Pipe Market Report: The big leagues

Go big or go home. There seems to be no place in Canada’s pipe market for small fry. In a league by themselves among pipe producers are Canada’s corporate elite, the half-dozen multi-plant, multi-national producers that serve global engineering and infrastructure projects as well as the residential market — KWH, Royal, Big “O”/Armtec, IPEX, Imperial PlasTech.

At the other end of the scale are those producing pipe and tubing for niche markets, and those producing pipe as a sideline to a custom profile business.

In between, there are few “wanna-be’s”. Consolidation has come and gone, and left a few giants to venture forth into global markets. And in the big leagues, they have fared well.

KWH Pipe, which has facilities in Canada, the U.S., Europe and Asia, is expanding its plant in Huntsville, ON. The project is expected to cost $8.1 million, and will raise capacity to 50 million lb./yr. from 30 million lb./yr. The plant produces various sizes of polyethylene pipe for use in the natural gas, mining, municipal water and storm sewer markets.

In one recent application, KWH pipe was used at the National Energy Laboratory of Hawaii Authority (NELHA) to draw seawater from a depth of 3000 feet. HDPE pipe was chosen for the 9000 ft. long cold water pipeline because “the flexibility and strength have proven to be ideal,” explains Tom Daniel, one of the project scientists with NELHA. In addition, the buoyancy and flexibility of HDPE allow cost-effective deployment.

For this project, the pipe was fused on shore into nine sections, each approximately 1000 ft. long, then assembled into one long segment. “The pipe was filled with air, which supports it and its anchors during towing to the site where it is flooded for sinking,” says Daniel.

STRENGTH IN DIVERSITY

Pipe and cable manufacturer Imperial PlasTech has made a number of moves to diversify its markets. Its Imperial Building Products unit launched wood/plastic composite decking and railing products in 2001. The company is also trying to expand its sales in residential plumbing products, especially in the U.S. pressure pipe market.

“While the significant slowdown in the telecommunications sector continues to impact our consolidated results, we are making good progress in diversifying our sales base,” said president and CEO Victor D’Souza in a statement accompanying the company’s second quarter results. “Our efforts have resulted in the telecom sector accounting for 5% of 2002 shipments from the Canadian plants compared with 25% last year. Over the next year we hope to similarly reduce our US operations’ exposure.”

Sales for the quarter ended May 31, 2002 were $12.6 million compared with $16.9 million in 2001. The decline is attributed to reduced shipments of telecommunications and oil and gas products.

THE WARM GLOW OF A MEGA-PROJECT

Hydronic (water-based) heating systems are another market actively pursued by Canada’s extrusion elite. Imperial PlasTech announced earlier this year that its wholly-owned subsidiary in Georgia had secured a contract as the primary supplier to one of North America’s leading manufacturers of geothermal systems for residential, commercial and institutional heating applications.

Geothermal systems are used to heat and cool buildings by exchanging energy with the earth by way of buried loops of pipe.

Another hydronic technology is radiant floor heating, which uses loops of cross-linked polyethylene (PEX) pipe under or in the flooring material to transmit warm or cold water for heating or cooling.

Plasco Manufacturing Ltd. and Wirsbo are other significant Canadian players in the radiant heating segment. Both companies are owned by Uponor, headquartered in Regina, SK. In recent years, Uponor has been consolidating the management and sales functions of these two subsidiaries, a delicate task since each offers branded products to the same market.

The beauty of a radiant floor heating project, from the extruder’s point of view, is that it requires an immense amount of pipe to heat a building. Radiant floor heating was the choice for a breathtaking expansion at the Milwaukee Art Museum. The museum’s Quadracci Pavilion has a soaring cathedral-like glass ceiling and marble flooring. Radiant floor heating keeps the heat where it is needed — at the visitor level — and eliminates the wasted energy of heat pushed against the cold windows.

Rehau supplied approximately 25,000 ft. of RAUPEX O2 Barrier PEX piping, 1/2 in. size, for the project.

A Wirsbo radiant floor heating system installed in a state-of-the-art equine hospital in Calgary, Alta, required 8000 ft. of 3/4 in. PEX tubing. The heat source in this case is a 400,000 BTU boiler fuelled by natural gas.

The system was installed by Tom Hermann, a mechanical engineer who grew up in Hungary, where hydronic heating has a dominant share of the market. “In Europe, 90% of the heating is hydronic, and a very large portion of that is radiant floor heating,” he states. “The use of in-floor radiant heating in North America is growing rapidly as people become more aware of the flexibility and comfort it offers.”

IPEX offers radiant floor heating under the WarmRite brand, using the company’s unique Kitec pipe. Kitec has an aluminum core sheathed inside and out with plastic.

NEEDED: SIX BILLION METRES OF PLASTIC PIPE

The global outlook for plastic pipe is steady but not stellar. A Freedonia Group industry study entitled “World Plastic Pipe” forecasts that global demand for plastic pipe will increase 4.2% per year through to 2005. At that time, the six billion metres of plastic pipe sold globally will account for approximately 47% of total pipe demand.

Freedonia identifies seven leading companies in the global industry, two of which are present in Canada: Uponor and the Etex Group (which owns Ipex).

PEX IN ONE EASY STEP

There are three commonly used processes for PEX: peroxide cross-linking (PEX-a or Engel Method), silane cross-linking (PEX-b) and radiation cross-linking (PEX-c).

In silane cross-linking, several equipment manufacturers have now refined the process and converted what was a two-step (compounding then extrusion) process into a one-step operation.

Battenfeld Extrusion demonstrated its “Spherisil process” to pipe producers earlier this year. It is a one-step process, whereby the resin is fed to a blender with a masterbatch and liquid silane. A porous absorber is also added. The rotating blender located above the extruder’s feed throat produces a preliminary blend with complete absorption of the liquid silane. This way, barrels and screws are not in contact with the liquid silane. The formation of surplus silane deposits is avoided, the silane quantity can reduced to 1.5%, and silane deposits in the extruder are also prevented.

Melting, further homogenization, pressure build-up and the grafting reaction all take place in the extruder.

At a demonstration this spring, Battenfeld produced hot water pipes with a diameter of 16 mm and a wall thickness of 2 mm at a rate of 30 m/min on a grooved barrel extruder using the Spherisil process. A cross-linking degree of over 70% was maintained up to maximum performance of 200 kg/h.

Another one-step process is available from Davis-Standard. The extruder manufacturer has teamed up with OSi, a sister company under the Crompton Corp. banner. Davis-Standard can customize its Mark V extruder and configure an entire line to use OSi’s XL-PEarl dry silane product. XL-PEarl can be added at the extruder throat, eliminating the need to graft the silane to the PE prior to extrusion.