Announcer:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism right here, right now at the NYSE and at ICE's 12 exchanges and six clearing houses around the world.
Announcer:
And now, welcome Inside the ICE House. Here's your host, Josh king of Intercontinental Exchange.
Josh King:
How many times has this happened to you, you're on a cross country flight looking down on the Heartland, 35,000 feet below? A glance out the window presents a checker board of agricultural fields stretching for hundreds, it can feel like thousands, of miles. And in the geometry of our brains, we detect perfect circles within those squares, like a checker piece waiting to move across the Corn Belt. The name Corn Belt is deceiving as the agriculture of the United States is far more diverse, though corn is central to the modern economy in ways both obvious and obscure. A 2013 article in Scientific American summed it up, corn can be used for food as corn flour, cornmeal, hominy, grits, or sweet corn. It can be used as animal feed to help fatten our hogs, chicken and cattle. And it can be turned into ethanol, high fructose corn syrup, or even bio-based plastics. Almost poetic and evidence that our country needs to produce a hell of a lot of corn.
Josh King:
Over the last half century, U.S. agriculture has experienced a technological revolution to make sure that supply can meet demand, even though the acreage of crop growing land has actually decreased. The Department of Agriculture is forecasting that the country will produce 176 and a half bushels of corn per acre this year in 2019, more than double the 86 bushels per acre in 1969.
Josh King:
Turning back the clock 50 years to 1969 is where our story begins today, with the shipment of the irrigation device that makes those distinctive circles that are so evident from above. Proof, if any is needed to visitors from across the galaxy, that there is very intelligent life on our planet. We're talking about irrigation. 50 years ago, this month, Lindsay Corporation, NYSE ticker symbol LNN, a farm equipment company founded in the 1950s by Paul Zimmerer, delivered the first Zimmatic center pivot irrigation system.
Josh King:
So what, you ask? The innovation of the center pivot changed the landscape of American farming and set Lindsay on a path of global growth, offering technological solutions for the world's ever increasing food production and infrastructure needs.
Josh King:
Our guest today, Lindsay Corporation's CEO, Tim Hassinger, joins me in a moment to talk about how the company with its roots and headquarters in The Cornhusker State has, much like the product that gives Nebraska its' nickname, greatly expanded its' offering not only to ethanol and plastics, but to the systems that will drive the future of irrigation and transform your rush hour drive.
Josh King:
How is Lindsay integrating technology to make agriculture more productive while also deploying the tools to transform our drive time? We'll find out right after this.
Speaker 3:
Twilio is a cloud communications platform that allows software developers to embed any kind of communications into every software application they build. We see ourselves at day one of a future of communications, which is powered by software. And so we are going to continue to build out globally more ways of communicating. The New York Stock Exchange is a critical part of our global economy. It's amazing for a company to get to be a part of that long tradition. Twilio is listed on the New York Stock Exchange.
Josh King:
Our guest today, Tim Hassinger, is President and CEO of Lindsay Corporation. A position he's held since 2017. He also serves on the Boards of Directors of AGDATA, a full service data solution company that specializes in agricultural data management. And prior to joining Lindsay, Tim served as President and CEO of Dow AgroSciences, a subsidiary of DowDuPont, which currently trades under the ticker symbol DWDP. He was with Dow AgroSciences for 33 years, holding leadership positions across a variety of domestic and international business units, including a stint in Shanghai, China as Regional Commercial Unit Leader for greater China.
Josh King:
Welcome to the ICE House, Tim.
Tim Hassinger:
Thank you. Glad to be here.
Josh King:
This is your first trip to the exchange as CEO of Lindsay, how was it up there in the Bell podium?
Tim Hassinger:
That was a great experience. A little pressure to make sure that you didn't get booed on the floor, but other than that, it was great.
Josh King:
You're now entering your first full year at Lindsay. But back in 2017, you said that your first day at Lindsay felt like a sixth grader in a new school. What's the first thing a newly appointed CEO does when he walks into a new HQ?
Tim Hassinger:
Well, he wants to get a sense of the team that he's going to be working with, trying to get a feel for what the culture of the organization is. Those were the first immediate things that I focused on.
Josh King:
It was certainly a big move, leaving Dow AgroScience where you began as an intern, eventually working your way up to CEO of that unit. Are you feeling a bit more like an established upperclassman at Lindsay these days?
