Paul Mueller Co. rolls out tanker line

Springfield-based Paul Mueller Co. (OTC: MUEL) is adding several jobs and looking to add millions in sales with its new line of tanker trailers targeting a rise in the oil industry.

Mueller Co. has begun production of an aluminum line of over-the-road trailers and hired roughly 25 employees, many with experience from local competitors as it enters a new market.

Gregg Shirey, director of industrial equipment and business development for Mueller, said the new line was prompted by a loss of custom project work during the recession and a demand for domestic oil transportation.

The company currently has 15 tanks and trailers at various stages of production, he said. It constructs the tanks and attaches them to the trailer beds at its roughly 1 million-square-foot manufacturing facility, 1600 W. Phelps St., utilizing one of eight production bays.

“We are trying to diversify after the recession. We are looking at new markets and new products,” Shirey said. “We’ve built tanks since 1940. They’ve been stationary. Now, we just have tanks on wheels.”

He said the process to figure out how to develop the new line began in mid-2010, just as the company’s revenues were being squeezed. The custom stainless steel producer for the food, beverage, dairy and pharmaceutical industries, felt the full impact of the recession when it recorded a 2010 net operating loss of $8 million. Revenues fell 23 percent that year to $129.6 million.

Since then, the company has been fighting back, adding new clients such as Kansas City craft brewery Boulevard Brewing Co. and Denver-based cheese and dairy manufacturer Leprino Foods. Still, Shirey said there has been a lot of underutilized space at the Springfield plant, which necessitated a look at emerging markets such as domestic oil production and advancements in fracking technology, or the process of using high-pressure water to create fractures in rocks extracting oil and gas.

Chasing trends
According to the U.S. Energy Information Administration, national crude oil production is expected to grow 12 percent this year to 6.3 million barrels per day. The EIA projects U.S. domestic crude oil production to increase to 6.8 million barrels per day in 2013, the highest level in 20 years.

Springfield’s Polar Tank Trailer plant in Partnership Industrial Center strictly produces tank trailers for the oil industry. Polar Tank General Manager Brent Thompson said production has nearly tripled since 2009. The company completed a $1.4 million, 27,000-square-foot addition in September, and Thompson estimates the plant will produce 900 trailers for the oil industry by the end of the year, up from 311 in 2009.

He welcomes the new competition.

“If it weren’t for competition, we’d still be cooking our meat over an open fire wearing buffalo fur,” Thompson said. “We have our own product line to focus on, and we’re doing well.”

While Mueller Co.’s customer base is in its infancy, Thompson acknowledged the move seems like a natural next step.

“If anybody can make it in the industry, I’m sure Paul Mueller can,” he said.

At Acro Trailer Co., a Springfield-based custom tank trailer manufacturer founded in 1960, employees have steadily produced about 150 trailers per year the last two years. General Manager Chris Foshe said order backlogs that have averaged between eight months and 12 months in that time are now dwindling, based on conversations he’s had with industry associates.

“The market is really slowing down,” he said, noting a saturation point might be on the horizon.

Foshe said he is aware of a few startups across the country and knows that companies such as New Lisbon, Wis.-based veteran Walker Group Holdings have been ramping up production to meet previous demand. As a specialized producer, Foshe said Mueller Co. wouldn’t be a direct competitor, though Acro manufactures about 60 crude oil tank trailers per year.

Investing in the future
Currently, Mueller Co. is manufacturing 8,400-gallon crude oil tankers, and the company has plans to produce roughly 9,000-gallon refined petroleum tankers, Shirey said.

Shirey said the company will sell the trailers – which cost around $70,000 a piece post-production – to distributors around the country who can resell to leasing companies or truck drivers, the end users.

So far, Mueller Co. has invested about $1 million in equipment, supplies and manpower, Shirey said, adding the hope is the new line would result in several million dollars of revenue in 2013 and beyond.

Mueller Co. Sales Manager Gary Martin, a 32-year Mueller veteran who heads up the over-the-road sales, said the company is working to launch the line by advertising in a national trade magazine and has displayed one of its new tank containers in the northeast corner of its parking lot.

He said the company has sold three tank trailers to date, and it has ordered aluminum to manufacture 10 more. Mueller Co.’s goal is to produce one per day by the first of the year, Martin said.

The production is made possible with a staff that largely has experience with local companies, though Shirey said the company would tap into the pool of candidates at Ozarks Technical Community College’s welding program.

Polar Tank’s Thompson said nearly 20 of the plant’s 420 employees moved to Mueller in recent months.

Next year, Shirey said Mueller Co. would likely begin producing stainless steel tanker trailers for dairy or food-service customers, such as Kraft, and ultimately could create roughly 100 tanker production jobs. The efforts are part of the company’s plans to add 300 jobs during a three-year period, which was announced in October 2011.

“We’ll have to see where this is going,” Shirey said.