July 23, 2007
The mod squad | Cianbro picks the former Eastern Fine mill in Brewer for its new construction venture
By Kerry Elson
Pete Vigue seemed like everybody's hero on June 2. That day, the Cianbro Corp. CEO said his firm would open a module construction facility at the former Eastern Fine Paper mill in Brewer, employing at least 500 people and reviving manufacturing at the site, which closed in 2003 after buckling under heavy foreign competition.
The announcement elicited cries of joy from local business owners, who envisioned new customers with spending money in their pockets. Brewer's economic development director, D'Arcy Main-Boyington, was so excited at the press conference she gave Vigue a hug.
The Brewer Module Facility, as it's called for now, is good for Brewer, Vigue says, but it's also good for Cianbro. The Pittsfield-based company is already one of Maine's biggest, employing nearly 2,000 people at offices in Pittsfield, Portland, Bloomfield, Conn., and Baltimore, Md. In 2006, the company earned over $260 million in revenue, working on such projects as the Penobscot Narrows Bridge and Bangor's Hollywood Slots racino. The Brewer site, however, will allow the company to expand its business by taking on more projects beyond the scope of its four offices.
Vigue would like to do more of that kind of work. In the past, the company had sent crews of 100 or so workers from Maine to do work elsewhere, but stopped doing so in recent years because travel was too expensive and unappealing for employees, says Vigue. The company has brought some work up to Maine, currently retrofitting two, 370-foot-long tankers at its Portland site, for example. But Cianbro has missed out on dozens of bigger module projects ˆ in which it would construct smaller components of industrial plants ˆ each year because its sites weren't large enough for them, says Scott Morrison, the company's vice president. "We are flat turning down work," he says.
At the Brewer site, Cianbro will be able to take on those projects. Workers will construct building parts, or modules, here in Maine and then ship them by barge to their final destination. For example, a company that wants to build a factory in Mississippi could break the building down into smaller, 1,000-ton components and hire Cianbro to build some of the parts off-site, installing electrical systems and piping in advance. Then the recipients will put the parts together, as though they were working with an erector set. Specific projects could include 1,000-ton components of plants that make pharmaceuticals or generate electricity. These heavy modules can only be transported on the water, so recipients have to be on the coast or have river access. Morrison expects Cianbro's module clients to be located in Canada, Europe and the Gulf Coast, which is seeing a boom in construction in the wake of Hurricane Katrina, he says.
Preparing the site for modular construction will be expensive for Cianbro, at $10 million-$15 million, Morrison says. But he adds it will be a good investment. While he's not sure how much the Brewer site will earn each year, he says the first project alone ˆ an 18-month project that's expected to start in April 2008 ˆ will be worth hundreds of millions for Cianbro. Morrison wouldn't name the client, but said it also has hired two non-Maine companies to complete module construction. Cianbro's portion includes making 60 modules.
For Vigue, the Brewer site will help grow the business not just by adding to Cianbro's workload, but also by acting as a training site for future employees, where veteran Cianbro workers can mentor new hires. A trained workforce will help Cianbro compete with contractors in other parts of the United States, many of whom are scrambling to fill positions. "All we are trying to do is take advantage of what our [strength] is, which is people," he says.
Pitching in
Cianbro is entering the modular construction market at an opportune time. Residential modular homes are increasingly popular, with modular housing production rising 48% from 1992 to 2002, according to the National Association of Home Builders in Washington, D.C. Revenue from commercial modular construction, which includes schools, offices and industrial buildings, rose 15% last year to $5 billion, says Tom Hardiman, executive director of the Modular Building Institute in Charlottesville, Va.
Modular construction for industrial buildings is a tiny part of the commercial module market, Hardiman says. "You're looking at a niche within a niche," he says.
Kathleen Newman, president of the Maine chapter of Associated Builders and Contractors, confirms that estimate, noting that Cianbro is the only company in Maine to make modules for industrial buildings, and one of a few on the East Coast. "It's really a pretty unique type of construction," she says.
Demand for modular construction is rising in part because the method can save clients time, says Morrison at Cianbro. Construction can take place at several sites at once rather than in sequence at the site, over a period of years. Some regions, such as in the Gulf Coast, might not have enough skilled workers locally to complete projects, so they're forced to export parts of the job to areas where workers are available.
Vigue began considering a modular construction site after Hurricane Katrina hit the Gulf Coast in 2005. At the time, the company sent 100 workers to the region to help build oil tankers for ConocoPhillips, an oil company in Texas. Afterward, Cianbro received more requests to perform work in the region, but wasn't able to accept every job. "It's a strain on families," Morrison says of relocating. In addition, he says, some clients thought accommodating crews from away would be too expensive.