Tim Hassinger:
Well, I'm feeling established obviously after being there now for a little over a year at a chance to get to know the organization, not only the people, but more of how the business runs, et cetera. And I would describe it's been a tremendous experience.
Josh King:
So track that journey of the first 500 days for me, from where you started to where we are today and the things that you did, the big moves that you've made over the last year.
Tim Hassinger:
Yeah. Well, the first segment of that I would say is the first 100 days, and had issued a 100 day plan, was all around the premise of just listen and learn. So I focused strictly on getting to each of our facilities to better understand their operations, getting to meet as many of our employees as I could. And during that first 100 days, had a chance to interact with roughly a 1,000 people, whether it was employees, our dealers, customers, and some key stakeholders to get a sense of what their feedback about the organization was. And one of the positives that came out of that is, the feedback was consistent, frankly more than even I would've expected given the broad range of people talking to. So then the next stage was implementing those plans, getting the organization to understand the type of change that would be coming. And we have spent really the last year now focused on those change that we laid out in an all employee video conference call back in January of 2018. And that's where we've been focused on.
Josh King:
The decision to leave Dow after 33 years, you walk in the door at Dow as an intern, big one for you and your family?
Tim Hassinger:
It was, of course, my family dynamics have changed from a standpoint of we have three daughters and they're all out of the house. So my wife and I, when we decided to come to Omaha, we used the term that we're going to make this an adventure. And it's really fulfilled what we had hoped it would be.
Josh King:
You grew up on a family farm in Central Illinois. Where was that?
Tim Hassinger:
Near Bloomington, a small town called Flanagan. It's about 30 miles north of Bloomington, Illinois.
Josh King:
What kind of crops or products did your family produce?
Tim Hassinger:
As a kid growing up, we were the classic corn and soybean farm, but we also had livestock when I was younger. And then by the time I was in high school, we were just strictly a grain farm at that point.
Josh King:
Did that start with your parents or prior generations?
Tim Hassinger:
It started with my grandfather and then my dad took over the farm. And then my brother is farming that ground now.
Josh King:
Something you love, passionate about?
Tim Hassinger:
Absolutely. I really enjoyed growing up on a farm, the family all rallying together for this one common goal. So my favorite timeframe growing up in the farm was the harvest, the rush to get the crop out. I look back very fondly on those memories,
Josh King:
For folks who grow up and live on the Coasts, the rush to get the harvest out, is the image that we have of wake up at 3:00 in the morning, a valid one? What was it like?
Tim Hassinger:
Three might be a little aggressive for that, but definitely well before the sun comes up. And working late or working in shifts and my mother bringing meals out to the field. And you would take turns making sure that the equipment kept going, because there may be a rain coming down the road in a couple of days that you feel the need to try to get as much of the crop out before the rain comes, things like that. Those are really fun memories.
Josh King:
Do you have memories of your grandparents' generation or your father's generation were incredibly stressful? I mean, you're dealing with lean times and fat times and moments when the wealth of this year's harvest is going to be able to allow you to farm for another year?
Tim Hassinger:
Yeah, I do. Definitely, the risk of farming was felt. Now, as a kid, you didn't have a full appreciation of that. Now that I look back, I have a better appreciation for the stress that my mom and dad had to just pay the bills, the cash flow, if it had been a drought. And you mentioned earlier in your opening, as technology has come into agriculture, it's helped mitigate some of those risk. So the swings were more when I was a kid growing up. And so I do now better understand what at the time I may not have understood a stress being exhibited by mom and dad. I now have a better appreciation of paying the bills as part of that.
Josh King:
Is your brother still enjoying the work?
Tim Hassinger:
He is, he is. He's going to retire at the end of this year farming, but he's been farming for the last 25 years. My dad passed away about 25 years ago, so he took it over after he passed away. And it's been a great experience for him. It's something he really enjoys.
Josh King:
And what will become of that property when he decides to retire?
Tim Hassinger:
We are really excited, I have a cousin who is going to start farming. This will be his first time farming this amount of acreage, and he's going to be renting the land from us. So we're excited that it was able to stay in the family.
Josh King:
You mentioned that as a kid you weren't quite as conscious of the stresses that people of your parents' generation were going through to keep the crops growing and tilled. When as a young man, did you have a sense of the role that agriculture played in economic growth and indeed national security?
