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Plant Expansion a Boon for City

Posted on April 7, 2014

Originally published in the El Dorado News-Times on April 8, 2014.

By: David Showers

Where are the green jobs? Right here in El Dorado, and business is brisk.

The sludge dryers assembled inside Therma-Flite?s 45,000 square foot facility are in demand by municipalities, but the market is expanding overseas, said Pete Kussman, production manager. The 140,000-pound IC10000 on display at the west end of the facility is going to New York, and Magnolia recently purchased a 3600-model.

The burgeoning market has outstripped capacity, necessitating a 28,000 square foot expansion. A second expansion proposes to double the size of the existing facility in the next two years.

"We?re out of room,? plant manager Donald Lee explained last week to a group of community and business leaders touring the facility. "We can?t keep up with the demand and get enough out the door.?

Four months and 8,000 man hours are needed to assemble the dryers, or screw heat exchangers. The 10000-model sells for more than $2 million.

"It?s not a cheap investment, but neither is disposing of sludge,? Kussman told the tour group.

The dryers convert wastewater sludge into Class A waste that can be mixed with soil and turned into fertilizer. Rather than paying to dispose of sludge in a landfill, cities can sell it as a useful product and defray the cost of their screw heat exchangers.

"Our dried sludge is inert,? said Curtis Dillon, of Therma-Flite?s engineering department. "So long as it?s kept dry, it?s safe and free of bacteria ? It?s not caustic or hazardous. All the biohazards have been removed. It?s basically been sterilized.?

Ramped up demand prompted Therma-Flite to seek an early buyout of its lease agreement with the city, which used more than $2 million of revenue from its economic development sales tax to build the facility. The city acceded, selling the building and the 16 acres it sits on for $750,000.

The expansion will allow for a more vertically integrated production that promises to add jobs to the almost 50 currently on the payroll, putting Therma-Flite on schedule to easily exceed its goal of creating 50 jobs by 2017. The two-phase expansion would increase production by 400 percent, Kussman said, allowing for 16 dryers to be simultaneously assembled.

Many of the components currently sourced from outside could be built in-house. The more seamless, nimble supply chain afforded by insourcing would lead to greater quality control and easier compliance with EPA regulations, Kussman said.

"We can get a small parts department where we can make things,? Kussman said, explaining that the private equity firm XPV capital recently purchased a $7.5 million stake in the company. "? We want more control over what we do for safety reasons, the EPA and everything else ? We had a five-year lease. We wanted to get ownership so we could expand. This is where we want to do it.?

Sludge drying is a relatively new application for screw heat exchangers, Dillon said. They were primarily used by the chemical, process and mining industries before being repurposed for sludge disposal. Therma-Flite built its first municipal sludge dryer for Yakima, Wash., about five years ago, he said.

"A tech guy hired to run a demo unit said this would be great for a sludge dryer,? said Dillon, explaining that the technology has its origins in the Archimedian screw, used in antiquity to convey water into irrigation ditches.?They kind of latched on to that and aimed it toward that market.?

An emerging application has been identified in the oil and gas industry, Lee said. Therma-Flite plans on building dryers that will reclaim hazardous material from drilling mud, which could then be safely used as road bed material for highway construction.

"It would be nice if we could keep making sure the waste we generate is not a hazard to anybody when you get done with it,? Kussman said. "Because just think what?s going on now. You?ve got landfills that you can never reclaim.?"