Katana Summit says it will close its two manufacturing plants in Columbus, Neb., and Ephrata, Wash., if a buyer does not materialize for its operations, Kevin Strudthoff, the company's president/CEO tells NAW.
According to Strudthoff, the company enjoyed significant production in 2012 due to the increased demand for wind turbines caused by the pending expiration of the production tax credit (PTC).
However, the PTC's potential expiration has caused the wind industry to halt the majority of development for 2013 until government policy is more certain.
The news is just the latest occurrence of consolidation in the wind tower space. Last week, Dallas-based Trinity Structural Towers purchased the assets of rival tower maker DMI Industries – itself the victim of PTC uncertainty – from Otter Tail Power Corp. for $20 million.
‘I hope we can find a buyer to keep these plants operating, but unless government policy for renewable energy becomes more stable, I'm afraid we'll see more closures and job losses in the industry into 2013," he says.
In fact, he adds, the company does not have a single order for 2013.
Strudthoff says employees at both manufacturing plants were notified of the decision and will continue working to fulfill existing contracts around the end of October.
‘While the majority of production workers will likely be on temporary layoff by Nov. 1,’ he says, ‘We do not have a time table for fully closing the plants and hope to have a buyer that will continue production.’
Once complete, layoff assistance will be provided. Katana Summit currently employs 214 in Nebraska and 79 in Washington.
Strudthoff emphatically denied rumors that Katana would close on Nov. 1, which had been reported by some media outlets. Without giving a definitive timetable, Strudthoff says, ‘We'll close if we can't find a buyer.’
According to its website, the company started in the wind business in 2001 as T Bailey Inc. – a Pacific Northwestern firm with roots in civil/industrial general contracting and heavy steel plate fabrication. Six years later, the renamed Katana Industries continued to gain market share, which led to the formation of Katana Summit LLC, a joint venture between Katana Industries, Sumitomo Corp. of America and SC Steel Investment LLC.
Ground was broken on a new manufacturing plant and corporate headquarters in Columbus, Neb. It built a state-of-the-art production facility in June 2008 that had capacity for 200 towers per year. Demand for towers continued to increase, and Katana Summit had begun plans to double the Columbus capacity by early 2009.
Although Strudthoff says that 2012 marked a year with many orders, it was also one filled with challenges.
Not only has a pending wind industry slowdown hurt the tower manufacturer but Katana was among several U.S. tower producers – including DMI and Trinity – whose businesses suffered from Chinese and Vietnamese producers sending towers into the U.S. at lower-than-market prices. Although the U.S. Department of Commerce later determined that utility-scale wind turbine towers made in China and Vietnam were illegally dumped into the U.S., the damage has already taken its toll on U.S. producers, such as Katana.