From Des Moines Business Record -
A major manufacturer of agricultural and industrial chemicals is expanding its Des Moines footprint this year as its production operations continue to grow.Helena Industries Inc. blends and packages a host of herbicide, pesticide and biocide products that are shipped nationwide as well as globally for major ag and industrial chemical companies. The company is adding a 100,000-square-foot warehouse to its Vandalia Road plant, and the $5 million project is expected to be finished by September. Septagon Construction Co., a design-build general contracting and construction management company with a central Iowa office in Grimes, is the general contractor for the project.In the past 10 years, the Des Moines plant – one of four operated by Collierville, Tenn.-based Helena Industries – has tripled its production output, said Troy Hugen, the plant’s manager.“Ag continues to be very strong,” he said. “We’re riding that wave of global appetite for products that are produced in America. As a result, we’ve worked closely with (client) companies to maximize yields in whatever ways we can.”
The Des Moines plant, which has an annual economic impact of about $30 million in payroll and vendor contracts, currently employs about 85 full-time workers. That’s about a doubling of employees since Hugen started with the company 11 years ago. During its peak seasons in late winter and early spring, the plant hires anywhere from 30 to more than 100 contract workers as well. Helena Industries last expanded its Des Moines operations in 2008 with the construction of a plant to make glyphosate, a popular agricultural herbicide.
“As we’ve grown, we’ve continued to cannibalize our own space,” Hugen said. “What’s driving our most recent expansion is that we’ve just cannibalized about as much as we can, and we’re leasing around a quarter-million square feet elsewhere. So we’ll continue to lease some space in the Des Moines metro and the Golden Circle, but we also want this space to support all our processes that we do on-site.”
The expansion will enable the company to bring a few jobs back to the plant that had been at off-site warehouses and to add about five new jobs. There is also the possibility for an additional new venture that could mean another three to five permanent positions, he said.
Helena Industries’ Des Moines operations have changed significantly in the past several years as the agricultural chemical industry has shifted to a preference for liquid products rather than dry granular products. “At one time, we were a three-quarters dry/one-quarter liquid facility. In just about five years, that completely reversed,” Hugen said. “So we’re seeing liquid formulations continuing to drive our business success.”
Freight costs are part of the reason for the shift, he said.
“Usually you can concentrate your liquids a little more heavily, so therefore it takes some of the freight costs out of the equation,” he said. “If you’re shipping a granular product that’s 10 percent active ingredient, but you can do a liquid that’s 50 percent active ingredient and let the end user dilute it with water, the freight dollars are stronger on the liquids. And I think some of it is preference; I think the equipment market is more following the lead of the grower than dictating it, but I still think there’s an evolvement on both sides of that.”
The Des Moines plant has expanded its biocide production in the past five years. Biocides are chemicals used to prevent spoilage, mold or other contamination in products ranging from cosmetics to paints and shampoo. “The nice thing about that market is it does not have the seasonality that your ag and turf products have,” Hugen said. Another growth area for the plant has been micronutrients such as zinc, manganese and boron that have become important in crop products.
The plant now performs about 28 blending and formulation operations with about dozen different packaging areas.
Approximately one-third of Helena Industries’ output is produced for its parent company, Helena Chemical Co., which is its single largest customer. Helena Chemical operates more than 400 locations throughout the United States and is one of the top distributors of agricultural chemicals in the country.
A potential growth area for the plant is added storage and terminal facilities for customers, Hugen said.
“Customers want to be able to store their products right here on the doorstep, so that’s something that there’s a lot of dialogue about,” he said. “It’s about just-in-time service. If they can have products sitting somewhere in the heartland, that means it’s only a few hours from their customers. But the (return on investment) has to be there to make it work for both parties.”
Additionally, a trend toward highly concentrated liquid products known as liquid flowables could create more potential for expansion of the Des Moines plant. Liquid flowables might includes concentrations that are as high as 60 to 90 percent active ingredients.
“Our Georgia plant has seen a huge resurgence and growth in liquid flowables,” Hugen said. “So we believe that’s one of the next things that may happen at our location.”
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