HILTON HEAD ISLAND, S.C.—The carbon black company that doesn't reduce energy use, lower production costs or strive to improve the environment will be the carbon black company that fails.
That was the message of William R. “Bill” Jones, president and CEO of Sid Richardson Carbon and Energy Co., to the audience at the 26th annual Clemson University Tire Industry Conference, held at Hilton Head April 7-9.
Jones, the kickoff speaker at the conference, said manufacturing experts recommend that companies reinvest 15 to 25 percent of their net income annually to maintain operational efficiencies and remain competitive.
“In the past nine years, Sid Richardson has invested more than $160 million in its three plants,” Jones said. Forty percent of the money went toward energy-use reduction and efficiency improvements, he said, with 25 percent going toward equipment maintenance, 20 percent toward quality improvement and 15 percent toward environmental and safety improvements.
For carbon black manufacturers, Jones said, one key consideration outweighs all others for maintaining profitability and success: the total energy used to produce one kilogram of carbon black.
“This measure must be the key focus of the engineering and manufacturing sections within a carbon black company,” he said. “If that trend is going in the right direction at your company, you are going to be successful. If it is going in the wrong direction, you are going out of business.”
Sid Richardson makes all its business plans and capital investments around the energy reduction goal, according to Jones. “All companies have to improve,” he said.
Oil, natural gas and electricity combined comprise 60 to 80 percent of the cost of manufacturing carbon black, according to Jones.
“If your number is approximately 40,000 BTUs per pound, your company will not be profitable in the long run,” he said. “But if your number is approaching 30,000 BTUs per pound, your company is approaching world-class levels and will have a long and profitable future.”
Some of Sid Richardson's foreign competitors have gas and oil price advantages, but Sid Richardson concentrates on being competitive in the U.S. market, according to Jones.
In recent years the company has cut its energy costs by 2½ cents per pound of carbon black produced, he said.
“In carbon black, 2½ cents is a lot of margin, and we make 800 (million) to 900 million pounds of carbon black a year,” he said. “You can see how that affects our bottom line.”
Reducing energy use goes hand-in-hand with reducing greenhouse gas emissions, and Sid Richardson has won an award from the State of Texas for emissions reduction, according to Jones. It also has been cited for reducing its water use.
“In Texas, water is a precious commodity,” Jones said. “We've reduced our use of water there by 275 million gallons per year.”
Sid Richardson's Addis, La., plant was accepted into the state's Environmental Leadership Program in February 2008, according to Jones. In May of that year, the entire company joined the U.S. Environmental Protection Agency's Climate Leaders Program.
Membership in the Climate Leaders Program brings Sid Richardson all sorts of advantages, according to Jones. These include expert EPA technical assistance on inventories and reporting; access to the latest greenhouse gas tools, technologies and protocols; and engagement with other partner companies demonstrating climate leadership, he said.
Nevertheless, Sid Richardson has not registered as an ISO 14000 facility, according to Jones.
“ISO 14000 is more about making sure you're following your own procedures,” he said. “We find we'd rather focus on a process that shows you're making improvements in the environment.”