ST. LOUIS — A year-long effort by Rock Hill Mechanical here and United Association Plumbers and Pipefitters Local 562 has paid off with what the contractor and union hope to be a long list of ethanol plant projects.
Site work has started on the Laddonia Ethanol Project, which is being developed by a 600-member farmer-owned co-op, East Central Ag Products. Total project cost is $70 million for the plant, which will produce 45 million gal. of ethanol from 17 million bushels of corn.
The Laddonia ethanol project has been in the works for almost five years. With the passage of the energy bill, construction of ethanol and bio-diesel capacity has moved to top priority in the United States.
Currently, 31 ethanol plants are under construction. Much of this work has gone to non-union contractors, which is why Rock Hill and the union are so happy about the contract.
"We're working hard to go after the billion-dollar ethanol industry," said Mike O'Mara, assistant business manager for Local 562 in Saint Louis. "One of our signatory contractors, Rock Hill Mechanical, which has done a lot of work for Anheuser-Busch and breweries in Puerto Rico and Mexico, recently won some pre-work fabrication for the Laddonia Ethanol project."
The United Association nationally is pursuing projects in growth industries, such as ethanol, and is selling itself on its reputation for quality and job safety from its training programs.
Rock Hill Mechanical is just getting started on the job and will perform fabrication of pipe bridges and process modules at its fabrication shop in Macon, Mo.
"We've been trying to get into it for a year," said Robert Schnitzer, vice president of Rock Hill Mechanical. "We went to workshops and conferences, and we even sponsored one in Atlanta, so our name was getting around. We also had help from our Missouri senators to get the contacts with the correct people. So we started getting packages to bid."
Part of the problem for union contractors, Schnitzer said, is that they haven't pursued ethanol work as hard as their non-union counterparts. A plant such as the Laddonia Ethanol Project, however, is not won just on low price, he said.
"We have a 100,000-sq.-ft., state-oftheart fabrication facility, and we have been doing process modules for 10 years for a lot of brewery and pharmaceutical customers," Schnitzer said. "We have shipped modules all over the world. We are competitive against fabricators in the United States and Mexico. Bio-fuel is right up our alley."
But price is still a part of it. "You have to have the qualifications and make a helluva investment to have the facility, plus you have to be competitive," he said.
Schnitzer said that process modules for food and beverage tend to be the most complicated. The firm has fabricated process modules to make rubberized asphalt and has worked with specialty metals such as Hastelloy, a nickel-chromium-molybdenum-tungsten alloy that's resistant to industrial chemicals.
Hundreds of ethanol plants are in the planning stages, Schnitzer said and 60 to 70 have been approved. He predicted that the "market will go crazy" because of tax incentives in the energy bill.
The House-Senate Joint Committee on Taxation redefined what constitutes a "small" ethanol producer entitled to get a 10- cents-per-gal. tax credit, from 30 million gal. to 60 million-gal. per year.
"We're getting a lot of inquiries on Rock Hill's fab shop capabilities and we always stress the quality that comes out of these shops," O'Mara said. "You may get a cheaper price somewhere else, but if you've got to rework it on the job then you could double your price."
Local 562 covers 67 counties in Missouri, essentially the eastern half of the state of Missouri and has a workforce of about 3,200 active members.
The Laddonia Ethanol project is expected to be operational by the end of 2006.