Tim Hassinger:
Well, I think you have it early that it's important, but over time you start to get an understand of the scale of it. I knew it from a local community economy because it was a farming community. So whether it was the car dealership or the restaurant, they were very dependent upon their farmer customers. So I knew it within a community early in my life, but as I got older, I started to recognize and better appreciate just how much importance is it from a global economy. That's the evolution that occurred
Josh King:
Was a degree in agricultural sciences from the University of Illinois, which you received, something that many of your friends pursued, or kids in the early '80s already beginning to look away from the Heartland and toward the Coasts?
Tim Hassinger:
No, most of my friends stayed in agriculture in some form, whether it was this type of a degree or whether it was going to farming. And for me, I was very confident that I knew what I wanted to do. I Wanted to get a degree in agriculture economics, because I wasn't planning on coming back to the farm, but I wanted to stay very close to farmers. So my expectation or plan was that I was going to be a farm manager where you would be working on the business side of farming and working with farmers, but not actually doing the farming. And I just happened to get a summer internship with Dow Chemical. And as you mentioned earlier, 33 years later, ended up doing something else.
Josh King:
What would you say is your first big break at Dow? The thing that sort of transformed your trajectory?
Tim Hassinger:
I was very fortunate to work with some people that really cared. And it started as a summer internship. And I love telling the story, because it's a culture that is what drove me to stay where I was at for 33 years. And it's something really I'm passionate about bringing into Lindsay. As a summer intern, I had several people that took a real personal interest in me. And as somebody had never been and lived in the city and had never been in a professional environment, I look back now and although even then I knew they were mentoring and helping me, now I realize how much they were mentoring and helping me.
Tim Hassinger:
But I love telling the story. 30 years later, I became the CEO of Dow AgroSciences. And I received a email note with a picture of one of the mentors I had who now was in his mid-eighties and was in a nursing home. All the people that I worked with back in that summer internship time 30 years earlier, had gone to this gentleman's nursing home room, got around his bed, took a picture. And they just had a little comment on the bottom of the picture, "Way to go, summer intern."
Tim Hassinger:
So, that type of culture is important in a company. And I see a lot of similarities in Lindsay Corporation of that deep root history and that care for others. And to me, that's an extremely important aspect of a company that you want to work at and you want to be part of.
Josh King:
So 33 years later, you're now CEO of Lindsay. I spent a good deal of time in Omaha, been to many College World Series and certainly have felt a sort of renaissance there over the past five years. Is this something you feel near your headquarters along Burke Street?
Tim Hassinger:
Yeah, we do. We just moved into a new headquarters two weeks ago, so-
Josh King:
Congratulations.
Tim Hassinger:
Thank you.
Tim Hassinger:
... new and fresh and all of that. It's not only a new facility for us, but it's a new way of working. The way we have structured the headquarters is bringing more collaboration. We're an organization that's driving to be more innovative. So we want more interaction between coworkers and our new headquarters reflects and is designed in that way.
Josh King:
Tell me about the management process in terms of you're now there for a year and a half or so and you're saying, "We're going to move into this headquarters. Here's how we're going to do things differently."
Tim Hassinger:
Well, the first thing is where are we going to move to? And we found two real exciting options, but they were very different. And so we got a group of 15 employees that were very diverse, whether it was from gender, discipline, tenure at the company. And we brought them together in the morning and we had a talk with them in a conference room that just, "We want you to go on this tour. We want you to look at it as a representative of the company. No need to come to consensus, just look at it from your view. And then at the end of the day, we're going to bring you back here and we want to hear your view. And although you're not going to make the decision, your input is going to have a lot of influence."
Tim Hassinger:
And so they did that and we came back and we got a strong view coming back from this group of employees of what they were looking for. And so we were able to take that input, the entire leadership team had their views, and then we did get professional help to come in after we had a small group of our leadership team just go around and look at a lot of other companies in Omaha of how they've designed their office. So we got that down to some key principles that we wanted to follow, and then we implemented the plan. And I got to tell you, the outcome has exceeded expectations. There's just a real buzz in our organization right now of how it looks. But more importantly, how it's causing us to change in how we work.
Tim Hassinger:
And I'll tell you a quick story, on the opening day we had a lunch for the entire group and I gave a opening talk. And one of the comments I made is, "I just want everybody to take a couple of minutes over the next two days to just reflect on what are you going to do different? And when you see me, tell me how you're going to do something different in your workday as a result of being in this new office." And I'll tell you what I've come to conclusion, so I walk around whether I'm going to go get a cup of coffee or I'm going to a conference room, and nearly every time I go out of my office, I've got somebody catching me saying, "Tim, this is what I'm going to do differently." So it's really positive to see just the openness to change and the excitement about doing things differently.
