Owens-Corning Fiberglas Corp. has sold its five-plant tank division, the largest U.S. maker of underground, fiber-reinforced plastic tanks for storing gas at service stations, to a group of six investors. Stephen T. Harcrow, who led the investor group, is now president and chief executive officer of the company, renamed Fluid Containment Inc. He is a former executive at Baker Hughes Inc., a Houston firm that supplies the oil well and mining industries.
Although the market is large - several hundred thousand refueling sites have leaking tanks, according to the Environmental Protection Agency - Fluid Containment is reducing excess capacity by closing two of the five tank plants, in Auburndale, Fla., and Valparaiso, Ind.
The company will continue operating three plants, at its headquarters in Conroe, Texas, and in Bakersfield, Calif., and Mount Union, Pa.
Employment will drop from 350 to about 250.
The plant-closing decision prompted Fluid Containment's main competitor in FRP tanks, Xerxes Corp. of Minneapolis, to challenge the top-spot status of the former Owens-Corning tank business.
``The projected shutdown of two plants will make Xerxes a clear leader in the industry,''Xerxes said in a statement in response to a question from Plastics News.
But a spokeswoman said that Xerxes, which runs six plants, would not provide its sales. Fluid Containment should have sales of about $50 million a year, according to William King, that firm's vice president of opera-tions.
The service station market for FRP tanks, which do not corrode, took off in the 1980s, when the EPA identified pollution from leaking tanks as a nationwide problem. More than 350,000 FRP tanks have been installed at U.S. service stations, according to the Fiberglass Petroleum Tank and Pipe Institute of Houston.
Owens-Corning announced Jan. 9 that it had completed the sale, but did not disclose terms of the deal.
Glen Hiner, Owens-Corning chairman and chief executive officer, said the sale completes a strategic realignment to refocus attention on core businesses. Owens-Corning will continue to serve the tank market with raw materials, he said.
O-C officials are looking at new markets, including FRP liners for retrofitting steel tanks, above-ground storage and tanks for petrochemical companies.
Owens-Corning said more than 200,000 of its tanks have been installed in the past 30 years. One of O-C's first installations has gone down in FRP tank history. Buried in 1964 under a gas station in a Chicago suburb, the tank was dug up in 1991. After testing the vessel, engineers reburied it at another gas station.
That corrosion-resistant tank became ammunition in the market-share war between FRP and steel. According to the Steel Tank Institute of Lake Zurich, Ill., steel accounts for 61 percent, and FRP 39 percent, of underground storage tanks installed in recent years. The numbers came from a survey last summer of 265 tank installers by Jennings Group Inc. of Columbia, N.J.
FRP advocates say their share is about 50 percent.
Steel advocates argue that steel dominates at independent service stations, which use smaller tanks.
The FRP vs. steel debate heated up in 1988, when EPA gave service stations and fleet refueling areas 10 years to remove tanks that leak. The replacement market will not evaporate suddenly in 1998, however, since some fuel stations will miss the deadline. Fourteen percent of retail gas stations are not expected to meet EPA requirements, according to a survey by Havill & Co. Inc., a Toledo consulting firm.
The former Owens-Corning plants use a semiautomated process to make tanks. Chopped glass is mixed with an isophthalic-based resin and dropped from above onto a rotating steel mandrel. The resin-glass mixture is sprayed on to make end caps.
Some management officials will move from Owens-Corning in Toledo, Ohio, to Fluid Containment headquarters in Conroe. Members of the investor group that bought the company are new to composites. Besides Harcrow, they are: Ernest H. Cockrell, president of Cockrell Oil Corp. of Houston; J. Taft Symonds, chairman of Maurice Pincoffs Co., an oil-field technology firm in Woodlands, Texas; and officials of three investment firms - Thomas D. Simmons, founder of Simmons, Vedder & Co. of Houston; Stephen M. Youts, managing director of Avondale Partners of Houston; and Richard Robbins, president of National Investment Inc. of Torrance, Calif.
