SRI Instruments

SRI Instruments, located in Torrance, California, began life in 1985 as Scientific Repair Inc. CEO and President Hugh Goldsmith, a former employee of PerkinElmer, started the company in his garage, repairing GCs and HPLCs. After some years repairing and creating spare parts for these instruments, Mr. Goldsmith began making inexpensive GCs, and was able to take advantage of a fast-growing market for mobile soil-testing labs for underground gasoline tank removal operations. SRI primarily manufactures custom-made GCs, but their product line has expanded to include a student-model HPLC, hydrogen generators and the PeakSimple chromatography data system.

But SRI is not a large company: according to Mr. Goldsmith, it had net sales of $6 million last year, and including its manufacturing operations in Las Vegas, Nevada, the company has 25 employees. Nonetheless, SRI has been able to succeed amidst larger domestic manufacturers and a growing number of Chinese and Indian manufacturers thanks to a number of strategies. As Mr. Goldsmith stated, “My formula for success has always been ‘90% of the performance for half the price’.” Making quality GCs is one of the easier steps, Mr. Goldsmith explained, and SRI distinguishes itself from its competitors by providing excellent service and support. This support is made easier by the design of SRI’s products. “They have a lot of buttons on the front panel, and that’s specifically to make it easy for someone who’s never seen that GC before in his life to pick up the phone and say, ‘I’m standing in front of this box; what do I do?’” Support that cannot be done over the phone is performed in house, and SRI has designed its instruments for quick and easy shipping.

The customer who has never seen a GC in his or her life is an important one for SRI. Mr. Goldsmith describes these “nonprofessional chromatographers” as “someone who is usually smart enough to run a GC, but really that isn’t their job; it’s incidental to their job.” These customers make up much of SRI’s sales and come from a wide variety of industries. Recently, GCs for biodiesel applications have been selling strongly, but Mr. Goldsmith told IBO about a recent sale of a GC to Nike for verifying that helium was being added to the heels of running shoes manufactured in China. Roughly half of SRI’s sales are international and are divided evenly between Asia, with strong sales for environmental testing in Japan; South America, mostly for oil and gas exploration; and Europe, where no particular buying trends dominate. SRI counts on the nonprofessional chromatographer for much of its business, but its highly customizable GCs—the company offers 16 different detectors and 12 types of injectors—allow SRI to reach niche markets. These markets are not large, but they add up: “I try to have a lot of those small markets . . . I’ll have two or three people doing this, and two or three people doing that, and pretty soon it adds up to six or seven hundred GCs a year,” said Mr. Goldsmith.

SRI was designed “to be profitable making one GC at a time,” so the company is not looking for the next “killer” application. And while he acknowledged that the emergence of low-priced, handheld mass spectrometers could hurt SRI, “a $5,000 gas chromatograph possibly still has some use even in a world with a $10,000 mass spec.”

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