2/27/2015 Updated 2/27/2015

Gates to expand Kansas plant this summer

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By Mike McNulty

IOLA, Kan.—In its first major move since a new owner took over in mid-2014, Gates Corp. plans to expand its Iola plant to accommodate a new line of oil and gas products.

With new parent company Blackstone Group L.P. now at the helm, the Denver-headquartered industrial and automotive product maker said it plans to add about 82,000 square feet to its Iola factory, increasing its size to more than 500,000 square feet. The company did not furnish financial details on the expansion project.

The facility presently manufactures industrial fluid products for a variety of industries, including the oil and gas, construction equipment and other industrial hose markets, a spokesman said.

Current projections call for the company to launch construction on the addition in the summer. It anticipates it will take about 18 months to complete the project.

New equipment is expected to be added at the factory, but the spokesman said details or specifications on the machinery needed for the new product line were unavailable. The same holds true on the expected addition of new personnel, he said.

He did say the plant was accepting applications for qualified candidates for a number of positions. “After the expansion is complete and the systems fully tested, the company expects to continue to add positions to support the additional capacity and product lines.”

In operation since 1975, the Iola factory currently employs more than 650 in its manufacturing and distribution operations.

One of the products expected to be produced at the expanded plant is the company's Black Gold XTreme 16C Choke & Kill hose, according to the spokesman. It's the first of its kind to be fully manufactured in the U.S., he maintained, adding that it's the only hose made in the U.S. to meet API 16C specification.

He said Black Gold XTreme hose was designed for modern drilling methods, including horizontal drilling, dynamic pressures, high fluid temperatures, complex fluids, high pressure drilling, high flow rates and large hose sizes.

Gates has manufactured numerous hose products for many years that are important to the oil and gas industry, the spokesman said. Its line of Black Gold Rotary Choke & Kill hoses covers a wide range of applications including oil field drilling, hydraulic fracking and refining.

“Selecting Iola as the site for the new facility (addition) speaks to the quality of the products our people manufacture there,” said Ken Friedman, president of the Americas region for Gates.

A global diversified industrial company, Gates' power transmission products include highly engineered rubber and polyurethane accessory drives and synchronous belts, idlers and tensioners. Its fluid transfer offerings feature hydraulic and transfer hose and assemblies, couplings and related services such as hose inspection, maintenance, repair and monitoring.

Gates' expansion in Iola is its first since Blackstone finalized the purchase of the company in July. Blackstone spent about $5.4 billion to acquire Gates from equity investment firms Onex Corp. and the Canada Pension Plan Investment Board.

Onex and CPPIB had purchased Tomkins P.L.C., Gates parent, in 2010 for $4.5 billion and since then sold several Tomkins and Gates operations in separate transactions. Tomkins acquired Gates from the Gates family in 1996 for about $1.16 billion.

Gates was formed in 1911 when Charles Gates bought Colorado Tire & Leather Co. for about $3,500 and slowly built the company into one of the largest hose and belt makers in the world.