The chemical industry in Western Pennsylvania is back from a near-death experience with exciting times brought by the shale gas boom, businessmen said on Tuesday.
Major companies are benefiting from a cheap supply of raw materials, while small companies have been able to provide chemicals to the drilling industry and are hoping to work with the expanding major companies.
“It’s actually a new chemical industry that’s being created — in addition to what we already had,” said Donald Hart, a chemical distribution company salesman who organized speakers at Tuesday’s Pittsburgh Chemical Day, Downtown. “It’s huge.”
About 400 attended the 45th annual conference, celebrating the influx of natural gas, including ethane and propane, creating new business around the region and for companies based here.
The rising tide for local companies mirrors the stunning rebirth of the industry that’s happened across North America in the past five years, national experts said. Previously, the cost of raw materials and labor was closing down many companies that couldn’t compete.
Pittsburgh’s rebirth started a little more than five years ago with boutique companies supported by talent from Carnegie Mellon University and the University of Pittsburgh, Hart said. The growth of the domestic energy industry — for which Western Pennsylvania is a hotspot — soon followed, changing everything.
The next big hope is an ethane processing plant that the chemical arm of oil giant Shell may open in Beaver County. Those types of plants can support another 50 plants that work with the raw plastics it creates, Jim Crews, vice president of northeast business development for MarkWest Energy Partners LP said.
That plant is likely to benefit any company that makes milk bottles, PVC pipe or vinyl — like Veka Inc. in Beaver County or across the border at Century Container Corp. in Ohio, Hart said. More new companies are likely to follow, he added.
Even without the cracker, there’s new business all around, leading to record years for some companies, businessmen said. Kroff Inc. started as a fundamental water treatment company, doing work for traditional industrial companies, said Kevin Flaherty, an account manager at the Kroff’s Well Services unit.
The company has broken into several divisions, specializing in treating water from drill sites, which is about 70 percent of Flaherty’s work, he said.