Tuesday, July 15, 2008

Fire & Explosion Protection, ATEX Forum

Plant managers including health and safety personnel that are seeking additional information concerning explosion and fire protection at their facility that generates combustible dust will find the Bulk-Online Powder/Bulk Portal Forum on Fire & Explosion Protection, ATEX, very helpful.

Numerous topics in the ATEX forum have been posted concerning the prevention and mitigation of combustible dust fires and explosions from professionals around the world. ATEX, or ATmosphères EXplosibles(French) is the European Union directive concerning combustible dust, which applies to best engineering practices (ATEX 95) and workerplace health and safety standards (ATEX 137) in potentially explosive atmospheres such as flammable liquids, gases, and vapors.

This is where the disconnect currently is, at manufacturing facilities in the United States that handle combustible particulates solids which generate combustible dust. Not realizing and acknowledging that combustible dust is under the same umbrella as flammable liquids, gases, and vapors that create explosive atmospheres is a recipe for disaster. Such as was experienced February 7, 2008 at the catastrophic Imperial Sugar Refinery explosion and over 60 combustible dust fires and explosions that have occurred since then.

The Industrial Fire, Safety and Security Conference held at the Reliant Center in Houston, Texas on February 4-6 2009 will bring together a diverse spectrum of EH&S, HazMat, security, rescue, medical, and other emergency management stakeholders to a premier event in conjunction with providing the knowledge and information that combustible dust is synonymous with potentially explosive atmospheres. Lets break the disconnect in the prevention of future preventable and predictable combustible dust related fires and explosions occurring in manufacturing facilities throughout the United States.

Sunday, July 13, 2008

Private Equity Manufacturing Sector Meltdown

With all the plant shutdowns in the manufacturing sector one begins to wonder when the economy will hit bottom especially without a reserve chute to arrest the devastating free fall and adverse economic damage to local communities.

Big Picture Emerges
Recently, while tracking combustible dust fires and explosions at manufacturing facilities, the Combustible Dust Policy Institute noticed plant shutdowns and the enormity of the situation is on scale more damaging than any combustible dust fire or explosion. A plant shutdown is a total loss. At least in the majority of combustible dust incidents, the workforce survives.

Most Americans have never heard of the towns such as Fairfax or Stevenson, Alabama. There's dozens of other towns like these throughout the America's heartland experiencing plant shutdowns and leaving a void less visible than a lunar landscape. At least with the moon there is talk of maybe going back.

Manufacturing Sector Gamble
Private equity leveraged buyouts of the manufacturing sector reaps phenomenal financial returns for institutional and private investors. Any financial investment is a gamble with it's highs and lows in the financial market. Like getting dealt a couple bad hands at the poker table it's only sensible to gather one's chips and cash out.

Now with the economy in the doldrums, a similar situation is taking place with private equity cashing out or reorganizing their manufacturing sector portfolios. Investors can move on to a more suitable investments yet the nation's workforce in the manufacturing sector has no such option with a plant shutdown.

Disturbing Metaphor
Instead our manufacturing sector's destiny is literally going down the drain. Metaphorically, a prime example would be Eljer toilet manufacturing plant in Ford City, Pennsylvania (population 3,451) where it was reported last Thursday that the plant, which is in the portfolio of Sun Capital Partners a leading private equity firm, may shutdown after nearly a century of operations, resulting in nearly 150 employees without a job.

Plant shutdowns such as these don't reach the major news networks and besides who has ever heard or cares about what is going on the east bank of the Allegheny River, in Ford City, PA? Yet when these small towns with plant shutdown appear on the map a trend begins to emerge like connecting the dots, which is a big picture affecting all Americans and not just the local economy of Ford City.

Private Equity Portfolio
Private equity interest in Eljer began in 2005 after Jacuzzi Inc reported an operating loss of $30.7 million on sales of $150.5 million for the fiscal year ended Oct. 2, 2004. Shortly thereafter, Jacuzzi sold it's Eljer operations to an affiliate of Sun Capital Partners, a private investment firm. For the last three years Sun Capital have maintained Eljer in it's financial portfolio.