Josh King:
And what are you doing differently?
Tim Hassinger:
What I'm doing a lot differently is, we did not have an open area before in our prior office. So we have a really nice what we're calling a collaboration area. So I'm going out there and doing email. And obviously, I want people to stop by. So I'm going out each day whenever I have an open slot, let's say it's an hour, hour and a half on my calendar. Rather than sitting in my office and doing email, I'm going out to that collaboration area, grab a cup of coffee and hoping someone will stop by. And those discussions have been really rich of just people stopping by telling me what project they're working on or what challenge they're dealing with. And that's been a real great opportunity to get those kinds of discussions going.
Josh King:
You're here to celebrate the anniversary of the delivery of the first Zimmatic center pivot irrigation system. The Zimmatic system has been around for 50 years, but Lindsay has been constantly innovating and improving it. This is a video from about a half decade ago about variable rate irrigation, or as you call it, Precision VRI, that we came across on your website. Let's have a listen.
Speaker 5:
This is how it works, site-specific agronomic data ratings form the foundation of the plan. Custom application zones can be defined by clicking GPS coordinates on the field map or by importing coordinates from a handheld GPS device. These points form the boundary of an application zone, or polygons allowing you to prescribe a custom application rate. You can also define void zones to prevent irrigating ditches, ponds, or creeks, which saves water, chemicals and fertilizer and prevents runoff.
Josh King:
Now, I'm going to geek out for a second here because polygons and mapping, that the video later explains, interfaces with each individual spigot, so WiFi node. And it sounds like comparing my cell phone to two cans with a string tied between them. Can you walk us through how Lindsay developed its' irrigation and solutions from Paul Zimmerer's sons breakthroughs in the 1960s, to what we see now from 35,000 feet up?
Tim Hassinger:
The progression of the Lindsay Corporation really follows what we've seen is three different eras. And the reason this is top of mind is I go back to our new headquarters, we have a timeline that we put on one of the walls. And as we found all the information, we immediately first found the first era, which was the beginning, getting the first product developed, the manufacturing plant developed, et cetera. Then we moved to a global expansion. And today we are selling in 90 countries, we've got manufacturing facilities in seven countries. But that was the next era for Lindsay Corporation, it was expanding to global. And the third area is what we're in right now, which is the technology advancement. And in this space in irrigation, we're a market leader in remote monitoring. Being able to determine on your smartphone, is that pivot working? You can turn it on or off from anywhere as long as you've got connection or connectivity to your phone, you're able to manage that.
Tim Hassinger:
And now we've just recently moved into irrigation scheduling, taking that information and technology and going to the next level, being able to determine how much you should water, where in the field you should water and when. And so this gets into what you're referring to is variable rate irrigation. It's being very precise exactly on when that plant needs it. And what we're seeing from this technology is an increase in yield with on average 17% less water. So what's our focus? It's bringing technology to farmers that can produce more with less water.
Josh King:
Lindsay also offers a range of irrigation solutions to cater to farms, large and small, all of who recently received what they say is good news in the form of the 2018 Farm Bill. I want to hear from United States' Secretary of Agriculture's Sonny Perdue from last year.
Sonny Perdue:
This present, it is a great birthday present not only for me, but for all of agriculture. To give the producers, the ranchers and farmers across America, the peace of mind, going forward, they can make their plans in 2019, make their blenders and bankers proud of what they can plan for the underpinning of the safety net of crop insurance. Those kind of things is a big deal for agriculture. It's a big deal for the U.S. economy, the ag economy, for food security and for national security.
Josh King:
Now, Tim, I watched that speech unfold at the White House. It was December 21st, last year, really just about a month ago, it was getting overshadowed by coverage of the government shutdown that would begin the next day. Secretary Perdue expressed some concerns with the final version that passed with bipartisan support, but was overall pleased with the outcome. What are you hearing from the industry and your clients about how the bill is going to change agriculture going forward?
Tim Hassinger:
Well, the first thing you'll hear is just a relief that it was completed because this was a long journey to be able to get a final product ultimately into law. That safety net that Secretary Purdue referenced is extremely important for U.S. agriculture going forward. So it's definitely helped farmers in their discussions with their lenders, their planning. And overall, it's helped farmer sentiment, which is an impact on our business, making sure that the farmers feel good about their future going forward. This was a piece of the puzzle, so to speak, in terms of them feeling good about their plans going forward from on an overall financial side.
