North by Northwest
Business is booming at Norco, the United States’ largest regional gas and equipment supplier and its specialty gases division, NorLab. Helen Carmichael reports from the company’s headquarters in Idaho.
In its Northwestern heartland, many of Norco Inc.’s stores combine safety equipment sales with medical gas supply. The company’s medical division supplies hospitals, nursing homes and a significant base of homecare patients in the region, to whom it offers respiratory, obstructive sleep apnea and rehabilitation technologies. Norco is unique in that, compared to its competitors, it supplies a considerable amount of liquid oxygen to users from its own ASUs.
Within its region the company supplies medical, specialty and industrial gases, but its disposable line of calibration gases under the NorLab brand has a further reach: easily shippable, this product line goes to customers worldwide. Where lines with medical, bulk industrial and safety applications are growing nicely within Norco’s territory, the unbounded NorLab specialty gases are a particular area of interest in terms of growth potential.
NorLab is Norco, Inc’s specialty gas division, producing and distributing calibration mixtures and pure specialty gases in refillable and non-refillable cylinders since the late 1970s. It has a full product line including pure gases to levels of 99.9999 percent purity, multi-component hydrocarbon mixtures, environmental, industrial hygiene, medical and special application mixes, as well as compatible gas control equipment.
The potential is so dynamic at NorLab due to its outreach. “Our specialty gas goes by FedEx basically all over the world from Italy to Mexico, to Brazil, to Canada,” says Norco’s president Ned Pontious.” We sell through our NorLab network.”
Source: Norlab
Although these products currently make up less than five percent of overall sales, they are growing rapidly at 15-20 percent annually, Pontious explains.
Mission critical at NorLab
NorLab has a number of high profile military contracts including the Idaho National Engineering Laboratory, famed for research into nuclear energy, and the Hanford site in Washington, where reactors produced plutonium for over four decades, and which is today a cleanup site for processes required to transform raw uranium into plutonium for bombs.
The gases NorLab provides for these sites are safety-critical, and so NorLab is audited at the most stringent level by these organizations. “Even welding shielding gases used in decommissioning are considered safety critical, and so are treated as specialty gases in terms of the paperwork trail and levels of purity required,” explains quality manager, Jim Ross.
NorLab is currently involved in work both in Wyoming and in Canada in Edmonton and Calgary looking at hydrocarbon standards related to the coal, oil and gas industries.
Significant sums have been invested in upgrading the division’s infrastructure, even throughout the recent economic downturn. The division’s catalog is available online, and many products can be purchased online, too at www.NorLab-gas.com. “We’re in the process of developing a new e-commerce site to allow us to do web-based ordering,” Pontious explains. The company is also in the final phases of introducing a Computers Unlimited barcode-based tracking system to all of its cylinders (with the exception of the disposable line).
Investments and strategy
In addition to the significant levels of investment being made in NorLab and its operations, it’s been both a busy and progressive period of development for the Norco enterprise as a whole.
A privately owned business, Norco has a legacy of re-investment which, along with its long-serving employees, is a significant factor in the company’s continued growth and success today. The company’s chairman and CEO Jim Kissler says, “In 2008, we were plowing more money back into this company than we ever had, right into the teeth of that recession.”
This remarkable move has certainly made a difference to employees and customers, with expansive buildings and state-of-the-art equipment at a number of neighboring sites, particularly around the Boise headquarters. In addition to acquiring and upgrading a number of buildings, and building a flagship store, Norco also invested in an enviable state-of-the-art high pressure palletized fill system from Weldcoa housed in a new warehouse facility.
The company was also in the process of investing over $20 million in a new air separation plant and acquiring the Gas Plus organization, the biggest Norco acquisition to date of around $47 million. Kissler says, “It didn’t hurt us.” This was a rare occasion where the company did opt to take on some debt to pay for its investments - it usually reinvests its earnings. “For the most part, we are cash and carry,” Kissler jokes.
According to Pontious, the company is growing again after taking a dip in revenues of around seven percent in 2009 (compared to around 25 percent for most gas companies). Norco was insulated from the worst of the recession by its diversification - while industrial sales dropped, the homecare division held steady. “We weathered that storm and then in 2010, we were able to go positive in growth again where a lot of companies (in 2010) didn’t even make up what they lost.” Double digit growth is now the order of the day at Norco once again.