Three months ago American Standard, Crane Plumbing Holding Corp. ("Crane") and Eljer Holding Corp. ("Eljer") merged as affiliated portfolio companies of Sun Capital Partners, Inc. ("Sun Capital"), with Bain Capital Partners, Inc. ("Bain Capital") as a minority partner in the consolidation.

Bright Future
The future for the merger was looking bright especially with the annual market research report related to the home improvement industry provided by ReportLink.com highlighted that American demand for plumbing fixtures and was expected to increase nearly 3 percent annually for the next five years to $11.4 billion . On the downside, imports gained a higher share than local production with imports disturbingly increasing 17 percent annually between 1996-2006. Where are the import tariffs in protecting America's manufacturing sector?

Eljer's workforce surely must of felt their jobs were secure following the merged affiliation. Especially in the press release when the CEO of American Standard Brands stated, "that the merger would offer a stronger , more compelling value proposition to it's customers." If many customers no longer have a job then what sort of value proposition will exist in the future?

Americans need to take a hard look of whats occurring in the nation with the meltdown of the manufacturing sector and ensuing loss of jobs to foreign countries. Alternative solutions in lieu of plant shutdowns must enter into a dialogue amongst our leaders on Capital Hill. With the current presidential race at the top of the agenda it may be another year before any damage control occurs. Can we afford to wait that long?

Saturday, July 12, 2008

Tax Incentives Causing Plant Shutdowns

Hundreds of job seekers at the Liberty Center in Lancaster, Ohio (population 35,353) lined up to apply for several dozen jobs that will be opening when U.S. Corrugated opens it new cardboard manufacturing plant in November.

Ironically on the same day U.S. Corrugated with 20 full service manufacturing facilities in 14 states and 1,000 employees gave notice to its 75 employees at it’s Greensboro, North Carolina corrugated sheet plant that it will be closing down six days later with no reason according to the Greensboro News Record. Like pawns on a chessboard assets are moved around yet in this game the local economy suffers.

The Greensboro plant was established in 1981 and was one of three sheet feeder plants that were owned by the LINPAC Group a U.K-based company. In 2003 the LINPAC Group became a portfolio company of Montagu Private Equity through a debt and mezzanine package from Deutsche Bank.

Private equity transactions through their leveraged buyouts of manufacturing plants has it’s advantages and disadvantages. Lately over the past year many plants owned by private equity have been closing due to sour economic conditions with reasons given such as, “ realignment of capacity in order to streamline processes and be competitive in a global marketplace.”

Six months earlier, in January 2008, prior to the recent Greensboro plant shutdown, LINPAC Inc. a business unit of UK-based LINPAC Group Limited was acquired by Four M Holdings LLC (Four M), an investment vehicle controlled by Dennis Mehiel, also a super delegate in the 2008 Democratic presidential nomination Additionally, in 2004, Mr. Mehiel was New York State Chairman for the Democratic Presidential ticket of Massachusetts Sen. John Kerry and North Carolina Sen. John Edwards.

After the acquisition LINPAC INC. changed its name to U.S. Corrugated, the same private company that acquired Box USA, Solo Cup and The Sweetheart Cup Company. Four M Holdings LLC (Four M ) has completed more than 25 North American transactions in the past two decades.

The economy is very favorable in Lancaster, Ohio, especially when the city is providing U.S Corrugated with a 15 year 100 percent tax abatement, which includes $1 million in incentives. At the state level, are over $500,000 of grants and job-creation tax credits according to news report from the Columbus News Dispatch.

Greensboro, North Carolina is not so lucky as the workers become casualties mired in the investment vehicles sold, traded and acquired as in the recent acquisition that U.S Corrugated completed in March 2008 with the purchase of Anderson Packaging Inc. (API), a Kentucky-based corrugated packaging manufacturer.