Josh King:
You mentioned the bill on Lindsay's January 8th Earnings Call. How is the funding of the bill going to impact your irrigation business?
Tim Hassinger:
Well, over the top, just what I mentioned, it helps farmer sentiment in terms of farmers putting their plants together. But within agriculture, there is components of the Farm Bill referred to as EQIP, that get into incentives around irrigation, ultimately with the goal of technology that will help irrigation be productive and utilizing less water.
Josh King:
Are you doing a lot of the lobbying to your senators and Congress people in the Nebraska delegation and other areas that you have influence, or is this more of the agriculture trade doing a lot of the work for you in Washington?
Tim Hassinger:
Oh, it's all the above. We're active in the political process in terms of representing what we believe our dealers and our customers needs. So we do participate that and we are in trade associations helping bring that voice and ultimately help the agriculture sector be represented in the political process.
Josh King:
Now that the Farm Bill has finally passed, and that was really the big check mark of last December, what next does Washington need to do for the American farmer?
Tim Hassinger:
We have a significant challenge with these trade conflicts that are out there. And given the fact that a large portion of agriculture is exports, getting that resolved, bringing stability and hopefully improved dynamics on pricing would be significant help for the farm community.
Josh King:
And after the break, Tim and I turn our attention from irrigation to those pressing trade issues and the other areas that Lindsay Corporation is providing solutions for, right after this.
Speaker 7:
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Josh King:
Welcome back Inside the ICE House.
Josh King:
Before the break, Tim Hassinger, the President and CEO of Lindsay Corporation was discussing the development of the center pivot irrigation system and how technology has changed modern farming. We've been discussing mostly US-centric aspects of Lindsay, Tim, so far, but the company has locations on every continent except Antarctica. What's your global growth strategy for the company?
Tim Hassinger:
Agriculture is a global business, and we want to need to be close to those areas where irrigation is needed or can provide value to those farming communities. So we do have a global network of not only manufacturing facilities, but also sales and service capabilities.
Josh King:
U.S., China relations have dominated much of the business headlines in 2018, and now into 2019. Lindsay opened up its' China operations in 2005 while you were actually in the region working for Dow AgroScience. Those of us old enough to remember film footage of Nixon going to China in 1972 could not have imagined how trade would expand in both directions in the 40 years since, but also through an enormous set of challenges. And at the beginning of this century, while you were at Dow, share with us what it was like to be leading an American company's foray into a country whose arable land represents 10% of the world's total, but which supports 20% of the world's population.
Tim Hassinger:
Well, the first thing that you see or recognize when you come into China and you're leading a business there is the complexity of it. And on the agriculture side, it's estimated anywhere between 500 to 600 million farmers. So the magnitude of numbers is what's so significant there. So simplifying your business is quickly becomes your top priority, or you just get lost in all of the complexity that comes from that. Given the fact that most farmers in China farm roughly one third of an acre, which in suburbia world, that's usually about the size of a lot, and so those numbers is what has to be managed when you come in.
Josh King:
Had you been immersed in China agriculture issues before Dow sent you over there?
Tim Hassinger:
I had traveled to China many times. I was what we referred to as a global business leader, so it would be the one to two times a year trip. But there is difference of living there and understanding that versus being someone who comes in for the one week trip and then goes back to the U.S. So I learned a lot of actually being there and better understanding the culture. And again, just dealing with the complexity that comes with a country with over one billion people.
Josh King:
You're a Midwestern guy, a son of a family farmer. How did you immerse yourself and assimilate into Chinese culture? Did you raise your kids there as well?
Tim Hassinger:
We did. We have three daughters and my wife and we all moved at the same time. So I think it would be fair to say the learning curve was steep for all of us. But at the same time, we learned a lot about U.S. culture. And it's the old phrase, in talking to a lot of different people that have lived outside their home country, that one of the biggest surprises you have when you move outside of your home country, you see where you grew up sometimes from a different perspective. And for me, that was one of the biggest unexpected learnings that I had.
Josh King:
So Tim, of all of China's arable land, only approximately 1.4 million square kilometers, or about 1.2% permanently supports crops. And you were saying earlier that these Chinese farmers are farming about a third of an acre. How does that compare to the United States and Europe, for example, and what's Lindsay's opportunity there?
