Krebs profits rise with a twist of its own - The Explorer: Import

Krebs profits rise with a twist of its own

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Posted: Tuesday, August 31, 2004 11:00 pm | Updated: 7:49 am, Thu Mar 24, 2011.

August 25, 2004 - Since its incorporation in 1952, Marana-based Krebs Engineers, 5505 W. Gillette Road, has become one of the world's leading producers of a product that separates the wheat from the chaff, so to speak.

The company's key product is known as a hydrocyclone. It is used in the coal and copper mining industry to separate ore-based materials from sand, gravel, sludge and other slurries in a closed circuit grinding system. The process enables companies to work their pits more thoroughly and to continue to work pits that otherwise would have to be abandoned.

The hydrocyclone, based on a type of water purifier invented in 1891, is named for the twisting motion it produces in the separation process.

In the berry and fruit juice industry, hydrocyclones are used to separate seeds from the liquid. In the paper industry, they remove contaminants from paper pulp. At sewage treatment plants, they're used to remove grit, sand and other inorganic solids and debris found in raw sewage that reduce the abrasive wear to the plant's processing equipment. In the chemicals and dairy industry, they're used to recover oil, fat and other light solids for reuse. The devices also can be found in the meat processing industry

Among the factors that make Krebs a leader in its field are customer service and an ability to deliver on demand from various manufacturing facilities a quality product designed for a specific task, said Patrick Turner, vice president for sales and marketing.

In the first 36 years following its incorporation in Palo Alto, Calif., the company had sold more than 40,000 hydrocyclones to various industries. In just the last 16 years that number has more than doubled to 83,000, said Starla Jackson, administrative assistant for sales and marketing.

Employment, too, has increased substantially, from 91 to 114 employees locally and from 128 to 182 internationally since 1996 when the company moved to Marana to be closer to mining clients in Southern Arizona and increase its access to rail and interstate shipping.

As a global competitor, Krebs products, including a vast array of pumps to handle mill discharges and crush slurry and coarse solids, are being put to work in such countries as Ghana, Indonesia, Chile, China, Japan, the Phillipines and Africa, helping to produce revenues of more than $50 million annually. Other corporate offices have been established in Austria, Australia, Brazil and South Africa.

The company's achievements didn't come without periods of adjustment, however.

A year after the company arrived in Marana, the bottom fell out of the mining industry as copper prices plunged, forcing the company to refocus its energies on the coal industry.

Copper prices tumbled from an average of $1.30 a pound in 1995 to $1.05 the following year and a low of 71 cents a pound in 2002, forcing curtailment of mining operations at many mines, including Phelps-Dodge Corp. operations at Sahuarita and Baghdad.

By the end of 2003, prices had climbed from an average of 75 cents a pound to 93 cents. Through the first six months of this year, prices have been averaging an eight-year high of $1.24 a pound, a level that will enable Phelps Dodge to return to full operations by the end of this year, said Peter Faur, Phelps Dodge's director of corporate communications.

While the downturn in prices continued in the United States, Krebs changed its marketing approach in an attempt to open new markets, expand its product base and increase awareness of the company's expertise as new companies entered the market.

Krebs also continued serving mining operations in Chile and other parts of the world as companies optimistically prepared for an eventual market rebound.

Now that copper prices are rising, companies have been increasing their capital investments and projects that had been on hold for several years are finally coming to fruition, so much so that the company was able to add a second shift in May at its 75,000 square-foot headquarters building, Jackson said.

The company also re-entered the oil and gas industry in April when a five-year non compete clause expired following Krebs' sale of its technology. Krebs now has an office in Houston serving that market.

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