2008 Plant Shutdowns Google Map

Photo Credit: Draco2008 @ Flickr

Friday, July 11, 2008

Expoquimia-Combustible Dust ATEX Seminars

Expoquimia, one of the largest Chemical Trade Fairs in the European Union will be held October 20-24 2008 in Barcelona, Spain. Professionals across a wide spectrum of the chemical industry will host technical seminars and lectures for attendees and participants.

Activities at Expoquimia include instrumental analysis, biomaterials, sensory chemistry, biotechnology, new solvents, purchase management, and combustible dust explosion protection/prevention educational tracks..

Stakeholders and professionals who are responsible for plant safety in regards to the hazards of combustible dust generated from combustible particulate solids will have an opportunity to attend the 4th International Industrial Safety Conference (Jornada de Seguridad Industrial Atex) part of the combustible dust educational track.

Xavier de Gea, Director of LPG Prevención y Protección de Explosiones and coordinator of the combustible dust track has organized two daily of sessions with the support of the European Safety Management Group. Utilization of coal for power generation is becoming an important and vital feedstock with the issue of tight oil supplies in the global market. Potential hazards of combustible dust coal explosions exist with the increase utilization of coal.

The first day of the 4th International Industrial Safety Conference will cover diverse topics that include engineering standards that are necessary while handling solid materials such as coal as outlined in the European Union ATEX directive. Area of interest will include:

  • Risk analysis of Solid combustible

  • Self combustion parameters on coal and biomass

  • Coal grinding in the light of the new ATEX directive

  • Explosion protection reclosing devices

  • CO2 / N2 inerting as Preventive Explosion Protection at coal grinding
ATEX, or ATmosphères EXplosibles, originates from ATEX 94/95 is the regulatory technical requirements in the European Union that require manufacturing facilities to have specific equipment and protective systems that are located in explosive atmospheres such as combustible dust, flammable vapors, gases, and liquids.

Another aspect of the regulatory framework concerning combustible dust in the European Union is ATEX 137, which protect workers from the hazards of potential combustible dust explosions and fires in explosive environments. This would be analogous to OSHA protective standards that are currently being debated in Congress following the Imperial Sugar Refinery explosion.

Policymakers, regulators, legislators, trade associations, and safety professionals in the United States can learn from the EU ATEX in a manner that would assist in developing a comprehensive combustible dust program throughout the nation in preventing and mitigating future combustible dust incidents plaguing the nation's manufacturing sector.

Attending the 4th International Industrial Safety Conference at the Barcelona Expoquimia would be an ideal opportunity for all stakeholders in gaining an understanding of the complex issue of combustible dust, which is a problem afflicting all of our global trading partners. Book your flight and listen to some solutions before the combustible dust monster arrives for Halloween.


Tuesday, July 1, 2008

Ethanol Plant Explosions Continue


With over 160 ethanol plants in operation and 43 plants under construction the hazards of explosions and fires are omnipresent. Since July 2007, six reported ethanol plant explosions and fires have taken place in the United States. Last week the Anderson Corp. plant in Sheridan Township, Michigan exploded in the dryer area causing injuries and damage to the building.

Last December the distillers grain dryer was destroyed at the Pine Lake Corn Processors facility in Steamboat, Rock Iowa causing millions of dollars in damage. Luckily no injuries or fatalities occurred. The contractors at the Princess Anne, Maryland GreenLight Biofuels biodiesel plant were not so lucky less than two months ago when one fatality and one injury occurred after an explosion while adding a methane line during hot work.

Production and refining of ethanol and biodiesel is a new industry and will require that the owners and operators implement the same safety production procedures as the petrochemical refining industry

The current learning curve is now proving to be very costly in human lives and adverse economic effects to the community.

Ethanol Plant Explosions and Fires Google Map


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