The need for construction in the Gulf Coast region remains strong. And right now, there aren't enough people to do the work on-site. A group called the Business Roundtable, an association of business executives in Washington, D.C., in 2005 launched the Gulf Coast Workforce Development Initiative, a $25 million, federally-funded training program that aims to put 20,000 new construction workers on local job sites by 2009. So far, the company has trained about 5,500 workers, according to program organizer Tim Horst. That leaves an opportunity for companies like Cianbro to offer skilled workers for jobs on the Gulf Coast.
"I believe it's going to have to happen," Horst says of modular construction for manufacturing plants in the region. "There's simply not enough workers down here."
Brewer or bust
Vigue considered a few sites in Maine and on the East Coast for Cianbro's modular construction facility, including its Baltimore location and Searsport. He decided the Brewer mill site would work best for two reasons. First, it's within driving distance for workers in the northern part of the state, who he says have valuable skills for the site but have been underemployed since mills in the region closed in recent years. Second, the site is on the deep-water Penobscot River, a feature that's necessary for Cianbro to transport the finished modules via barge to their final locations.
At first, the Brewer site was off-limits. Developer Tom Neimann, whose North Carolina development firm, Niemann Capital, also is planning to redevelop former industrial sites in Augusta and Waterville, submitted a letter of intent to the city in 2006, with plans to transform the Brewer mill into shops and condominiums. But once Cianbro expressed interest, including the possibility of creating 500 new jobs ˆ double the number of people laid off by Eastern Fine Paper when it shuttered the plant in 2003 ˆ Neimann gave up development rights in favor of Vigue's plan.
"He said, 'I'm not going to stand in the way of creating 500 jobs,'" says D'Arcy Main-Boyington, who helped the parties negotiate as Brewer's economic development director.
The site will remain Brewer's property for now, but Cianbro intends to buy the property "in the shortest time frame available to us," Vigue says. Now he's working to prepare the site, cleaning up residue from mill chemicals, and plans to begin work on the first project in April 2008. Morrison expects the site will do work year-round, having to meet annual revenue quotas as its other sites do.
The company also is recruiting workers to the site. With 500 jobs to fill, providing training for new workers is necessary, Vigue says, since there's a shortage in the state. There are as many as 2,000 construction job openings in Maine each year, according to Newman at Associated Builders and Contractors. Vigue plans to recruit students from United Technologies Center, a trade high school in Bangor, as well as Maine Maritime Academy, the University of Maine and the state's community colleges. The company's training budget, currently $2 million-$3 million per year, likely will increase as a result, though it's unclear by how much. "We're working out those details now," says Alan Burton, vice president of human resources at Cianbro.
Vigue isn't concerned about filling the vacant positions. And with Cianbro's past experience making modules on a smaller scale, he's sure the transition to larger jobs will be smooth. "We've done other modules, we've done other ship projects," he says. "We know that people here can produce."
The announcement elicited cries of joy from local business owners, who envisioned new customers with spending money in their pockets. Brewer's economic development director, D'Arcy Main-Boyington, was so excited at the press conference she gave Vigue a hug.
The Brewer Module Facility, as it's called for now, is good for Brewer, Vigue says, but it's also good for Cianbro. The Pittsfield-based company is already one of Maine's biggest, employing nearly 2,000 people at offices in Pittsfield, Portland, Bloomfield, Conn., and Baltimore, Md. In 2006, the company earned over $260 million in revenue, working on such projects as the Penobscot Narrows Bridge and Bangor's Hollywood Slots racino. The Brewer site, however, will allow the company to expand its business by taking on more projects beyond the scope of its four offices.
Vigue would like to do more of that kind of work. In the past, the company had sent crews of 100 or so workers from Maine to do work elsewhere, but stopped doing so in recent years because travel was too expensive and unappealing for employees, says Vigue. The company has brought some work up to Maine, currently retrofitting two, 370-foot-long tankers at its Portland site, for example. But Cianbro has missed out on dozens of bigger module projects ˆ in which it would construct smaller components of industrial plants ˆ each year because its sites weren't large enough for them, says Scott Morrison, the company's vice president. "We are flat turning down work," he says.
At the Brewer site, Cianbro will be able to take on those projects. Workers will construct building parts, or modules, here in Maine and then ship them by barge to their final destination. For example, a company that wants to build a factory in Mississippi could break the building down into smaller, 1,000-ton components and hire Cianbro to build some of the parts off-site, installing electrical systems and piping in advance. Then the recipients will put the parts together, as though they were working with an erector set. Specific projects could include 1,000-ton components of plants that make pharmaceuticals or generate electricity. These heavy modules can only be transported on the water, so recipients have to be on the coast or have river access. Morrison expects Cianbro's module clients to be located in Canada, Europe and the Gulf Coast, which is seeing a boom in construction in the wake of Hurricane Katrina, he says.
Preparing the site for modular construction will be expensive for Cianbro, at $10 million-$15 million, Morrison says. But he adds it will be a good investment. While he's not sure how much the Brewer site will earn each year, he says the first project alone ˆ an 18-month project that's expected to start in April 2008 ˆ will be worth hundreds of millions for Cianbro. Morrison wouldn't name the client, but said it also has hired two non-Maine companies to complete module construction. Cianbro's portion includes making 60 modules.
