Natural Selection
Walla Walla’s Key Technology Corp. brings high technology to the world’s agricultural businesses.
By Leslie D. Helm
| May 2010 | FROM THE PRINT EDITION
Photograph by Hayley Young
Mice, glass, bones. Nails, snails, snake heads. Stems,
sticks, slugs and bugs. Razor blades. They are among the debris gathered from
agricultural fields during the process of harvesting vegetables and fruits that
have ended up in production lines at large food processors that package
everything from frozen french fries to fresh lettuce.
Fortunately, high-technology sorting and inspection equipment helped to identify and remove those unwanted items. The equipment is built by Key Technology Corp., a company based in Walla Walla, in the heart of eastern Washington’s wine country.
The business, with $100 million in annual sales, has operations in Shanghai, Mexico, South America, the Netherlands and Australia; it serves 2,700 customers in 73 countries. But David Camp, CEO, says Key Technology’s just getting started. Camp is plowing capital into research and development as well as new information technology to lay the foundation to build a multinational powerhouse.
“I am putting the things in place that are necessary to grow to be a $1 billion company in the next 10 to 15 years,” says Camp, who has a Ph.D. in chemical engineering from the Massachusetts Institute of Technology.
It won’t be easy. The firm’s primary competitor, BEST (Belgium Electronic Sorting Technology), receives millions of dollars a year in subsidies from the Belgian government, although it only makes sorting equipment rather than the more comprehensive imaging, inspection and conveyor technology Key makes. And the marketplace has been more than a little volatile. Key Technology lost money last year when its sales plunged by nearly a third as many companies deferred purchases of Key’s inspection systems, and prices of the equipment, some of which can cost as much as $500,000 apiece, dropped.
“They [Key] don’t have much U.S.-based competition, but they have some competition in Europe,” says Jim Ricchiuti, a New York-based analyst with Needham & Co., an investment banking and asset management firm. Ricchiuti points out that some European countries have been creative about providing grants to local businesses to keep employment at high levels. “We have a hold rating on the stock,” says Ricchiuti. “The big issue is to see whether demand is coming back.”
Fortunately, with up to 20 percent of its revenues coming from spare parts and servicing equipment, the company has remained cash flow positive, putting it in the enviable position of having little debt and $18 million in reserve cash. With that healthy balance sheet, Camp was able to continue plowing 8 percent of Key’s annual revenues into R&D.
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Key Technology Corp.’s Manta Business Calendar Magazine |
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