-mass spectrometry equipment, including those used for COVID-19 testing.
 
On the industrial side, South-Tek supports the specialized development of “engineered-to-order generators” for use in different industries and applications, he said. This service supports about half of the business.
 
“We design our technology specifically to our customer’s needs. So, it really is a ground-up design for that particular customer,” he said, adding that those specifications include the purity, pressure and flow rate of nitrogen required by the customer.
 
South-Tek manufactures nitrogen generators that produce nitrogen with a “purity ranging from 95% - 99.999%,” Bodemann said.
 
A nitrogen generation machine filters the nitrogen mechanically from the air, so the nitrogen is produced and ready on-demand for a specific application, he said. The average nitrogen generator contains about 150 parts.
 
Custom-engineered using PSA (pressure swing adsorption) filtration technology, coupled with a dual-bed design, South-Tek’s generators “deliver the exact nitrogen purity an application requires with maximum efficiency and minimal maintenance,” Bodemann said.
 
All South-Tek’s systems are designed in-house. The generators are assembled at South-Tek’s Wilmington site.
 
South-Tek’s business continues to broaden and has “averaged a pretty aggressive annual growth percentage over the years,” Bodemann said.
 
Now, the firm is pursuing acquisition opportunities.
 
“That will ultimately come with expansion in the Wilmington area and open up additional job opportunities for local candidates,” Bodemann said. “We have a very nice facility right now, which should sustain us for the next five to eight years. However, if required, we do have options for additional square footage on the current property.
 
“I would imagine that we would be doubling the size of our employee base in that time,” he added. “And I can’t emphasize it enough, but it is the people that have made this company great, and the goal is to build upon that foundation with very talented future candidates as we continue to expand.”

South-Tek Systems

3700 US-421 N., Wilmington

No. of employees:
55
 
Year founded: 1997
 
Top local official: Scott Bodemann, resident
 
Company description: South-Tek Systems designs, develops and manufactures nitrogen generation technology.
 
Products made locally: South-Tek makes nitrogen generators that produce on-demand nitrogen.
 
Product distribution: South-Tek has over 12,000 global installations in privately held businesses and Fortune 500 companies.
 
What made the company decide to make its goods locally?
Elizabeth Leed, marketing director: “Manufacturing in-house allows departments across the company to take a hands-on approach. For example, it enables South-Tek’s engineering team to efficiently drive R&D initiatives to completion and allows our quality team to perform on-site purity and flow rate verification ensuring we meet the exact nitrogen requirements of our clients prior to shipping. We feel manufacturing on-site is imperative to producing state-of-the-art technology and providing superior generation products.”
 
What’s planned next?
Leed: “Our focus for 2021 is expanding both through organic and acquisition growth strategies. We’re looking to capitalize on our momentum in existing markets as well as discover new partners to work with who are strong in the areas where we see opportunity.”
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