Were it not for the constant clatter of freight trains rumbling through the Locust Street crossing, Bill Caputo would feel like he's in a Rust Belt ghost town. The 64-year-old, dress-downed executive is doing something about that.
Looming federal regulations curbing emissions of mercury and acid gases from coal- and oil-fired power plants has fueled demand for emissions cleansing equipment made by BCSI LLC, Mr. Caputo's metal fabrication business. It is located in McKeesport's most prominent industrial graveyard, U.S. Steel's former National Works.
The backlog of orders is creating jobs at the company and spurring it to expand into a third building at the former steel mill complex. Mr. Caputo said the company currently has 83 employees and hopes to increase that to 110 to 115 in the next few months. It recently added a second shift and soon will switch to a six-day-a-week operation.
"Right now, we've got a backlog of about $60 million," Mr. Caputo said. "We're booked right through the end of next year."
Some of the growth stems from Mr. Caputo's decision to sell his company last August to Advanced Emissions Solutions, whose primary business was providing technology that refined coal in order to limit emissions of nitrous oxides and mercury. The suburban Denver publicly traded company paid Mr. Caputo $2 million initially and will pay him an additional $3 million over the next five years.
Before the sale, Mr. Caputo was a one-man band.
"We were a small company. We didn't have any sales reps or outside salesmen. I did all of that," he said.
Standing inside the mammoth shop that makes the pollution control equipment, Mr. Caputo is barely distinguishable from the cadre of welders, pipe fitters and other workers assembling the 90-foot silos. He's wearing a drab polo shirt that is not tucked into his blue jeans, clean white sneakers and a jacket. He says it's about the same way he dressed for a recent board meeting of the company's new owners.
"This is the way I am," he said with a satisfied grin.
Advanced Emissions Solutions President and CEO Mike Durham is more interested in Mr. Caputo and the technology he pioneered than his wardrobe. When the acquisition was announced, he estimated combining Mr. Caputo's business with Advanced Emissions Solutions' pollution control unit would generate more than $300 million in sales over the next three years.
"We felt it was in our interest to acquire the company that has the best equipment out there," Mr. Durham said.
The purchase was an attempt to capitalize on regulations curbing emissions of mercury and acid gasses from power plants, industrial boilers, cement and other sources that were issued in recent years by the U.S. Environmental Protection Agency. Mr. Durham estimated the regulations will create $1 billion in demand.
The silos BCSI fabricates out of half- or quarter-inch thick steel plate are used in dry sorbent injection systems. Powders containing calcium and sodium are stored in the silo, then blown out the bottom into the exhaust system of a power plant, where they capture the harmful emissions. Mr. Caputo said the systems are a cheaper, quicker alternative to wet scrubbers, which rely on a liquid slurry containing lime or some other material that is injected into the exhaust stream where it absorbs the harmful materials.
Wet scrubbers can cost $25 million to $100 million and take more than a year to build and install, Mr. Caputo said. That compares with a cost of $2 million to $10 million for one of BCSI's systems, which can be built and installed in eight months, he said.
"It's actually saving some power companies from going out of business," Mr. Caputo said.
He got into the fabrication business nearly four decades ago, making components of waste water treatment systems, conveyors and other equipment. In about 2002, Mr. Caputo and Ray D'Alesandro, a friend who was a chemical engineer and lime salesman, discussed making silos containing lime that could be blown into the flue stacks of coal-fired plants to remove harmful emissions.
They convinced the Tennessee Valley Authority, a federal agency that provides electricity to 9 million customers in seven southeastern states, to test the technology. When it worked, TVA insisted on keeping the temporary unit until BCSI could replace it with a permanent one.
"For about three or four years, we were the only ones doing it," Mr. Caputo said.
The EPA regulations encouraged more competitors to enter the business and prompted the acquisition of BCSI. Originally, Mr. Caputo was going to be a consultant for the new owners. But he reluctantly accepted a job as president of his old business on July 1.
"We kind of needed him to step back into this to make sure we can handle this growth," Mr. Durham said. "I think at year-end, we'll be at three shifts."
Mr. Caputo said his toughest challenge is finding workers with the fabricating skills necessary for the jobs, which he said pay from $18 to $25 or $30 an hour, depending on an applicant's skills and experience.
The business will remain strong through 2016, the deadline for complying with the new EPA rules, Mr. Caputo said. After that, he expects to sell the equipment to China, India and other countries adopting tougher environmental laws. More business could be generated by the adoption of draft EPA regulations covering the liquid and solid wastes power plants generate as well as water treatment standards.
Anticipating an eventual rise in natural gas prices, Mr. Caputo expects some residual business from power companies converting back to coal from natural gas.
"We have a 10-year lease. We plan on being here for a while," he said.mobilehome - businessnews - neigh_south
Len Boselovic: email@example.com or 412-263-1941. First Published July 28, 2013 4:00 AM