For Vigue, the Brewer site will help grow the business not just by adding to Cianbro's workload, but also by acting as a training site for future employees, where veteran Cianbro workers can mentor new hires. A trained workforce will help Cianbro compete with contractors in other parts of the United States, many of whom are scrambling to fill positions. "All we are trying to do is take advantage of what our [strength] is, which is people," he says.
Pitching in
Cianbro is entering the modular construction market at an opportune time. Residential modular homes are increasingly popular, with modular housing production rising 48% from 1992 to 2002, according to the National Association of Home Builders in Washington, D.C. Revenue from commercial modular construction, which includes schools, offices and industrial buildings, rose 15% last year to $5 billion, says Tom Hardiman, executive director of the Modular Building Institute in Charlottesville, Va.
Modular construction for industrial buildings is a tiny part of the commercial module market, Hardiman says. "You're looking at a niche within a niche," he says.
Kathleen Newman, president of the Maine chapter of Associated Builders and Contractors, confirms that estimate, noting that Cianbro is the only company in Maine to make modules for industrial buildings, and one of a few on the East Coast. "It's really a pretty unique type of construction," she says.
Demand for modular construction is rising in part because the method can save clients time, says Morrison at Cianbro. Construction can take place at several sites at once rather than in sequence at the site, over a period of years. Some regions, such as in the Gulf Coast, might not have enough skilled workers locally to complete projects, so they're forced to export parts of the job to areas where workers are available.
Vigue began considering a modular construction site after Hurricane Katrina hit the Gulf Coast in 2005. At the time, the company sent 100 workers to the region to help build oil tankers for ConocoPhillips, an oil company in Texas. Afterward, Cianbro received more requests to perform work in the region, but wasn't able to accept every job. "It's a strain on families," Morrison says of relocating. In addition, he says, some clients thought accommodating crews from away would be too expensive.
The need for construction in the Gulf Coast region remains strong. And right now, there aren't enough people to do the work on-site. A group called the Business Roundtable, an association of business executives in Washington, D.C., in 2005 launched the Gulf Coast Workforce Development Initiative, a $25 million, federally-funded training program that aims to put 20,000 new construction workers on local job sites by 2009. So far, the company has trained about 5,500 workers, according to program organizer Tim Horst. That leaves an opportunity for companies like Cianbro to offer skilled workers for jobs on the Gulf Coast.
"I believe it's going to have to happen," Horst says of modular construction for manufacturing plants in the region. "There's simply not enough workers down here."
Brewer or bust
Vigue considered a few sites in Maine and on the East Coast for Cianbro's modular construction facility, including its Baltimore location and Searsport. He decided the Brewer mill site would work best for two reasons. First, it's within driving distance for workers in the northern part of the state, who he says have valuable skills for the site but have been underemployed since mills in the region closed in recent years. Second, the site is on the deep-water Penobscot River, a feature that's necessary for Cianbro to transport the finished modules via barge to their final locations.
At first, the Brewer site was off-limits. Developer Tom Neimann, whose North Carolina development firm, Niemann Capital, also is planning to redevelop former industrial sites in Augusta and Waterville, submitted a letter of intent to the city in 2006, with plans to transform the Brewer mill into shops and condominiums. But once Cianbro expressed interest, including the possibility of creating 500 new jobs ˆ double the number of people laid off by Eastern Fine Paper when it shuttered the plant in 2003 ˆ Neimann gave up development rights in favor of Vigue's plan.
"He said, 'I'm not going to stand in the way of creating 500 jobs,'" says D'Arcy Main-Boyington, who helped the parties negotiate as Brewer's economic development director.
The site will remain Brewer's property for now, but Cianbro intends to buy the property "in the shortest time frame available to us," Vigue says. Now he's working to prepare the site, cleaning up residue from mill chemicals, and plans to begin work on the first project in April 2008. Morrison expects the site will do work year-round, having to meet annual revenue quotas as its other sites do.
The company also is recruiting workers to the site. With 500 jobs to fill, providing training for new workers is necessary, Vigue says, since there's a shortage in the state. There are as many as 2,000 construction job openings in Maine each year, according to Newman at Associated Builders and Contractors. Vigue plans to recruit students from United Technologies Center, a trade high school in Bangor, as well as Maine Maritime Academy, the University of Maine and the state's community colleges. The company's training budget, currently $2 million-$3 million per year, likely will increase as a result, though it's unclear by how much. "We're working out those details now," says Alan Burton, vice president of human resources at Cianbro.
Vigue isn't concerned about filling the vacant positions. And with Cianbro's past experience making modules on a smaller scale, he's sure the transition to larger jobs will be smooth. "We've done other modules, we've done other ship projects," he says. "We know that people here can produce."
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