In a move that will create more resin demand for its parent company, North American Pipe Corp. is retrofitting a newly acquired PVC pipe plant in Yucca, Ariz., which is scheduled to come on-line in the first quarter of 2009.
The leased facility, in its initial phase, will produce about 120 million pounds of PVC pipe annually, with pipe diameters ranging from 2-36 inches.
The retrofit represents a $30 million investment, and the plant will employ about 75.
It is one of two new PVC pipe plants in development for North American Pipe, a wholly owned, subsidiary of Westlake Chemical Corp. Both companies are based in Houston.
The pipe manufacturer is building a large-diameter-pipe plant in Calvert City, Ky., where Westlake also operates a PVC resin-making facility. That pipe plant is expected to open in the second half of this year and will have 55 million pounds of capacity.
When the plants are complete, the company's annual PVC pipe capacity will be about 985 million pounds, according to a Westlake news release.
The two new plants will give North American Pipe a total of 10 PVC pipe plants throughout the U.S., said David Hansen, a Westlake senior vice president, in a March 19 telephone interview.
``The additional plants will help us to further our strategy of vertical integration,'' Hansen said. ``This is an industry that we know. We believe, based on our view of the marketplace and talking to our customers, that we will be well-positioned to meet our customers' needs on a coast-to-coast basis.''
The Arizona plant is part of a larger effort by pipe manufacturers to put themselves in position to serve California and the entire West Coast, said Tom Walsh, a Houston-based consultant to the pipe industry. He cited plant placements by various companies in Utah, Nevada and Arizona.
Despite a downturn in construction, pipe will continue to be in demand, he said.
``If you look at the long-term results of PVC, it tends to grow [a little faster than gross domestic product],'' Walsh said. ``The fundamental PVC pipe business has been successful for North American Pipe.
``And pipe isn't going away,'' he said.