UPDATED — In late spring, Uponor North America will begin construction of an $18 million expansion of its manufacturing operation in Apple Valley, Minn., to meet demand for the forecasted growth of cross-linked polyethylene (PEX) pipe.
The 88,000-square-foot project, which will be adjacent to the company headquarters, will entail refurbishing 34,000 square feet of existing space — a former school bus facility — and building a 54,000 square foot addition onto it. Uponor officials are pursuing green building certification for the facility, which will house lean manufacturing and office space and some new equipment. It should be completed before December with an occupy time in early 2016.
Uponor will make PEX pipe for the plumbing, fire sprinklers, radiant heating and cooling, and hydronic piping systems at the facility. Uponor North American President Bill Gray said the company is seeing significant growth from commercial and residential construction and the expansion will ensure it can meet forecasted growth for PEX systems.
“The real opportunity for us is the penetration of PEX into commercial space as the pipe is more accepted,” Gray said in a telephone interview. “We're leading the charge, I believe, in taking product to that space. The initial forays were into institutional — outside of hospital — schools, universities, multi-family and then hospitality after that.”
Commercial plumbing applications followed by hydronic distribution are the lead growth areas for Uponor, Gray added. Early on, volatility in copper pricing served as a conversation starter about PEX, he said, but even with prices relatively low as of late, the company hasn't seen any conversion back to the metal. Gray said builders are finding PEX benefits beyond price.
“Really, it comes down to labor savings, the overall reliability of the system, our connection method. Its things like no torches,” Gray said.
Compared to use of PEX for commercial plumbing, hydronic distribution is in its early stages of adoption. In this system, pipes transfer water from heating or cooling sources, such as boilers or chillers, to baseboard radiators, fan coils, and the like to regulate the temperature inside a building. Gray said using water instead of air to heat or cool a structure is more energy efficient.
“Water is a far better medium to transfer heat energy and cold energy,” he said. “In places where it makes sense — low temperature heating and high temperature cooling — PEX really shines.”
Uponor North America is celebrating its 25th anniversary this year in Apple Valley and the outlook is good, according to Jyri Luomakoski, CEO and president of the parent company, Uponor Oyj, which is based in Vantaa, Finland. He said in a news release that the North American region “has consistently boosted profits and seized market share” in the residential and commercial segments.
Uponor has hired more than 130 new employees in the last three years in Minnesota, bringing its workforce in the Twin Cities area to 500. The company will be hiring again for the new facility but Gray said he doesn't yet know how many and how soon.
“In the long term, it will be a significant number of jobs created,” he said, adding Uponor is under consideration for economic incentives to assist with the expansion.
The undertaking represents the biggest single construction project the company has done in North America as far as manufacturing space, according to Dan Hughes, Uponor's director of real estate. Sustainable features will be incorporated to improve how the facility performs and to pursue green building certification through the Leadership in Energy and Environmental Design (LEED) program.
One of building innovations Hughes said he is most excited about — 140 solar roof panels — marks Uponor's first tangible investment in renewable energy but it won't contribute to LEED credits as much as it will a state credit through the Made in Minnesota program. The solar panels will come from Silicon Energy in Mountain Iron, Minn.
“It's going to be a fairly large installation but in terms of it putting a big dent in our consumption, it's not a huge contribution because we use quite a bit of power,” Hughes said. “We'll take the power from the array and use it in some way, maybe to charge an electric vehicle that goes between buildings. We want people to see here's how we're using the power and how it benefits us and the environment.
“We hope to learn a lot about the efficiency of the system, how it performs in different weather and seasons. It will be a good educational process and we will get some benefit from it.”
Wherever possible, the company will use its own technology, such as AquaPEX plumbing, hydronic piping, Uponor pipe for reclaimed water, which will take runoff rain water from the flat roof and use it for bathroom fixtures, and offices warmed by radiant heating in which PEX tubing carries warm water to a specific zone of a building.
Uponor has one LEED-certified building — a distribution center in Lakeville, Minn. — that was completed in 2009 to meet the base-level requirements.
“This project has a few more opportunities so we're pursuing enough points to achieve LEED silver,” Hughes said.
Uponor ranked No. 19 in Plastics News' most recent survey of North American pipe, profile and tubing extruders, with regional sales of $228.2 million. Since then, the company has released new financial data for 2014 that shows a 16.2 percent increase in North American sales to $265.2 million.