KT Pacer in Cedar Rapids is dominating livestock feed transportation

It’s often surprising to learn that a proven leader in a large-scale manufacturing segment has been operating in your own backyard for years, virtually unknown to the larger community.

Such is clearly the case with KT Pacer.

The company, which incorporates a 50,000-square-foot facility on a 12-acre site at 5555 16th Ave. SW in Cedar Rapids, is the largest manufacturer of aluminum feed bodies and feed trailers in the transportation industry.

“As of today, roughly 50% of the (livestock) animals in the U.S. are fed from a KT Pacer trailer, whether that’s turkeys, chickens, pork, dairy cattle, even catfish,” said Divisional President Carl Kirpes.

And all those KT Pacer trailers originate in Cedar Rapids.

It’s remarkable, in a way, to think that a company with such a large percentage of its market segment has been working in the community for decades, while flying under the radar in relative anonymity.

“My grandpa owns a farm and it’s still in the family, but I still didn't know about KT Pacer feed transportation equipment, even though I grew up here in the state,” Mr. Kirpes said. “It’s really neat, in terms of the global and national impact that we're having. At the end of the day, we are feeding the animals that are feeding the world. It's heartbeats that we're dealing with. We’ve got to keep those animals fed, and our trailers and equipment are a key part of that value chain. It’s really impressive that the people who make that happen are right here in Cedar Rapids each day.”

A lengthy company history

While operating in its current form since 1973, the company traces its roots to 1939, when Roy Gaddis Sr. founded the Highway Equipment Company in Cedar Rapids.

In the late 1940s, the company began building feed and grain bodies under the New Leader brand. Following the sale of Highway Equipment in 1958, Roy Gaddis Jr. established Gaddis Bros. Manufacturing, producing the Pak-Master line of trailers until the early 1970s.

Pioneering the industry with the lowest center of gravity in traditional design feed trailers since 1973, Donald "Butch" Gaddis continued the feed body-manufacturing legacy with CEI Pacer. Remarkably, all three equipment brands – Hi-Way, New Leader and KT Pacer – are still operating in Cedar Rapids.

In 2012, CEI Pacer joined forces with a management investment team led by Jim Stoelk, Dan McDowell and Jim Ross. The collaboration led to groundbreaking innovations in design and manufacturing, such as the NSL feed body in 2014 and the Pacer Production System in 2016. The company tripled in size between 2012 and 2018. In 2018, Kentucky Trailer, a leader in custom trailer manufacturing, along with parent company Alleghany Capital Corporation, expanded into the feed transportation market by acquiring CEI Pacer. The move marked a significant milestone, enhancing the company’s capabilities, footprint and product offerings.

In 2019, the company acquired the animal feed transport division of Birmingham, Alabama-based Warren Manufacturing, further expanding the company’s geography.

Then in January 2020, the company unveiled a unified identity – KT Pacer – combining the Kentucky Trailer company legacy with Pacer, one of the company’s most well-known product lines.

At this point, Mr. Stoelk, Mr. McDowell and Mr. Ross were looking to step back from daily operations, so in June 2021, Mr. Kirpes joined the company as president, coming from Marathon Petroleum Corporation, where he helped establish the company’s then-new Houston office.

“I had a former colleague reach out to me and asked if I'd be interested in leading the organization in Iowa,” he said. “My wife and I are both from Iowa, and she said ‘heck yeah, we're interested.’”

Finally, in 2022, Berkshire Hathaway completed the acquisition of Alleghany Corporation, bringing new capabilities and resources to KT Pacer. The company is now part of Berkshire Hathaway’s Marmon Holdings, a division with 11 different segments and more than 120 business units, including rail, water and transportation equipment.

KT Pacer's legacy of consistency, innovation

Coming from the oil industry to agricultural manufacturing, Mr. Kirpes said one of the elements of KT’s business model that he found most attractive is its fiscal consistency.

“The oil and gas industry is very cyclical in nature,” he said. “I've worked in markets that were tied closer to automotive, building products, housing starts – again, very cyclical. This business is tied more towards population growth and protein consumption. Even in a recession, you may switch from one type of protein to another, but whether you have chicken, a hot dog, a pork chop or a steak, you're still consuming protein. I wouldn’t say this industry is recession-proof, but it's very recession-resistant, and I think that's very attractive to associates, investors and customers. The industry in general has grown between 4% and 5% year over year on average.”

While declining to offer specific details on annual unit sales or revenue, Mr. Kirpes said the COVID-19 pandemic slowed production to a degree – but most of the slowdown was temporary.

