V&M Mill Nearly Complete; Exterran Moves Ahead
YOUNGSTOWN, Ohio – The president and chief operating officer of V&M Star says that his company has hired about 90% of the workforce needed to staff its new $650 million pipe mill here, and the first products from that plant should be rolling off by December.
"We're looking to ship our first commercial products around the end of this year," Joel Mastervich said Thursday at the Youngstown Ohio Utica and Natural Gas, or Young, Conference and Expo. "And in the first part of next year we'll be bringing on all our facilities, including the finishing, and finally hope to be at full capacity toward the end of next year."
Mastervich reported that the mill successfully completed its first billet piercing June 29, which validated the production equipment and processes at the plant. The rolling mill should be finished later this month.
"I have no doubts in my mind that when we bring this facility up, it will be very, very successful," he said. "You can feel it."
The mill is projected to employ about 350 full-time, and the vast majority of the hires are from the Mahoning Valley, Mastervich said. "Over 80% of our people are coming from the tri-county area," meaning Trumbull, Mahoning and Columbiana counties. "We have some coming across the border in Pennsylvania.
Mastervich also reported that the company has increased spending throughout Ohio, contracting with 350 vendors across the state -- 100 of them from the Mahoning Valley. "Our spending is up 32%, and $250 million was spent on Ohio suppliers [in 2012],” he related.
V&M announced in February 2010 that it would construct its new mill next to its existing plant in the former Brier Hill Works of Youngstown Sheet & Tube Co. The company produces pipe and tube mostly for the oil and gas industry.
New technology that allows energy companies to drill horizontally through tightly packed shale formations 7,000 feet deep have increased demand in the pipe market, Mastervich said. The deeper and longer these companies drill, the more pipe they're going to require at a site.
And, these companies are also going to require high-quality, smaller diameter pipe, which is what the new Youngstown mill will manufacture.
The new V&M Star mill sits directly atop the Utica shale and is also within a short drive of gas exploration in the Marcellus shale in Pennsylvania.
V&M is also active in some of the larger shale plays across the country, including the Permian Basin and Eagle Ford plays in Texas, and the Bakken shale in North Dakota.
"We're in our infancy," the COO said of the Utica. "You can see the potential."
While the V&M mill here prepares to launch its first round of commercial pipe, another company related to the oil and gas industry, Exterran, expects to have its new plant running by early next year, said Sean Clawges, director of global manufacturing expansion.
"It's a really nice site, and things are starting to progress over there," he said of Exterran's nearly $18 million plant at the Salt Springs Road Business Park.
The Houston-based company fabricates equipment used at drill sites, and the new Youngstown plant is built specifically for the purpose of manufacturing production equipment for gas wells, not compression equipment.
"We'll stock a standard product, so when a customer calls we have them," Clawges said. "It's ready to go. We put it on a truck. And it's there the next day."
He noted that the company scouted sites in Pennsylvania and West Virginia, but decided on the Youngstown area because of its workforce, transportation network and incentives offered by the city and state.
Clawges reported that the office building at the new Exterran site is nearly finished and should be opened by October. Meanwhile, the steel skeleton is up at the plant's paint shop, and steel has been delivered to the site to begin construction of the company's fabricating plant.
He reported that the new plant will initially employ 100 at full capacity, and expects to bring on some 75 workers by January and February. "When we look out to the future, there's a lot of opportunity here,” he said. “I could see going to a second shift and adding more people."
That could boost employment to 150 at the plant, he told the conference. The company is looking to hire welders, machine operators, assemblers, fitters, inspectors and engineers.
Clawges also said that the project is likely to grow over time should demand persist in the Utica and the Marcellus shale.
"We've designed this facility knowing that we're going to add on," he said, as he displayed a large site map with an outline of possible expansion plans. "There's a pretty good chance if we continue to grow like we've seen over the last couple of years, we plan to double the size of the facility in the coming years."
Copyright 2012 The Business Journal, Youngstown, Ohio.