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Business Observer Friday, Jun. 3, 2016 4 years ago

Fuel for growth

The assembly line at Air Products is far from standard factory operations. Turning that ingenuity into a robust workforce is a constant challenge.
by: Mark Gordon Managing Editor

Executive Summary
Company. Air Products Industry. Manufacturing, liquefied natural gas Key. Hiring skilled employees is biggest challenge.

Mark Evans, growing up in Acrefair, a small town in Wales, couldn't wait to turn 16.

That's when he could sign up for an apprentice program at the local Air Products factory. The company makes rocket-size machines that process liquefied natural gas.

Evans, now 50, remains with Air Products 34 years later and is a plant manager and executive. Based in Manatee County, he's traveled the world on projects and assignments for Air Products, a $9.9 billion publicly traded global manufacturer based in Allentown, Pa. Along the way, he's worked with some cutting edge clean and natural gas technologies.

While fulfilling, Evans realizes his career choice is a rarity today. His own son, a 16-year-old like he was back in the U.K. when he went to work, is thinking about college, not the trades.

“We lost a group of people who want to be tradesmen, who want to be craftsmen,” says Evans.

For Evans, that comment is more than nostalgic.

The shallow labor pool of skilled manufacturing in the region is Evans's biggest challenge, by far, in his role at the helm of the massive, $57 million Air Products facility in northeast Manatee County. Five buildings totaling more than 300,000 square feet on 32 acres, the facility is across the street from Port Manatee on U.S. 41. Says Evans: “This area isn't famous for its skilled and trained welders.”

The area also isn't known for being a manufacturing hotbed. But Air Products is a big step toward altering that narrative. The coil-wound heat exchangers the firm makes, which are half the length of a football field or longer, are unique for both the region and the oil and gas and energy sector.

Bradenton Area Economic Development Corp. President and CEO Sharon Hillstrom says Air Products' decision to open a plant here is the type of move that resonates in the site selection industry. Hillstrom, who helped put together an incentives package to lure Air Products to Manatee County, says former Enterprise Florida President and CEO Gray Swope told her just that. “'This one will put you guys on the map,'” Hillstrom says Swope told her at a Jan. 9, 2014, Air Products grand opening event, attended by Gov. Rick Scott and other officials.

Adds Hillstrom: “If a company invests significant money in your community, that speaks volumes about what you can offer.”

Creative work
Evans has put a good amount of time into building a workforce for Air Products in Manatee County. The facility now has about 180 employees, up from five when it opened. Positions vary from welders who can handle heavy aluminum, which Evans says is a niche skill, to human resources personnel. “We built a workforce from scratch,” says Evans.

The company has found employees mostly through referrals from current employees and area technical colleges, including Manatee Technical College, Pinellas Technical College and Suncoast Technical College in Sarasota. MTC, says Hillstrom, launched an aluminum-welding curriculum Air Products officials helped create. Workforce organizations including Career Source Suncoast and CareerEdge also helped train Air Products employees.

A key recruiting tactic, beyond salaries above the median wages for most jobs, is workspace that's the antithesis of the current millennial-driven, hipster cool open office trend. Air Products, instead, offers a job doing hard and intensive, yet interesting and creative work that utilizes proprietary, next-generation energy technologies. The final product, says Evans, is an amazing engineering feat.

“We invest a lot in people,” says Evans, “and hopefully they will return the investment by staying with us a while.”

Employees who stay get to work on Air Products' core product: liquefied natural gas heat exchangers that span 15.5 feet in diameter, are 180 feet long and weigh up to 500 tons. The exchangers, in use at gas facilities in 15 countries, including multiple remote locations, unlocks natural gas through a cryogenic liquefying process. That process makes it economically feasible to ship the gas worldwide, say Air Products officials, so it can be put to use for consumers. Clients are oil and gas companies and some governments.

The exchangers are made in an assembly-line-like process, going from building to building. It typically takes 24 to 26 months to build one unit, says Evans. The company made 100 exchangers over 45 years, through 2012, at its Wilkes-Barre, Pa., facility. That plant remains open.

A plate roll bending machine inside the Air Products facility in north Manatee County can transform a sheet of steel into a circular cross section. It's used for fabrication of the company's liquefied natural gas heat exchangers. Courtesy photo.

Big move
But that facility's limitations, mainly the distance and expense to move exchangers from the factory to a port for shipping, was a significant obstacle at Air Products, says Evans. It took five days to move an exchanger 187 miles on rail and roads, for example, from Wilkes-Barre to a port terminal in Fairless Hills, Pa.

Company officials sought a site on or near the Gulf Coast, to be closer to clients in Louisiana and Texas. With a package of $1.7 million from Florida and another $680,000 from Manatee County, Air Products found its spot in July 2012. Later that year the company bought the 32-acre site for the complex, for $6.03 million. “This area won the process,” Evans says. “Everyone in the local area and state was really helpful.”

A key factor was the combination of available space to build a facility to its own specifications that's also close to a shipping terminal, in Port Manatee. The new Air Products Plant, says Evans, is bigger than the one up north, to make room for new and advanced exchangers. It includes several 75-ton cranes to help handle the machines. “This facility takes away restrictions on what we can build,” says Evans. “These things keep getting bigger and bigger.”

But while the size of each liquefied natural gas exchanger can go up, production volume, because of the complexity of the manufacturing process, can be limited. There are currently five exchangers at the Manatee Air Products facility in production. When the machines are completed, two are headed to Texas, another pair is going to Louisiana and one more to Russia. The first one will likely be shipped in September, says Evans, with the rest going out by May 2017.

Evans declines to disclose how much each exchanger costs, only to say it's in the multimillions. And given the cost, size and production process, it makes sense that the sales cycle for new units could last two years. The volatility in the oil and gas sector exacerbates that issue.

Evans, whenever another sale comes in, says Air Products will be ready to build. “We are waiting for next order,” says Evans. “We are chomping at the bit.”

At a glance

Air Products & Chemicals

Headquarters: Allentown, Pa.

CEO: Seifi Ghasemi

Year founded: 1940

Employees: 20,000

Businesses: In more than 30 industries from industrial gasses to adhesives to medical oxygen for hospitals. Company has more than 750 production facilities and 170,000 customers.

Markets: Operations in at least 50 countries

2015 revenues: $9.9 billion

Symbol: APD; recent share price: $143.07

Market capitalization: $30.75 billion

Sources: Air Products, Google Finance

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