AS PART OF THE CLEAN AIR Act of 1970, the Environmental Protection Agency required the virtual elimination of nitrogen oxide--NOx--emissions by Jan. 1, 2010. It also created a new industry, which Hall Tank Co. of North Little Rock was quick to become a part of.
To reduce NOx emissions, the diesel engine industry agreed on a selective catalytic reduction process that involves injecting diesel exhaust fluid into a vehicle exhaust stream. DEF is made up of a mix of urea (the nitrogen compound produced naturally in urine) and water. DEF can't be stored or dispensed using typical petroleum equipment but must be contained in either plastic or stainless steel tanks.
In anticipation of this industry change, several years ago Hall Tank Co. began preparing to design and build DEF storage units, and production is now in full swing.
"We started production last year, probably in the third quarter," said President Robert Hall. "It was sporadic. We were just kind of producing a few, and it finally built up to where, about in the middle of the fourth quarter, we were really in full swing."
On average, the company produces four DEF storage tanks a week, though it has the capacity, Hall said, to produce six.
Hall said that from the beginning, when he realized that there was a new industry about to get under way, he had an interest in being a part of it. "I'm a fairly aggressive, out-of-the-box kind of person," he said. "I knew it was a good fit for our business. We're already, being a steel tank manufacturer, supplying the customer base that would be using this kind of tank, so it was a natural fit from that perspective."
Even though the DEF tanks aren't built from steel, Hall said it was still an area where he felt comfortable. "The customer base is the same; the market is the same. It was the same industry, the same area. And it's a tank. So we understood all that. And it's holding liquid. It's just different materials, different raw materials. But that didn't really matter." Hall chose not to discuss the specifics of tank production, as the design of the product is proprietary, though the company does not have a patent.
One of Hall Tank's biggest customers is Yara, a company based in Tampa, Fla. Yara, Hall said, is the world's largest supplier of urea and DEF, and Hall Tank is supplying the company with its DEF storage units.
As the industry has grown, so, too, has Hall Tank. Hall said that the company had to make a minor investment in some new equipment, and had to add on to one of the company's existing buildings to create more space for production. Hall Tank has hired about 10 additional employees, and Hall said he suspects as production increases so will the workforce.
Although production got off to later start than Hall would have guessed, it has, for the most part, gone pretty much as he thought it would. "I did not expect the first real year of production to be 2011. But of course, I didn't expect the recession either. The recession has really set things back about three years."
Now that production has started though, Hall seems happy with its pace, which he expects to be steady through the third quarter of this year. After that, Hall predicts, his DEF will pick up. He expects the company to see a "30 percent increase in the fourth quarter from where we are right now."
Hall said that the DEF business had increased the company's tank division revenue by about 20 percent over last year. "It has been good for our overall business."
By Joanna Kauffmann
JKauffmann@ABPG.com
Author: Joanna Kauffmann
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