Pabco's Las Vegas plant enjoys a number of advantages due to its history and location - it might just be the luckiest place to be in Las Vegas.
Away from the glitziest part of the Las Vegas Strip, along the freeway, through the suburbs, over the low mountain pass, through the canyons and out into the low hills and the scrubland, twelve miles north east of the neon signs and spectacular show-girls, you will find a compact and fortunate wallboard factory: Pabco Gypsum Las Vegas.
Pabco is part of Pacific Coast Building Products, a privately-held company started by Fred Anderson on 17 February 1953 as the Anderson Lumber Company. As the company says, 'In preparation for that day, Fred and his wife Pat put all they owned up for collateral in exchange for a bank loan. After leasing a piece of property, they bought an old truck, enough inventory to last them a couple of months and placed a small ad in the Sacramento Bee newspaper announcing the opening of Anderson Lumber. That opening would the first of many.' Pabco now produces roofing, gypsum wallboard and paper, while the Basalite division produces concrete blocks and bricks, Pacific Supply handles distribution, Alcal/Arcade is a roofing and insulation contracting division and the company has its own routes to market through 50 Pacific Supply distribution centres, all on the US west coast.
Global Gypsum Magazine recently had the opportunity to visit Pabco Gypsum's Las Vegas wallboard plant - one of the largest and lowest-cost producers in North America and named as the Global Gypsum 'plant of the year' in 2008 - at the kind invitation of Emil Kopilovich, vice president manufacturing. Emil started by pointing out some of the advantages enjoyed by the plant: "We are situated on 4000 acres of our own land, with our own deposit of gypsum rock; we are supplied by our own paper mill at Vernon; our energy costs are low due to our proximity to a co-generation plant and we are in a great location for product distribution."
Dean Smith, production manager, showed Global Gypsum Magazine around the unique high-speed plant, which has a capacity of 110MM2/year, enough to build 120,000 new homes.
Production process
"We are lucky here," started Dean Smith, "since we have a gypsum deposit of at least 120 feet thickness that will last this plant 500 years. The operation here started as a Pabco gypsum mine, supplying rock to the Fiberboard Corporation's plant in South Gate, California. We drill and blast the rock in the quarry and we are also lucky in that there is no overburden worth mentioning. After the blasting - which has been undertaken by the same family firm for several generations - we load up the gypsum with a front-end loader and take it to the primary jaw-crusher. The gypsum rock (at 84-86% gypsum) is then conveyed via a shaker screen and hammer mill to take the rock to <5/8" and then to a blade mill for further comminution. Here clay is separated from the gypsum and is sent to a tailings pond to settle. We then send the gypsum (at 92-93% purity) through a centrifuge provided by CMI - Centrifugal & Mechanical Industries USA - for primary dewatering. After the centrifuge, the gypsum passes through a Gencor 220t/hr gas-fired rock dryer."
Dean Smith explained that the plant can also use recycled gypsum in its process. An ACTA wallboard crusher from the Netherlands is being installed in a new recycling project at the plant, while a Nordberg crusher is already used to reclaim gypsum from out-of-spec board, with a screen then used to reclaim the facing paper.
Inside the plant building itself, the gypsum is passed through Raymond IMP mills prior to calcination and subsequent storage.
The plant has two wallboard production lines: the first line (running at 125 feet per minute producing 1/2" board) was started in 1964 by the Fiberboard Corporation, which was subsequently taken over by Johns Manville and finally by Pabco in 1977. Line No. 1 runs at 250ft/minute producing 1/2" board. The second line started production in 1998 at 250ft/minute. In 2005 the production capacity of the second line was doubled by increasing the line speed to 500ft/minute, followed by the construction of a much-needed new beneficiation plant.
Water for the operation of the plant comes from Lake Mead, which is only 8 miles from the Pabco plant, and which is delivered by pipeline. Supplies are 'grandfathered' (historically guaranteed) by the Colorado River Commission, while the plant also benefits from water rights from three on-site wells.
Line 2 is 1800ft long and features a thermoplastic belt from Derco. The new Line 2 was built for Pabco by Gyptech of Canada, with board lifting and turning machinery by Gorbel. The dryer on Line 1 benefits from the location next to the plant of a Chevron/Dynegy gas-fired electricity generating station built in 1994, since the driers use the exhaust gas from the generator-sets. The dryer can switch to gas-firing if the generator sets are down, for example for their yearly maintenance. The ABB Fläkt dryer on Line 2 is gas-fired and features a Sensortech moisture measurement and visualisation system.
Environment and safety
The plant uses Broadbent & Associates for continuous emissions monitoring at the plant, to ensure that it is within its stringent air quality permit limits. Emil Kopilovich also mentioned that the plant has not had a lost-time incident for over two years, which is a good record considering the on-site quarry and the size of the property.
