Company adapts to ride wave of success - Its buoyancy devices play a key role in the oil industry's offshore extraction projects.
Portland Press Herald (ME) - May 18, 2007
Author: TUX TURKEL Staff Writer
It's surprising, at first, to learn that a block of foam costs several thousand dollars.
But then you find out that the foam has to survive for many years, thousands of feet under the ocean's surface, with the equivalent of a car's weight pressing on each square inch.
That's the mission of buoyancy modules, which support the miles of flexible piping needed to extract oil from the ocean floor. These modules are among the products manufactured at Flotation Technologies Inc., and they are behind an expansion that put the 28-year old company in a larger home last month and doubled gross sales over the past year to $6.3 million.
Revenue this year could hit $10.5 million, according to company projections. Looking ahead, the company is shooting for $30 million in sales within three years, a target that would require more employees and three shifts.
The company has 42 employees now but expects to add at least 10 by year's end.
This pace of growth requires better ways to manage change and streamline processes. Flotation Technologies has been working on that side of the business lately and today will be presented with an excellence award from the Maine Manufacturing Extension Partnership.
Flotation Technologies is a reminder that manufacturing isn't dying in Maine, but evolving. In this case, it's about taking advantage of an expanding market - offshore oil extraction - and filling a niche with a specialized product. It's a small piece of a complex industry, and it's not glamorous, but without flotation systems, deepwater drilling can't exist.
The success of Flotation Technologies is built on a foundation of syntactic foam. This foam is made by mixing hollow glass microbubbles with epoxy to produce a cellular product as dense as a piece of oak. Light and strong, it doesn't compress. Unlike wood, it won't become waterlogged.
Those are important properties, for devices meant to survive under polar ice, buffeted by ocean storms and subjected to crushing pressure.
Syntactic foam also comes in handy, it turns out, to help deliver drama to the big screen. Flotation Technologies was chosen to provide the underwater buoyancy to help shoot the Oscar-winning movie ''Titanic.''
Flotation Technologies is a family business. Tim Cook, the current president, recalls his father's role in helping to develop syntactic foam in the 1960s, in Connecticut.
The company was formed in Maine to build buoys for oceanographic research and existed for years as a smaller enterprise. It got a boost 10 years ago by making floats for earthquake research, and employment jumped from eight to 20 people.
But the real change came in 2002, when rising oil prices kick-started sea exploration. Cook saw potential. The market for oil exploration was many times larger than oceanographic research.
''We had really outgrown our niche in the oceanographic market,'' he said.
Turning to oil, Flotation Technologies faced a big competitor: European-based Trelleborg CRP dominates more than 80 percent of the syntactic marine market in an industry occupied by only a handful of players.
But booming oil exploration offsets that, Cook said.
''We're still a small player, but we've got a lot of room to grow,'' he said.
The boom is bringing oil company representatives to Biddeford to see what Flotation Technologies has to offer. Recently, the company won a $4.1 million contract to build buoyancy modules for Houston-based Frontier Drilling.
The flotation the Biddeford plant will make for Frontier and other oil companies helps support the weight of drill risers that can reach a mile to the seabed. Without buoyancy, they would break under their own weight.
Foam has to be incredibly strong to do that job, and its integrity is challenged as depths increase. For some underwater research, for instance, scientists drop equipment four miles deep. The pressure there is roughly 10,000 pounds per square inch, the weight of a truck.
The casual observer might not appreciate the strength of syntactic foam, watching it being manufactured earlier this week on the production floor.
In one room, a finishing worker was grinding the surface of what looked like a 7-foot-long vitamin. Nearly 5 feet in diameter, it's actually a buoy that will support reading meters for climate research.
In a nearby paint shop, a 4-by-4-by-6-foot block of foam was getting a bright yellow coat for mooring an oil rig in the Gulf of Mexico. The block can float 2,000 pounds. It costs $25,000 and Flotation Technologies is making a dozen of them.
A month from now, Cook needs to get the production floor ready to handle record demand. The company just moved to its new home in the Biddeford Industrial Park and the factory is a work in progress. Employees and outside contractors are scrambling to set up the production line in a 45,000-square-foot former warehouse, while maintaining output at the same time.
To help handle the expected crush, Cook began working last year with the state's manufacturing extension partnership, which is affiliated with the U.S. Department of Commerce. A big step was embracing lean manufacturing principles, performance-improvement methods meant to enhance quality and cut waste. One result: Flotation Technologies is now putting out twice the number of quotes for prospective clients in the same amount of time.
''Lean just helps them have a higher percentage of wins, which translates into higher revenues,'' said Bob Doiron, a project manager at Maine MEP.
As part of the process, workers took an eight-hour course. The goal now is to sustain the lessons and look for new ways to improve processes.
''It becomes a journey - that's the big challenge,'' Doiron said.
Another challenge for Flotation Technologies is to diversify. Cook knows the oil-exploration and drilling boom won't last forever.
At the plant last week, a front- end loader was lifting half of a bright yellow, 700-pound buoy out of a box. A deepwater flotation device, it was designed for the military.
Staff Writer Tux Turkel can be contacted at 791-6462 or:
tturkel@pressherald.com
Caption: Photos by Gordon Chibroski/Staff Photographer At Flotation Technologies in Biddeford, product finishers grind and prepare syntactic foam buoys that were headed to Bedford Institute in Canada for use in climate research. The Maine company has doubled gross sales over the past year and expects to add employees. Tim Cook, president of Flotation Technologies , saw an opportunity for the business in 2002, when oil exploration expanded to seabeds, facilitating the need for buoyancy modules his company could make. A Flotation Technologies employee uses a front-end loader to lift a buoy that will support a climate-research meter.
Memo: FLOTATION TECHNOLOGIES , Biddeford Industrial Park
CONTACT: 282-7749 or www.flotech.com
FOUNDED: 1979
EMPLOYEES: 42
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