Industry Watch

It’s complex: A ‘clean in place’ system manufactured by Relco

Relco milks innovation in making of dairy processing equipment

Acquisition strategy helps manufacturer gain technologies, expand overseas

By Nora Clos
11-20-2014

If you’d asked Loren Corle back in the early ’80s what his future job title would be, president of the world’s fourth-largest dairy equipment manufacturer wouldn’t have been a likely response. Yet Corle is now president at Relco, a manufacturer based in Willmar, Minnesota, that designs, distributes, and installs dairy processing equipment. Over the past three decades, Relco has grown from a startup into an industry leader with about 170 employees.
 
Not bad for someone originally trained as a welder, as Corle was. Between 1980 and 1982, he taught industrial welding at a technical college, but after his second year on the job he was laid off. Enrollment was low, and his position as an instructor couldn’t be sustained. 
 
He accepted a summer job doing pipe welding for a local dairy facility, intending to find a “real job” in the fall. “I never found that ‘real’ job,” Corle says. “I’m still working in dairy equipment manufacturing to this day.”
 
It all began when Corle began using his welding expertise to help the dairy facility install a piping system. “This included everything from high-pressure steam systems to sanitary stainless steel tubing that the product went through, and everything in between,” he says.
 
At the time, he was working as an independent contractor, along with Kevin Hemish and Al Dresow, fellow welders he’d met during his stint at the college.
 
“There wasn’t a job to be had in our industry back in 1982,” Hemish explains. “We basically stayed on doing odd jobs at this dairy factory during the summer to create a paycheck.” When the facility expanded, the three men were hired to help. “Eventually we began to get more and more work,” Hemish says.
 
After two years working independently, Corle formed Relco Welding and hired Dresow and Hemish on as employees. (They stuck around: Today Hemish is a process engineer, and Dresow is the construction manager.)
 
At this point, Relco (the name is an anagram of Corle’s last name) was focused on installation and hadn’t yet embarked on design. “What I quickly realized was that if the company was really going to grow, we needed a product,” Corle says. “We needed to have expertise. We were, at the time, basically just a service.” 
 
He worked for a year with Doug Rolland, a consulting engineer and owner of Rolland Engineering, to design unique technologies that Relco could offer in addition to installation services. In 1984, Relco acquired Rolland Engineering, and Rolland joined the operation as a shareholder and full-time engineer.
 
The technologies Relco designed at the time were focused on the processing of liquid milk rather than cheese and dried milk products. But, Corle notes, “only about 20 percent of dairy is consumed as fluid milk. The rest is used in making cheese or products like evaporated milk.” 
 
The equipment used in these processes is extremely complex and can often stand to a height of several stories. “It’s not unlike the equipment used at a refinery,” Corle explains. “The equipment we supply for drying dairy products can be as large as 40 feet in diameter and 60 feet tall.” 
 
One of the company’s key innovations has been in developing technology to repurpose the waste product that remains after all proteins have been extracted from whey (the liquid byproduct of the cheese making process).
 
“After you remove the protein from whey, you’re left with mostly lactose, or milk sugar,” Corle explains. Lactose is used in everything from infant formula to candy, so Relco’s lactose processing technology has been a major asset. The company has patented a number of related processes and technologies.
 
Over the past few decades, Relco has expanded beyond the boundaries of Minnesota, and indeed the United States. As with the acquisition of Rolland Engineering, it’s sought out and acquired innovative companies and products along the way.
 
In 2008, Relco expanded to Europe with the purchase of a company in the Netherlands. By this time, it had designed or purchased a number of unique technologies that had allowed it to grow and become fairly well-established in the U.S. “The dairy industry in Europe is twice as large as that of the United States,” Corle explains. “We were looking for a way to bring our patented technology to Europe.”
 
Relco reached out to European dairy processing companies but failed to gain a foothold at first. “We were listened to politely,” Corle says, “but we failed to get contracts. It didn’t take me long to realize that if we were going to be entertained as a legitimate supplier in Europe, we needed bricks and mortar there.”
 
After researching local markets and suppliers, Relco partnered with Netherlands-based Wet & Dry Technologies, a specialist in the design and manufacture of stainless steel equipment used in the evaporation and drying of milk products. “We made a basic agreement that we would try to bring their products and technologies to the United States, and they would take ours to Europe,” Corle says. 
 
By 2007, the partnership had proved more beneficial than either company had predicted, allowing each to gain footholds in markets that had previously proved difficult to access. Relco purchased its partner’s assets, renamed it Relco Wet & Dry, and now uses its facilities for manufacturing and distribution in Europe.
 
Relco has since acquired several other companies and product lines. Among them was Stoelting, a line of cheese-making products it acquired in 2012 from Wisconsin-based Polar Ware. It’s also opened an office in New Zealand and hopes to expand to South America.
 
Looking forward, he says, the company will maintain its ongoing commitment to the dairy industry. “In the world of business today, you have to be an inch wide and a mile deep, rather than the other way around,” he says. “We’ve made a very deep impact by focusing on a specific area of a specific industry.”
 
Despite the company’s international reach, Corle sees advantages to being based in Minnesota. “There is a lot of talent with agricultural backgrounds here in the Midwest,” he says. “The Midwestern work ethic is second to none.” 
 
Hemish and Dresow can attest to that, each having been with the company for decades. “We have a very strong nucleus of talented, innovative people,” says Hemish.
 
“From the beginning, we’ve had continuous improvement instilled in us,” Dresow adds. “It’s always been a goal here at Relco to take it to the next step.” 

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