By Mark Hansel
NKyTribune managing editor
A little more than a year ago, the Wilder-based steel producing plant, TMK IPSCO, went idle.
TMK IPSCO is one of the largest North American producers of welded and seamless pipe and premium connections dedicated to serving the oil and gas industry. As with many manufactures, however, the company is tied to the economic fortunes of its end users, and the oil and gas industry was struggling.
TMK IPSCO Chairman and CEO Piotr Galitzine talks about the resurgence of the oil and gas industry and the positive impact it has had on the company (photos by Mark Hansel).
Piotr Galitzine, TMK IPSCO Chairman and Chief Executive Officer, said the company’s North American operations were hit especially hard.
“During the worst of the downturn, we were forced to idle our welded-pipe plants and cut staff and hours across the rest of the company,” Galitzine said.
In Wilder, the company that had been an integral part of Northern Kentucky for two centuries, under several names, was down to just three employees late last year.
Joel Mastervich, TMK IPSCO vice president and COO, said 2015 and 2016 were very difficult years across the oil and gas industry. Company officials believed, however, that every crisis presents an opportunity and they were confident that the oil and gas industry would stabilize. They used the down time to prepare the facility for the time when production would resume.
“In order to secure the long-term future for all of us in the welded business, we’ve adopted a series of upgrades to reduce costs and improve our performance. We’ve implemented what we call Overall Equipment Effectiveness System (OEE),” Mastervich said. “This allows us to standardize our performance metrics and identify areas that need improvements.”
That confidence and preparation paid off in a big way, and earlier this year, TMK IPSCO began calling employees back as the oil and gas industry began its resurgence.
Employees and guests at the announcement that TMK IPSCO added a second shift and brought back 165 employees just a year after going idle. Front row left are (l tor) Campbell County Judge/Executive Steve Pendery, Wilder Councilwoman Valerie Jones and State Rep. Dennis Keene (D-Wilder). Click to enlarge
“A little bit more than a year ago, the rate count, which gauges how many wells are about to be drilled in the U.S., was hovering in the low 400s,” Galitzine said. “Now it’s 952, it’s adding about six or seven rigs a week which is an excellent sign and oil prices have stabilized. They may not yet be where we would like them to be, but they have recovered.”
Monday, TMK IPSCO announced that it has added a second shift in Wilder and is back up to 165 employees at the facility.
“It’s an absolute pleasure to be here and talking about adding jobs and increasing production in Wilder and Campbell County, especially after what has been the longest and deepest downturn in the history of the oil and gas sectors in the world,” Galitzine said. “It’s especially exciting that as of last week, we had over 1,650 active employees and the hiring process is continuing. Hitting that rehire button on my computer most days is the best part of my day.”
Mayor Stanley Turner called it a great day for the plant’s employees and the city. He read a proclamation celebrating the restart of the second shift and declaring it TMK IPSCO day in Wilder.
The TMK IPSCO facility has a longer history than that of Wilder itself. State Rep. Dennis Keene (D-Wilder) explained how the company that started as Andrews Steel in the early 1800s helped bring the city into existence.
“By 1935, Andrews Steel felt that the South plant needed to be within an incorporated area and moved enough citizens into the area to fill the residency requirement, thus the City of Wilder was born,” Keene said.
The plant was commandeered by the U.S. Government to make shell casings in the 1940s and during lean times the plant offered assistance, in the form of financial support, to help maintain and upgrade city services.
As time went on, Andrews Steel became Newport Steel, then Acme Newport Steel, Interlake Steel and now TMK IPSCO. Russian-based TMC IPSCO has its North American headquarters in Houston.
“For over 200 years, this plant has provided community with economic stability,” Keene said. “Today, as we celebrate the restart of TMK IPSCO Steel, let us never forget the sacrifices and struggles of those who have gone before. Their dedication to maintaining a lively manufacturing economy for this area is one that I believe cannot be matched anywhere in this country.”
Part of the TMK IPSCO facility in Wilder (provided photo) Click to enlarge.
Galitzine said the world has become a much more interconnected place over the years, to the point that what happens in Wilder, has ramifications for TMK’s Russian, European and Middle Eastern divisions, and vice-versa.
“TMK IPSCO is proud to be one of the top two companies…in the USA pipe sector,” Galitzine said. “We’re eager to continue to improve on that market share, our prowess and innovation, profitability and making our company a great and rewarding place to work and Wilder plays a key role in these plans. Ramp-up of production in the Wilder plant, represents a major step in TMK IPSCO’s growth strategy in North America.”
Campbell County Judge/Executive Steve Pendery, who also currently serves as Chair of Northern Kentucky Tri-ED, said it’s interesting to see how things that happening globally can impact this region’s economy.
“The comeback that they are making has to do with international economic conditions and international oil and gas markets,” Pendery said. “It’s really the same reason we need an economic development agency here; so that when there is a downturn you find opportunities and stay in the game and watch after the people in the community. That’s what Tri-ED is always doing, looking at ways to keep companies like IPSCO here and that’s been successful.”
Galitzine said customers expect TMK IPSCO to provide them with a full spectrum of parts, which includes everything they need to drill a typical horizontal well and even a non-typical one.
“I was telling some of our distinguished guests that we have clients now in the USA that are drilling 10,000 feet down vertically and 22,000 feet over horizontally, that’s six miles,” he said.
Employees are returning to a union shop in Wilder at wages that Galitzine said are consistent with the industry standard and the company has welcomed a large number of those back that were laid off.
“When we started calling people back, not only here in Wilder, but in our 11 plant structure in the United States, we were averaging 80 percent of the people saying they will come back,” Galitzine said. “Our people see themselves as craftsman, as do we, and we pay them as craftsmen.”
Contact Mark Hansel at mark.hansel@nkytrib.com