Harvesting the sky
As earlier described, Norco has undergone a busy period of expansion and development.
The company’s ASU in Nampa, ID produces 130 tpd and helped the company take a major step forward in the US gases business upon its construction in 2002. According to Pontious, the only problem with it has proved to be that it wasn’t large enough. The plant makes merchant liquid, but it also has a pipeline to a large electronics plant customer, Micron Technology, which also uses NorLab specialty gases and liquid nitrogen. “We ran 3 1/2 miles of pipeline under the middle of the city through a golf course - it was a pretty cool project,” Pontious says.
After three years of construction, Norco completed its additional air separation plant in Moses Lake, WA in October 2009. This second ASU produces 300 tpd - 150 tons of liquefied nitrogen, 150 tons of liquefied oxygen, and seven tons of liquefied argon each day. It also serves as the distribution hub for up to 20 long-haul truck drivers when running at full capacity. Upon the plant’s completion, Kissler described, “We harvest the sky, by freezing the atmosphere and separating it into oxygen, nitrogen and argon.” Pontious added, “Moses Lake is a great area for Norco, because of its good access to highways, reliable source of electricity and business community. We’re excited to be here.”
Source: Norlab
Norco management meeting: employees from across seven states recently met to talk about their goals. Despite the distances involved Kissler aims to get them together every two years.
Plans are now underway to construct and build a third ASU which will supply on-site nitrogen only, to a large polysilicon plant in eastern Idaho. The plant will be on stream in late 2011.
Norco is also doing it’s part in the ‘green’ economy by selling hydrogen which is derived from wind power. Through a marketing arrangement, Norco is selling the hydrogen manufactured by Synthetic Energy, a local firm that has installed and operates a wind turbine system to produce hydrogen. This arrangement has been in place for several years now and is very reliable, Norco explains. All of the hydrogen that Norco markets in the southern Idaho area comes from this source, and is effectively ‘green’ hydrogen.
Optimal plant
Specialty Gas Report covered Norco’s quest to find and build the perfect fill plant back in Q1 2010, and I was delighted to have the opportunity to tour it in person.
Plant manager Ken Goicoechea said the new plant, housed in a large, dedicated facility in Boise, was working out extremely well. The plant features special fill islands dedicated to specialty gas, medical oxygen and industrial gases, and a semi-automated liquid filling area. “The upgrade to a fully palletized facility has reduced accidents,” he says, not to mention offering a vastly improved working environment, which is brighter and more spacious, with further room to expand built in. “We love this new facility - it’s a great place to work,” says Goicoechea.
Like many employees at Norco, he tried working for Norco, loved it, and stayed for the long haul. Norco has deep roots in the Northwest and, all being well, will remain independent when the time comes for the next generation of the Kissler family to take the helm.
The Norco Story
Originally the welding supply division of Nordling Auto Parts Company based in Boise, Idaho since 1948, Norco Inc. was born in 1968 when Larry Kissler, who had been with Union Carbide’s Linde Division, bought the business.
A desire to move back to the western United States where he felt at home, along with the opportunity to own his own distributorship were the two key reasons, according to his son and successor in the business, Norco chairman and CEO Jim Kissler.
Over the coming years, Larry Kissler teamed up with Dan Steele, who became general manager and then president. Norco grew through acquisitions, expanding from Idaho into Montana in 1974, eastern Oregon in 1981, and Central Oregon in 1983. Jim Kissler bought the company in 1985, and together with his management team continued to expand the business, adding locations in Nevada in 1987, eastern Washington in 1988 and 1996, and also making further business purchases within its existing territory.
Norco didn’t simply take existing businesses under its wing, it also made them shine. “What helped us to energize those acquisitions was how we go to market,” Jim Kissler explains, “the use of our outside sales people, the use of our marketing and then the opportunity to expand the product lines.” It was not unusual for sales to grow by 50 percent in the acquired businesses once Norco took them on.
NorLab became a division in its own right in 1990. Norco gained locations in Utah in 2001 and built its own air separation plant in Nampa, ID in 2002. The company today generates over $200m in annual revenues, has over 800 employees and operates over 56 branches in seven states.
Have your say
You must sign in to make a comment