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Lathrop plant eyes $100M upgrade

Post Time:Jun 05,2008Classify:Company NewsView:353

Pilkington glass plant hopes for government aid

The owner of a construction-glass plant in Lathrop is proposing a $100 million upgrade, contingent on some government financial support.

The Pilkington plant, which opened in 1962 and employs about 160 hourly union workers and 30 salaried people, is part of Pilkington North America, a manufacturer of flat building glass owned by the Tokyo-based NSG Group.

Some plant improvement work is planned to begin this fall, but the bulk of the project would launch in the spring.

That involves shutting down the round-the-clock plant for about 90 days of work to demolish an enormous glass-making tank or furnace, replace it with a tank of new, more heat-resistant material and add equipment that will enable expanded production of more types of glass.

Part of the investment will involve installation of new advanced pollution control systems.

The furnace tank was last replaced in 1994 and is due for another upgrade, said Todd Huffman, a former manager of the Lathrop plant who is now vice president of strategic planning for Pilkington.

The tank, in which silica sand and other elements are heated to 3,000 degrees Fahrenheit to melt into molten glass, will be replaced by a tank of costlier refractory bricks that will allow the natural gas heat to be turned up by as much as 300 degrees to allow production with less iron content in the silica-sand mix.

Iron allows glass production at lower heat but leaves a greenish tint. Buyers increasingly are asking for clearer glass, Huffman said.

The company also wants to install equipment that will allow for the production of such new products as glass with a microscopic layer of metal on it so thin it´s not discernible to the eye yet reduces the amount of cold or heat that can pass through.

The solar industry also wants glass with a transparent oxide coating that conducts electricity.

Production of both types of glass will be possible with the addition of proprietary equipment that will add on-line coated glazing, Huffman said.

The production expansion would entail from 10 to 20 new jobs, he said.

The NSG board doesn´t have a specific amount of financial support needed for approval of the project, Huffman said.

But he said that based on his research, he´s hopeful that between $5 million and $8 million will be available from a variety of sources, such as state money for employment training and energy conservation-related grants.

The company also anticipates financial help via tax breaks from the newly approved expanded Enterprise Zone for San Joaquin County.

Huffman said he is working with California Strategies, a governmental affairs consultant group in Sacramento, to try to line up as much financial support as possible.

California Strategies partner Ted Harris said Enterprise Zone hiring credits over 10 years for new hires and replacements could total between $3 million and $6 million. Plus, sales and use tax credits would reach about $1.5 million, he said.

Other possible sources include state employee training aid, research and development money from the California Energy Commission and U.S. Department of Energy conservation-related grants, he said.

Mike Locke, chief executive officer of the San Joaquin Partnership, a public/private economic development group, said Enterprise Zone benefits would be a key element for such an expansion. Until he could see details about the proposed project, he said, he couldn´t cite specific prospects for financial support.

"But the opportunities to reach those numbers are out there," he said.

Jim Gulbronson, president of United Steelworkers Local 418G in Lathrop, said an upgrade and expansion might not guarantee jobs, but it´s a very good signal in that direction.

"It´s a good thing," he said. "Anytime a company is willing to invest $100 million in your plant, it´s good news."

The Lathrop plant used to produce automotive glass, including windshields and side windows for passenger cars and light trucks as well as construction flat glass. But in 2001, then-owner Libby-Owens-Ford Glass Co. shut down the auto-glass operation, which employed 175 workers - about half the work force.

Source: Pilkington Ltd.Author: admin

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