- change ups
New name and a new game plan
Empire started life in Grand Rapids in 1933 as Empire Fire Brick Co. It grew with Midwest industry, eventually becoming known simply as Empire Refractory, a major player in the application of refractory linings in industrial furnaces and heat treatment kilns. But then American factories began to close when much of the work was outsourced to cheaper sources of labor in Mexico and Asia.
Now Greg Peak calls his company Empire Solutions, and it sees a chance for survival in repairing the cracked concrete, potholes and decaying highway overpasses all too common on Michigan highways.
Peak, son of one of Empire's former executives and now its president, said the industrial fire brick market in Michigan "is in pretty bad shape. We saw the infrastructure market coming on, and we decided to jump right in." He said that late last year, Empire began to seek highway and bridge repair jobs, and now some of the federal ARRA stimulus money "has come our way. I think there's a lot more coming down the pike."
Empire is still very active in Indiana and Ohio, installing refractory linings for industry. Frankly, he said, the company is doing better there than in Michigan. Refractory work is still about 90 percent of what the company does, he said, but it is working to increase its infrastructure jobs.
Peak said that over the last 10 years or so, "the number of manufacturing plants in Michigan has steadily declined. Within the last year or two, the automotive market has suffered. Our customers are suppliers to the automotive industry — I should say, our traditional customers."
Empire sells and installs refractory material that makes a fireproof lining in industrial ovens. It can be applied with a gun, rather than having to make forms and pour it like conventional concrete, and it sets up very quickly. Peak says the material used, called Phoscrete, and method of application make it an excellent substitute for regular concrete in repair of damaged highway concrete and cracking bridge structures. The material is manufactured near Detroit by Stellar Materials Inc. of Boca Raton, Fla.
In 2003, one of Michigan's major industrial fire brick manufacturers, Harbison-Walker in Ludington, shut down. That "was one of the signs to us in the last five years that things were not looking good for the refractory market," said Peak.
Annual sales at Empire had been about $8 million to $10 million, said Peak, but those were "not as high last year. That was the first ratcheting down of the market that we realized … the end of 2008. The first quarter of '09 has been pretty tough."
Empire has offices in Cleveland and in Gary, Ind., as well as Wyoming, and currently employs about 40 or 45 people total. It is a union shop, noted Peak, so "when we are busy, we may have 100" employees at work.
Peak said Empire recently bid on and lost a Zeeland industrial job. Empire would have charged about $32,000 to line an industrial furnace there, but a furnace was made in China and shipped to Zeeland at a cost to the customer of only $8,000.
Empire Solutions did some bridge and pavement repairs early this year, including part of U.S. 31 at Muskegon. He expects they will "more than likely" get some contracts for winter repairs later this year.
In cold weather, the routine patch job for a pothole is "cold patch," in which a road repair crew shovels some asphalt into the hole. A highway repair expert told the Business Journal several months ago that under some winter conditions, potholes have to be cold-patched more than once a day in high traffic areas.
"Our materials can be used in foul weather conditions," said Peak, "in cold weather temperatures where the DOT can't use conventional concrete" because it will freeze. Unlike asphalt, he said, the Phoscrete repair is permanent.
At the U.S. 31 job, he said, traffic would have been shut down in one or more lanes for two or three days while the damaged concrete was removed and re-poured, and then allowed the required time for it to cure. Peak estimated the total cost might have been about $10,000. He said Empire Solutions did the job for about $3,500 — "and we did it all between 9 a.m. and 3 p.m."
The Phoscrete "has a very tenacious bond," said Peak. It encapsulates any existing rust from exposed rebar, which incorporates the iron oxide into the chemical bond. Rebar — steel reinforcement rods — is embedded in poured concrete to give the concrete greater strength. But, Peak said, it is rusting rebar that causes the concrete to expand and crack. He said the Phoscrete seals the rusting rebar and prevents further rusting, which would cause more cracking.
The repair process Empire is trying to sell to MDOT and county road commissions costs about twice as much as conventional repair with cement, he said, but he believes it is worth it because Phoscrete cures so much faster than cement — which means the highway or bridge is closed for hours, not days — and it "really is a solution to the problem of rusty rebar."
Peak said he believes there "are a lot of old bridges out there that we cannot afford to replace — the economic crisis we are in precludes us from doing that."
Empire Solutions, he claims, is "effectively helping the DOT save money by doing repairs rather than replacements."
Peak said the company that makes Phoscrete is "seeing an increased volume of sales and, unfortunately, not all of it is coming through us. Other DOT contractors caught on to our materials and our efforts," he said.
He said the transportation departments aren't completely sold on Phoscrete yet and are conducting tests, although Peak noted that it is "two and a half times stronger than conventional concrete."
Doing industrial work has made Empire workers familiar with rush schedules, Peak said. Typically, a factory with an old furnace in need of repair will shut it down on a Friday and Empire workers are given the weekend to reline the furnace. Everything has to be completed in time for starting it up again Monday morning.
"The infrastructure market is a whole new market that we find refreshing," said Peak. "These people in the DOT aren't under as much pressure as the guy that runs a manufacturing business."
He added that another good thing about a government contract is that "the last guys standing — the last guys with money — are the government."