Markets
The Pabco Las Vegas wallboard factory is very well-placed to supply its products to the growing city of Las Vegas, primarily via truck. However, the plant also has a rail spur, which it can use to transport products to California, as well as to Arizona, Utah and to Washington state - in fact to the whole of North America. As Emil Kopilovich stated, "Pabco Las Vegas is perfectly situated to supply Phoenix, Salt Lake City, San Diego and the rest of California and Nevada." Unfortunately, many of these areas were among the hardest hit by the recession. "The markets are starting to come back from the bottom of the downturn," said Emil: "From 2006 onwards we saw the market starting to dip and every year from 2006 to 2011 the market fell. Housing starts nationally bottomed out at around 500,000, and they are now up to 700,000 per year. Where we are now is not the two million housing starts that we saw in 2007, but at least now we are going in the right direction. Two million housing starts per year may have been an unsustainable rate back then, but now there is a real pent-up demand and by 2015 we may see a mini-boom in house-building. The housing market in general is starting to pick-up, partly due to legislation that has been passed to slow down the number of foreclosures - and in consequence the number of foreclosed houses coming onto the market."
"The Federal Reserve's decision to keep interest rates at practically zero also means that a 30 year mortgage can be had for 2-3.5%. The mortgage interest is tax deductable taking perhaps another 1% off the cost of a loan and that makes home ownership very cheap and very affordable."
"We are cautiously optimistic about the increasing number of housing starts. By way of illustration, the number of houses for sale in Las Vegas dropped from 20,000 to 3500 in one year, partly because it was more difficult for the banks to foreclose on properties and partly because investors - sensing the bottom of the market - have been scooping up properties, mostly for cash. Non-cash buyers, the ones that have to take a mortgage, have been looking for new homes and most of those are smaller homes, for under US$250,000. Not many new mansions are being built."
"With the plant closures that we've seen nationwide, we think that an annual housing start total of around 1.2million would bring the wallboard industry back to full profitability."
"Multi-family construction as a sector is doing pretty well right now, since so many families have been displaced from their single-family units due to the financial crisis. Commercial property construction has been 'okay' but the fact remains that there is still a lot of unlet commercial property out there, available for lease."
New opportunities
Emil Kopilovich went on to speak about some of the changes that the recession has brought to the company: "Currently we are operating at slightly above 50% capacity utilisation. Our focus has shifted from major projects to quality improvement, product development and cost reduction. Pabco Las Vegas employees have embraced these challenges and have achieved substantial results in a number of key areas. Quality control has been one focus area. During the last two years, the plant has set new records for lowering the number and cost of quality complaints. This achievement is further validated by the positive feedback received from customers."
"The economic downturn has also provided our employees with some unique opportunities to contribute to plant improvements and cost savings. The maintenance and engineering departments were able to complete major projects in-house, so that the wet and dry transfers on the No. 1 line were designed, fabricated and installed without outside assistance. With this approach, these projects were completed at a fraction of the cost of purchasing new equipment."
"A number of Las Vegas and Newark employees have also had the opportunity to travel overseas in a consulting role. They assisted with new plant start-ups in Italy, Russia and Australia. This assignment was not only financially successful: it also provided the employees with exposure to some of the latest technology in the gypsum industry."
Products
Emil Kopilovich mentioned some of the boards that the plant is capable of producing: "The plant has expanded its product offering to include 1/4", 3/8", 3/8" Flex, 11/16", 1" shaft liner, 'mold curb' and 'abuse curb' products. These products have enabled the plant to be a full service provider and maintain its market share in a difficult environment. Lightweight product has been an important trend for us and for all of the other market players."
Pabco Gypsum produces Pabco Litecore™ 1/2" board. LitecoreTM board is an interior sag-resistant gypsum board with a non-combustible, dimensionally stable gypsum core formulated to be lighter that original Pabco regular wallboard, which can be used in non-structural, non-fire rated wall, ceiling and partition applications, in new construction or renovation work. Since it can be used on both walls and ceilings, the need for two different products is eliminated. According to Pabco, the LitecoreTM board has the following advantages:
- Lighter than regular gypsum wallboard;
- A strong sag-resistant core allowing installation on walls and ceilings with 24" o.c. steel or wood frame spacing;
- Consistent edge tapers produce a monolithic flat surface;
- Easily cut, permitting quick installation, painting and/or decorating.
As Pabco says, 'In manufacturing a lightweight gypsum wallboard, we consider many factors; being lightweight is only one. Pabco Litecore™ does not sacrifice equally important factors of integrity and performance.'
Conclusion
As one of the lowest-cost producers of wallboard in North America, Pabco Gypsum Las Vegas is in a fortunate position indeed. Some might even say that the plant is the luckiest place in Las Vegas!
