Eagle Manufacturing expansion imminent - Beckley, Bluefield & Lewisburg News, Weather, Sports

Eagle Manufacturing expansion imminent

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LINDA HARRIS / The State Journal. Eagle Manufacturing produces a full line of safety cans, cabinets, poly drums, material handling products and other receptacles. LINDA HARRIS / The State Journal. Eagle Manufacturing produces a full line of safety cans, cabinets, poly drums, material handling products and other receptacles.
LINDA HARRIS / The State Journal. U.S. Rep. Shelley Moore Capito, R-W.Va., tours with Eagle Manufacturing president, Joe Eddy. LINDA HARRIS / The State Journal. U.S. Rep. Shelley Moore Capito, R-W.Va., tours with Eagle Manufacturing president, Joe Eddy.
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Even without the shale drilling boom, Eagle Manufacturing's Joe Eddy said the 120-year-old Wellsburg company would have been looking at ways to grow operations.

But with oil and gas igniting the American economy, Eddy said expansion was almost a no-brainer.

"From a manufacturing and a business owner standpoint, I'm very excited about the next 20-30 years," he said. "We have opportunity, not only with the expansion of the energy industry but also the chemical industry. 

"A manufacturing renaissance, it's a reality here — we have an opportunity to rebuild our full manufacturing base, not only chemical manufacturing but all of the associated manufacturing base that can benefit from lower cost energy and raw materials."

Eddy said a strong manufacturing base is crucial to a strong economy, and restoring America's is vital. He sees enormous opportunity for the Mountain State, "but the right things have to happen."

"One of the keys is that we need to keep as much of our raw material development in the state as we can — the value-added proposition for natural gas liquids is significant," he said. "It's my belief, if we can keep the ethane produced here in West Virginia in West Virginia, it's going to mean at least a 10:1 value added to our economy."

Founded in 1894, family-owned Eagle produces a full line of safety cans, safety cabinets, secondary spill containment products, poly drums, material handling products and cigarette receptacles.

Known for its consistent quality and value, Eagle designed and manufactures everything in its product catalog and has more than 3,000 domestic distributors.

"Our ability to change is the No. 1 reason we've been successful through 120 years and four generations of a family business," he said. "It's not just our willingness to change, it's our eagerness, and that change continues today."

The company now has 180 employees, including about 25 hired over the past year.

"One of our biggest barriers to growth historically has been space," he said. "When the old Banner Fibreboard property became available two years ago, it answered a lot of our growth issues — it gave us the ability to do a five-year growth plan."

But it was a brownfield. Given the magnitude of the proposed investment, it needed to have a clean bill of health environmentally. With the involvement of city officials and local planning groups, they were able to acquire the property for roughly $1.2 million. It now houses a 40,000-square foot warehouse and a 1,200-square foot office, with another 60,000 square feet of development potential in reserve. It also tripled Eagle's rail car capacity.

Eddy said he's planning to start Phase II, which will transition it into a fully operational distribution center, in the next 12 months.

"We have six product lines," Eddy said. "Right now, we've only moved our plastic product line into the distribution center."

More recently, he said, Eagle had purchased the old Archer Daniels Midland plant in Wellsburg. Built circa 1901, he said Eagle upgraded electric and heating in the 50,000-square foot building.

"Our intention is to expand our existing product lines, and this will give us the capability to also add additional lines," he said. "Expansion is important to Eagle, it's given us space to grow our manufacturing processes as well as our employment level. It's important to economic development because it's adding jobs, adding to the tax base and adding to the gross state product."

Eddy said less than 1 percent of Eagle's sales are in West Virginia, "so 99 percent of everything we sell brings new money back to West Virginia." 

That's not to say the Mountain State isn't a good market for Eagle products. He said it just means "we dominate most of our product lines nationwide, if not worldwide."

Eddy said much of Eagle's success has been due to its ability to develop synergies between old and new: In the 1990s, for instance, it decided to introduce extrusion blow-molding, a process used to produce hollow parts, in the plant. Integrating old and new technology "proved our ability to change our processes as well as our products," he said, and wouldn't have been doable without workers willing to take on the challenge.

"This synergy has had another very positive effect on Eagle," he said. "The time from product concept to initial production has been reduced from an average of 24 months to less than 12 months in many instances. This has given Eagle the ability to offer (more than) 100 new products in the past five years and has helped us build a foundation of growth for the future."

He credits Eagle's ability to set itself apart from low-cost competitors to its focus on product research and development, design capabilities and its reputation for innovation, though he concedes that the ethane cracker being considered in Parkersburg would be icing on the cake.

"Instead of piping the ethane outside West Virginia — right now, most of it is going to Canada or to the crackers on the Gulf Coast."

A cracker converts ethane in natural gas liquids into ethylene, used in the manufacture of plastics. Eddy said Eagle needs polyethelene for its manufacturing process.

"I believe we've got the natural gas liquids capacity to support as many as three world-class crackers in the region," said Eddy, who trained as a petroleum engineer. "I'd like to see us build out our infrastructure in West Virginia so (businesses) like ours can benefit from the lowest-cost raw materials to make our products."

Eddy says he expects to really start seeing the benefits of those natural gas liquids around 2017-18, "when more cracker capacity is built out."

"We're adding three additional plastics process units; they're already on order," he said. "That will add about 30 percent more capacity by the end of the year in our plastics division."

And in the next five years, he said it's "fair to say we're looking to spend another $5 million a year for expansion." Some of that growth will be directed at the oil and gas sector.

"We're looking at some new product lines we can expand into to support oil and gas expansion over the next 20 years," he said. "It's nice to have a positive outlook on the future again."