As the world gets cleaner, Wahlco Inc. is getting bigger.
The Santa Ana maker of pollution control equipment for power plants is doubling the size of its local manufacturing with a new lease down the street from its current operations.
The extra space is needed to meet demand from coal burning plants that are under pressure to reduce pollution.
Wahlco’s fastest growth is happening abroad in China and India where coal burning isn’t done as cleanly as it is here, according to Chief Executive Al Munoz.
The company’s Santa Ana lease is for 54,000 square feet, 38,000 of which is its factory floor. The lease is for seven years with an option to extend it another 10 years.
Wahlco has spent its 36 years in business at its current 41,000-square-foot building, of which 19,000 is factory space, off Harbor Boulevard. It plans to move by September, after spending about $650,000 on a roof, air conditioning, doors, office space and carpet at the new building.
The company has 100 workers, including welders, engineers and administrative staff. It wants to hire about 20 more, mainly welders, metal workers and electricians.
“We’re looking to put in a second shift,” Munoz said.
The company had $30 million in revenue last year. This year it’s on track for a 50% gain, according to Munoz.
Mostly U.S. Sales
About 75% of sales are in the U.S., with the rest coming from various other countries, including a recent sale of 12 units to a South African company.
Customers include Arlington, Va.-based AES Corp., which runs a power plant in Huntington Beach.
Wahlco is one of two companies licensed to make machines that turn the chemical urea into ammonia.
The technology, and chemical reaction, that makes the conversion is patented by Santa Clarita-based EC & C; Technologies Inc. Wahlco helped to develop it.
The ammonia is mixed with smoke generated by power plants to help cut down on pollutant ash.
Wahlco’s equipment,tank systems that hook up to the smokestacks of power plants,generates thousands of pounds of ammonia an hour.
Each tank system is custom made and varies in size and by amount of pollution reduction needed. The equipment can cost in the millions.
Wahlco also makes other machines to clean air using different chemicals as well as pumps and heaters.
The company is seeking to branch out from custom products to more standard offerings.
“The new facility will be a big help for that,” Munoz said.
Wahlco plans to use common elements of all the products it makes as templates for lines that could be produced more efficiently.
The company’s challenge is to move beyond power plant customers, which make up nearly all of its business today.
Munoz said he’s looking to target paper and pulp, wastewater, drug and petroleum plants.
Higher steel costs have burdened the company, he said. Wahlco has been able to pass along higher costs to its customers, he said.
Workers’ compensation insurance costs, which have come down in recent years but still remain high, are an unfortunate but unavoidable cost of doing business here, Munoz said.
“I pay a premium to manufacture here,” he said. “We’re here because we believe integration between engineering and fabrication is the key to success.”
Staying in Santa Ana was a no-brainer, according to Munoz.
Workers responding to a company survey about where they wanted to work picked Santa Ana.
“We looked at 10 locations within 10 miles,” said Barry Southam, vice president of sales. “They wanted to stay in Santa Ana.”
The company is moving within Santa Ana’s enterprise zone, part of a state program that offers tax credits for companies when they hire local workers or buy manufacturing equipment.
Competitors include Fuel-Tech Inc. in Batavia, Ill., Peerless Mfg. Co. in Dallas and Integrated Flow Solutions LLC in Tyler, Texas.
Robert Wahler founded Wahlco in 1972 after being inspired by the federal Clean Air Act of 1970.
Since then, the company has changed hands several times. It once was public for a time with yearly sales of $80 million, helped by a patent that eventually expired in 1992.
In 2001, San Juan Capistrano-based Apex Financial Investments LLC and the company’s managers bought out the company.