“In the COVID timeframe, we saw a dip, but it was more of a deferred demand, where people were choosing to reinvest and keep a trailer on the road longer than what they would have otherwise,” he said. “As that economy turns now, we’re seeing an uptick. The sales didn't go away. They just got postponed a bit.”

KT Pacer has also become known industry-wide for innovations in design and features, Mr. Kirpes said. The augers that move grain through the trailer have become more efficient, and the company’s newest 2024 trailer combines lighter overall weight with faster feed offload speeds while retaining durability, longevity and a low total cost of ownership.

“It's not a huge jump, but it’s value-added to the marketplace,” he said. “If I talk about some of the bigger innovations that we've seen in the industry, one of the biggest ones was developing a lower center of gravity trailer. When you’re able to bring the center of gravity down, if a driver were to take a turn too fast, the trailer would slide, versus roll over. You can't prevent everything, but you would rather have a slide than a rollover. We have one of the lowest centers of gravity in the industry with our trailer. Still, there's a balance between making sure that you can have a trailer that brings the center of gravity down but still has sufficient ground clearance.”

Other than a switch to largely aluminum tanks (mounted to steel chassis) about 20 years ago, the company’s newest models have introduced a number of options, from a remote-operated control panel that facilitates trailer unloading from the truck cab, to a chassis spray-down system known as the “Pacer disinfectant system” that prevents transferring diseases from one farm operation to another.

“It’s how our engineering and production teams have (used) customer input to identify a need in the market, and then been able to design a solution for that,” Mr. Kirpes said. “You're always trying to balance that lighter weight while still having the durability and fast offload, in addition to making sure that it's economically feasible for the customer. What's amazing here is when our teams have found ways to create products and options and things that are able to achieve multiple areas at the same time. That isn't an easy feat.”

KT Pacer products range from a straight-truck mounted tank, measuring around 13 feet, to a 50-foot semi-trailer model. Nearly every unit is customized to a client’s individual needs and configurations, Mr. Kirpes said. Equipment is available in both all-bulk and bag/bulk combination designs, with hauling capacities from two tons to 35 tons.

The company’s facilities have been expanded several times over the years to meet increased demand, and the company has additional room on-site to accommodate future growth as needed, Mr. Kirpes said.

Brisk operations, positive culture

With approximately 175 employees in Cedar Rapids and another 30 at a parts facility in Trussville, Alabama, KT Pacer operates 24 hours a day, five days a week, with flex shifts available on Saturdays. In addition to new products, KT Pacer also offers a wide range of on-site parts and repair services, often rehabbing older trailers to extend their lifespan.

Most of the company’s products are sold domestically, but Mr. Kirpes said about 10% are shipped overseas – a proportion that can vary depending on shipping rates and other market factors.

The overall KT Pacer customer base is approximately equally split as well, between large-scale companies like Tyson or Pilgrim and individual farmers.

The company also strives to maintain a positive workplace culture, Mr. Kirpes said, from employee outings to Cedar Rapids Kernels games, distributions of “KT Pacer swag” and holiday parties – this year’s event, as an example, featured a casino theme.

“I go back to Dan, Jim and Jim and what they've done to get to know each associate by name, to know what their kids do,” Mr. Kirpes said. “That connection with the team on a day-to-day basis goes even further than some of those other events we mentioned – those are just an additive to that day-to-day connection.”

For Mr. Kirpes, the workplace culture at KT Pacer is as valuable an asset as the products it makes.

"When I came to Pacer, I really valued the culture that had been established here,” he said. “We say that individuals provide the potential, but it's really the teamwork that creates the results. We want to continue to recognize the associates that make that happen.”

Even the larger corporate ownership has provided benefits for KT Pacer, with additional resources combined with a substantial degree of operational autonomy. It’s a mix, Mr. Kirpes said, that has allowed the company to add more than 50 employees in recent years – a trend he expects to continue.

“There are a lot of businesses in the Corridor creating products that add a lot of value to the world, and for me, it's been awesome to be a part of a company like KT Pacer,” Mr. Kirpes said. “We can be an entrepreneurial company and make decisions that are in the best interest of our associates, our suppliers, our customers and our shareholders, but we still have the resources of a company like Marmon and Berkshire Hathaway that we're able to tap into and reinvest. Having worked at other medium-sized organizations and Fortune 500 companies, I don't see a lot of this type of a business model, where you're able to bring both of them together.”