Tim Hassinger:
Well, when you compare, and let's just compare China to the U.S., the U.S. farmer is using more technology. The U.S. farmer has significantly higher economies of scale, which is driving a higher yield. So there's a significant difference in output per acre or per hectare in terms of looking at the yield dynamic. But the other factor on irrigation is approximately 70% of the freshwater use globally in the U.S. would reflect this as used for agriculture. In China, it's closer to 90.
Josh King:
Wow.
Tim Hassinger:
So the opportunity to be self-sufficient through agriculture is much bigger challenge for China than it is for, as an example, the U.S.
Josh King:
Do you go over there still and try and share these insights and this knowledge and provide the innovation that can help them go from 90% of their water use down to a lower number using better technology?
Tim Hassinger:
Well, there's always some local cultural differences that have to be captured in the offering that you have. But the type of technology that we have, although I would describe the use of it today further behind in China than what it is in the U.S., we see that market progressing towards that. So we do bring a product that we believe matches better for what that Chinese farmer needs, and isn't always the same as what a U.S. farmer would need. And a lot of that is just the size and scale of a U.S. farmer compared to someone growing crops in China.
Josh King:
Today's headlines are dotted with news from people like Larry Kudlow, the President's top economic advisor, sharing details about the current status of trade negotiations. You were mentioning this right before the break. Has your business, on either the manufacturing or the sales side, been impacted by the current geopolitical concerns?
Tim Hassinger:
I think anybody in agriculture today has been impacted by that strictly because of commodity price impact, farmer sentiment, et cetera. So you have that dynamic. For us, a large part of our cost is steel. And so our key raw material cost has gone up as a result of the tariffs. So we've been impacted, I always say, on the incoming. And then, on the backside, selling to our ultimate customer, the trade conflicts have had a downward pressure on commodity prices. And in essence, the farmer's overall view going forward, they're concerned about the future. So all those dynamics get rolled in together.
Josh King:
Where are you manufacturing now?
Tim Hassinger:
We have a plant in the U.S., that's our primary plant. And we're-
Josh King:
Is that in Nebraska as well?
Tim Hassinger:
It's in actually specifically in Lindsay, Nebraska, which is where our company name comes from. We also have a plant in Brazil, in South Africa, Turkey, France, and China.
Josh King:
Over the last decades, Lindsay has also diversified its' business to include infrastructure solutions, such as the Road Zipper. If you Google Road Zipper, and I suggest you do, you'll find dozens of local news segments like this one from Rockford, Michigan.
Speaker 8:
Now you've heard me talk about how the construction zone on 131, between 10 Mile and 14 Mile has two lanes southbound in the morning and one lane northbound, and that's why you're getting a slow down right now. But in the afternoon, it'll be two lanes going north, but there are only three lanes available in the construction zone. Well, let's take a look at how MDOT does that.
Speaker 9:
There's a good chance you have never seen this machine ever before.
Speaker 8:
And you've probably never seen what it does. It's called the Road Zipper, and it's designed to do one thing.
Speaker 10:
What this machine does is it comes and it'll actually pick up the concrete barrier and move it over 12 feet to provide a lane.
Josh King:
So listeners who are local, Tim, to New York may have seen the Road Zipper helping with the construction traffic on the Verrazano Bridge, or our West Coast fans may see one on the Golden Gate Bridge. Tell me about the Road Zipper, obviously a need at some point during Lindsay's history to diversify. How many are on the road today and what growth potential is there for this product?
Tim Hassinger:
Well, when I first came into Lindsay, I was not familiar with the Road Zipper. And as I've often said, and many people will echo this too, the first thing when you see the Road Zipper is, is a wow. It's unique. and you have a real interest to understand how it operates. To me, the striking thing about Road Zipper is what it does and how it addresses what are some of the most significant trends and challenges for folks that are in the infrastructure business. It helps address congestion, and the classic example could be bridge. We're on the Golden Gate Bridge, is one example of this where the classic coming into the city traffic is more intense. So you're able to open up one or two lanes to allow that to free up more space. And then at the end of the day, come the opposite, when the heavy traffic is coming out of the city. So helping address congestion in that type of scenario is tremendous.
