PANAMA CITY — Business is booming at Berg Steel Pipe Corp.
After about a year of slow activity, things have turned around in a big way for the Panama City-based manufacturer, which now has an order backlog of nearly 1 million tons of pipe.
The backlog is enough to keep the company in production on a two-shift operation through the summer 2016.
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“Of course we are very excited with what happened here recently with all the order bookings,” said Berg President and CEO Ingo Riemer. “It’s almost 1 million tons that we worked in a couple of weeks. That is really extraordinary as a comparison.”
In August, Berg announced it had secured the largest order in its 35-year history, to produce 600 miles, or 480,000 net tons of large diameter pipe. Just months later, the company landed two more major pipe orders.
The orders were enough to create about 140 new jobs at Berg and move operations from one shift to two in October. Berg’s facility in Mobile, Ala., which specializes in pipe production from coiled steel, also moved to a two-shift operation this year.
“We (had) been on a one-shift operation in Panama City since March due to a lack of orders,” Riemer said Tuesday. “Now we are back. It’s very remarkable.”
Riemer cited the reason behind the boost in business as two-fold: a skyrocketing demand for natural gas pipeline, along with Berg’s capability to produce a quality product.
With a shale boom currently underway in the U.S., Riemer said more power plants are moving toward using natural gas as a cheaper energy source. About 90 percent of Berg’s business comes from producing high-pressure natural gas transmission pipelines, he said.
“Gas is substituting coal here as a source for energy,” Riemer said. “On the export side, that’s also developing. It’s three-fold cheaper here than compared to Europe, and four times cheaper than the Asian market.”
Third shift possible: As business continues to pick up, the company is considering adding a third shift, which could boost hiring even more. Before that can happen, however, Riemer said Berg must figure out how to allocate its experienced employees, and how a new shift would work with the logistics of receiving and transporting products from its Port Panama City facilities.
Berg imports steel plate to its plant primarily by ship from shareholders in Germany, and also sources some steel domestically. After receiving the plate, Berg rolls, welds, finishes and extensively tests its product at the plant before shipping it to customers via the Bay Line Railroad.
In the past two years, Berg has invested about $30 million in improving its facilities at Port Panama City to ensure the company is producing a quality product.
--- VIDEO: A LOOK INSIDE BERG PIPE»»
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“You have to have your cost under control — that is clear — but quality is our main focus here,” Riemer said. “We want to supply a first-class product. None of our customers want to show up on the front page if a gas pipeline blows up.”
As hiring continues, Berg also faces challenges in finding skilled workers to staff its plant.
“We are looking for technically-skilled people, and in Bay County there are not many manufacturing companies,” Riemer said, adding that the company is working with the local colleges to pique interest in technical work. “It’s challenging to get technically skilled people that are interested in a technical job."