Packager Expands To Meet Gen-Set Market Growth

Diesel Progress North American Edition, May, 2001 by Mike Osenga

There's no hotter engine market in North America right now than electrical power generation. Packaging diesel, natural gas and gas turbine generating systems has kept the generator set manufacturing community very, very busy in recent months. And lately it seems, the larger the set, the stronger the business.

The power problems in California, combined with the economics of not having electricity for manufacturing, retail and even residential use, has fueled a boom in generator set packaging and manufacturing.

At Chillicothe Metal Co. (CMCO), this strong interest in packaged engine-powered systems has caused the 38-year-old, Chillicothe, Ill., manufacturer to more than double its square footage through two recent expansions, as well as reorganize its existing space. Chillicothe has added 55,000 sq.ft. and now has 100,000 sq.ft. under roof for manufacturing, painting and testing engine systems.

"The expansion and reorganization means we can more efficiently adapt to meet our customers requirements," said Rob Fennell, operations manager. "The larger facility ties our processes together more efficiently We doubled our floor space, but tripled our output capacity."

As part of the expansion, CMCO has increased the width of its bays flnm 35 ft. to 50 ft. The overhead crane heights were increased from 18 ft. to 26 ft. CMCO's capabilities for heavy lifting were further increased by the addition of 15- and 20-ton bridge cranes. Each bay is 440 ft. long.

The expansion was done in part because of what Sales Manager Ken Niekamp saw as an opportunity in building increasingly larger power generation packages. Niekamp says while CMCO regularly builds sets from 100 to 2000 kW the majority of business today is in the 1500 to 2000 kW range.

"The on-site power industry continues to grow, making more market opportunities available for us he said. "We invested in heavy lifting technologies such as the large overhead cranes and high capacity (80,000 lb.) fork trucks to ensure our market position. The need to move larger and larger gen-sets through the facility necessitated the increased in production capacity."

Niekamp and company founder Bob Fennell said CMCO's business has evolved into an interesting mix of custom gen-set packaging, compressor and pump packaging, as well as more of the "bread and butter" traditional gen-set packages. While the latter continues to be CMCO's core business, the growth is undoubtedly coming from the custom packaging side of the business.

CMCO started business in 1963 as a sheet metal fabricator focusing primarily on switchgear and generator set housings. Today, the company has a complete packaging operation with full electrical testing capabilities to meet military, petrochemical and utility specifications, as well as a complete machine shop and a new industrial sandblast/painting facility. CMCO manufactures steel fuel tank bases, steel and aluminum housings, trailers and other products, mostly for diesel engine distributors.

Brad Fennell, a senior salesperson, said, "CMCO has carved out a special niche in sound attenuated housings, a niche that continues to grow as sound requirements for stationary engine packages becomes increasingly stringent."

Most of CMCO's business comes from engine distributors worldwide including Caterpillar, Cummins, Detroit Diesel, Deutz, John Deere, Kobler, Onan, Waukesha and others. CMCO adds components such as enclosures, skids, trailers and fuel tanks and specializes in small to mid-sized production runs of components that an individual distributor cannot cost effectively supply Bringing these economies of scale to individual packaged generator systems is the niche CMCO has carved out in the burgeoning gen-set markets.

Niekamp said the components and expanded services offered by CMCO have grown both because of the larger sizes of gen-sets, as well as their ability to compete within increasingly tight economic and environmental requirements.

"As we've moved to bigger projects with bigger engine packages, CMCO's portion of a project has increased accordingly, especially with the environmental needs, specifically sound requirements," he said. "More and more, as companies look to outsource the packaging and logistics portions, we can step in and manage their projects. As changing environmental and marketing considerations play into the equation, dealers are requesting more components and services directly from us.

"We're doing more interconnects from the switchgear to the gen-sets, as one example," said Rob Fennell. "There has also been a big increase in requirements for special paint finishes, leading to our new paint and finishing capabilities. We also have a growing line of UL-approved fuel tank bases, plus sounds ducts and some specialized vibration isolation products.

"We are also asked to do more resting prior to delivering the finished product," he added, "and we have expanded our testing capabilities to test packages under controlled load as complete power systems."

Niekamp said about 95 percent of the components the company adds to a genset today are manufactured in-house. These include the fuel tanks, enclosures, skids, trailers, sound baffles, rain caps, exhaust assemblies and more. Being a UL-listed manufacturer is especially important for the fuel tanks, he said. Fuel tanks are a key component, as almost all projects want the tanks built into the skid and also want as much fuel capacity as local requirements or the project specs will allow.