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Industrial Piping Specialists Unveils Castlo Warehouse
STRUTHERS, Ohio -- The CEO of Industrial Piping Specialists Inc. “couldn’t say enough” in praise of the Youngstown/Warren Regional Chamber, the Castlo Community Improvement Corp., the area’s skilled workforce and the welcome the community has extended the Oklahoma company.
“We couldn’t really ask for more,” said Ty Westfield of the $1 million incentive package that secured his company’s $10 million investment to open its 55,000-square-foot warehouse at the Castlo Industrial Park.
“We couldn’t ask for a better team,” he added as reporters and videographers surrounded him Thursday for an interview following a ribbon cutting at the site.
Industrial Piping Specialists provides carbon and stainless steel pipe -- from a quarter-inch in diameter to 36 inches, flanges, fittings and valves “to support manufacturing companies who are building processing equipment, treating equipment, compressors to move gas through the pipelines,” Westfield said.
“For years most of that equipment has been built in the Gulf Coast area,” he continued. “With the way the economy has grown here over several years, those manufacturers have seen the need to move their manufacturing capabilities to this area, and because of that, they have invited us in. That’s why we’re here, to support their efforts and their manufacturing.”
Among its customers are Houston-based Exterran Holdings Inc., which opened its $13.2 million fabricating plant earlier this year in Youngstown (READ STORY), and Dearing Compressor and Pump, which continues to expand capacity at its Youngstown plant (READ STORY) to accommodate demand for the oil and gas compressor stations it builds.
Fourteen are employed at the Industrial Piping Specialists’ warehouse here, 12 of them residents of the Valley. As many as 60 workers could be employed here, Westfield said, depending on how markets develop in the emerging Utica shale play.
“The oil and gas industry as a whole is kind of a roller coaster – it’s up and down,” the CEO explained. “But it’s favorable right now. All of the producers seem to feel we’re in a good market and we’re here to support them.”
IPS operates 11 warehouses in the United States, six of them in Texas, as well as two sales offices, one in the Pittsburgh area. The company was founded in 1986.
Inventory at the warehouse accounts for about $8 million of the company’s investment here. “This is a highly capital-intensive business. There is a lot of heavy equipment, a lot of racks and a lot of pipe,” Westfield said.
“It’s taken us at least six to nine months to get the facility into shape for us to actually be in business.”
Work at its Castlo operation actually began two years – “once the raccoons began to leave,” he joked. “It’s an old building. When we got here, there were many wild animals in the building – raccoons in particular.”
Castlo completely refurbished the structure, known as Building C, and tore down two other structures, also abandoned decades ago by the former Youngstown Sheet & Tube Co., to make space for a pipe “lay-down” yard.
“Most of our pipe comes from the Houston area,” said Bob Sims, IPS senior vice president, who led the press tour of the facility. “Anything we can do to save on freight costs is important to us, and there is a rail spur coming in here. This was one of the attractions for us coming here.”
IPS has purchased pipe made by Vallourec Star (formerly V&M) “for more than 20 years,” Sims added, and Vallourec’s new Youngstown pipe mill is another reason IPS added its warehouse here.
The company has a five-year lease on the building with a five-year renewal option. Mike Hosa, executive director of Castlo, declined to disclose its terms.
Castlo spent $1 million to make improvements at the site and refurbish the building IPS now occupies. Most of the funds came from Castlo’s $5 million Jobs Ready Site Grant from the Ohio Development Services Agency.
“We had a lot of work to make the building ready for them,” Hosa said. “We had to put down approximately 35,000 square feet of high-strength concrete, redo the lighting, put in a truck well along with a break room, office area, new restrooms and renovate the existing offices. We also had to prepare three acres for the pipe yard.”
Industrial Piping Solutions’ operation at the 120-acre Castlo Industrial Park, created in 1978 in the wake of the steel shutdowns, is “a win-win for them and us,” said Mayor Terry Stocker. IPS employees pay his city’s 2% income tax and the city earns additional tax revenue, he noted.
But more important, “One you get an anchor like IPS and they’re involved in the oil and gas industry, everything begins to fall into place,” Stocker said.
“There are things on the horizon, companies that are looking to locate here now, and I believe it will happen.”
Copyright 2013 The Business Journal, Youngstown, Ohio.
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