Tim Hassinger:
And we're even seeing now opportunities where Road Zipper is being involved earlier in the planning process. A good example is a state that's going to have a significant road construction program. How can Road Zipper be a tool to help manage and reduce some of the frustration and hassle that motorists will have of being able to navigate through road construction?
Tim Hassinger:
The other piece that comes out is safety. This is a steel concrete barrier that gives protection, whether it's a construction worker or avoiding head on collisions. Many times, a road system will just literally have plastic cones between the center, and you got traffic coming at each other 50, 60 miles an hour. And the risk of head on collision is much higher in that scenario. So we've seen a lot of different benefits that people have found with Road Zipper. So the interest level, as a result of that, is increasing.
Josh King:
How did it become part of Lindsay's portfolio?
Tim Hassinger:
It was a manufacturing connection, Lindsay was a supplier to the company that had developed and was producing Road Zipper. And that particular organization was looking to sell, and Lindsay made an offer. And ultimately, became the owner of the business.
Josh King:
So Tim, on your January 8th Earnings Call, you spoke about the company's increased focus on infrastructure. What's the future of Road Zipper? And how does the system fit together with their divisions, such as signage and light guard pulse, into growing the infrastructure side of your business?
Tim Hassinger:
So the infrastructure business has been an important part of our business, and the reason why is, it brings diversity to our offering. It's helped us, especially during a time here over the last four to five years when the ag economy has been in a downward trend. But what brought us originally into infrastructure is still a valid point and important part is the manufacturing leverage. So many of the parts or even the final product of infrastructure can be produced in the same plant that currently we're using irrigation manufacturing in. So, that leverage of manufacturing has been a real positive. And as we have learned and gone downstream with infrastructure, we see opportunities and we have the capabilities not only in manufacturing, but in terms of just like we do in irrigation, now we have the sales and the service capabilities in a broader scale. And that's why we see this as a growth opportunity.
Josh King:
If you had to project 50 years forward, what gets you excited about the innovations that you see lying ahead?
Tim Hassinger:
We have brought a real emphasis on innovation and ultimately bringing technology that our customers and users are interested in using. And that is in the irrigation and also in infrastructure. And a word that we're using in Lindsay is disruptive. And we're seeing opportunities of being able to bring in technology that's a allowing our customers, whether they're farmers or on the infrastructure side, at the Department of Transportation... And Road Zipper being a good example of that... where they can do their jobs differently as a result of the technology we're bringing. That's what excites us.
Josh King:
Give us a peak inside the R&D lab, what's the next big disruption in agriculture?
Tim Hassinger:
Well, the two areas that we are currently working on, I tend to talk about these a fair amount, whether it's on the Earnings Calls as an example, is an agriculture FieldNET Advisor. Being able to tell us what the genetics that you're using, combine that with your so oil type, know what the weather has been and what the forecast is going forward, connect that with the amount of water that you have irrigated with, and we can give you a daily recommendation on when to irrigate, which the results have led to higher yield with less water. And less water, tremendous news from an environmental standpoint. And to that, we've actually set a corporate goal, this is how excited we are of this, that by 2022, we're going to be able to save 700 billion gallons of water. That's more than what is in the Lake of the Ozarks. So helping from the footprint.
Tim Hassinger:
And of course, when that machine is not running, because you're using less water, the farmer has less cost. So there's an economic benefit of what we're talking about and there's also an environmental footprint benefit. Now let's move to the infrastructure side and you brought it up, Road Zipper is an exciting technology for us. And we have been very good at, what I always describe, solving existing problems. There's a road that has more congestion than what that local community wants to have or a bridge, and that need still exists and will exist going forward. But getting involved earlier in the planning process and being able to help, if we're referring in the U.S., helping a state do a better, more cost effective planning of what their program is going to be and how Road Zipper can be a piece of that, those are two things right now on top of us that we're excited about that we believe we can add a lot of value to our ultimate end customers.
Josh King:
Thanks very much for joining us in Inside the ICE House.
Tim Hassinger:
Thank you for the time.
Josh King:
That's our conversation for this week. Our guest was Tim Hassinger, the President and CEO of Lindsay Corporation.
Josh King:
If you liked what you heard, please rate us on iTunes so other folks know where to find us. And if you've got a comment or a question you'd like one of our experts to tackle in a future show, email us at [email protected] or tweet at us @NYSE. Our show is produced by Pete Asch and Ian Wolf, with production assistance from Ken Abel and Steven Porter. I'm Josh king, your host signing off from the library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
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