Parent Firm's Global Reach, Stricter Air Quality Rules Have Stock Smiling
4:30 am, October 15, 2007
Last week, engineers at Stock Equipment Co. in Chagrin Falls were starting to design 20 automated systems for feeding coal into the boilers that will help power an expanded oil refinery in Zhenhai, China.
The customer is the giant Chinese oil supplier Sinopec Corp., and the big order reflects just one of several growing international markets for Stock, which makes industrial pollution control equipment and systems that deliver and regulate the amount of coal fed into boilers.
William Downs, president and CEO of Stock, said overseas orders currently make up about 40% of the company's business. And orders from abroad have been on the rise since Stock was acquired three months ago by Schenck Process Group, a diversified global manufacturer based in Germany.
Besides its manufacturing and headquarters operations in Chagrin Falls, where it employs 240, Stock operates manufacturing plants in China, Great Britain, India and Japan. It slowly has cultivated customers such as Sinopec, but Mr. Downs sees potential for more international business because of the global reach of Schenck, which operates 25 manufacturing plants and sales offices around the world.
"We thought we were fairly global until that acquisition," he said.
According to Mr. Downs, the purchase of Stock by Schenck for an undisclosed price has opened doors to regions such as Australia, Eastern and Central Europe and Latin America. As a result of the deal, Stock last month notched its first sale in Brazil.
Stock has averaged an increase in sales of about 15% every year for the last few years, Mr. Downs said, and he expects that trend to continue next year. Mr. Downs said Stock has jobs booked into 2010, but he would not disclose sales for the privately held company.
Launched in 1929 in an office in the Hanna Building in Cleveland, Stock in the last four years has doubled its work force in Chagrin Falls to the current 240. The manufacturer employs 400 companywide and plans to add at least 12 jobs here in 2008.
Eye on China
Mr. Downs said the burgeoning economy of China provides a big opportunity for sales of Stock's pollution-control and coal-feeding equipment because that nation is building the equivalent of two, 600-megawatt coal-fired power plants every week.
The Chinese government is trying to get a handle on its pollution problems such as acid rain and heavy smog, Mr. Downs noted. "I was in Beijing a few weeks ago," he said. "They still have a long way to go."
So does some U.S. power providers when it comes to meeting more stringent federal air quality regulations.
Last week, Stock customer American Electric Power Co. reached a record settlement with U.S. Environmental Protection Agency that calls for the company to spend $4.6 billion to reduce drastically the air pollution at its operations in Ohio and other states. However, AEP spokeswoman Melissa McHenry said the amount of the settlement is deceiving because it reflects part of a $5.1 billion capital investment program AEP initiated on its own more than three years ago.
AEP is retrofitting eight coal-fired plants to meet a U.S. EPA mandate that power plant in certain states reduce sulfur dioxide emissions by 40% and nitrogen oxide emissions by 60% by 2010. Ms. McHenry said AEP is about halfway done with project.
Ralph Harris, Stock's marketing manager, said more stringent environmental rules require utilities to account for the quality and quantity of coal used in their boilers, which is good for Stock's business.
Right now, there are 150 coal-fired power plants in the planning stages in the United States, Mr. Downs said, so the company expects an uptick in product demand to continue in U.S. markets.
