In July of 1996, Jack Rentz opened an engineering company to develop innovative designs for industrial boiler applications. Problem was, his customers didn’t just want Rentz to design new boilers, they wanted him to build the boilers.
This was how RENTECH Boiler Systems came to become the fastest growing success story in an industry that has for far too long put innovation and a solutions-orientation on the back-burner. It has enabled RENTECH to capture over 33 percent market share in what has been a declining industry, and to grow to 250 employees.
“Today we are coming across units that are roughly 70 to 80 years old,” explains Rentz. “There are a lot of issues involved with systems that were designed back in the 1950s, not the least of which related to the need to improve efficiency and environmental performance. They are also plagued by maintenance issues. Now there are only three major boiler manufacturers for large industrial applications, and they are subsidiaries of larger companies that aren’t focused on this particular market. They sell the standard type of boiler to customers who aren’t interested in any different type of boiler design. The difference between the Big Three and RENTECH is that when a customer wants a new boiler, they say, ‘Pick the one out you want.” We start out with a clean sheet of paper and build a custom design that incorporates new technologies, so the boiler runs more efficiently, pollutes less and requires less maintenance.”
RENTECH offers five basic product lines: heat recovery steam generators, waste heat recovery boilers, fired package water tube boilers, specialty custom boilers and selective catalytic reduction and oxidation systems. Customers such as ConocoPhillips, Select Energy and Lambert Engineers/Sun Coke are primarily in the petrochemical, power generation, and refining industries and include both installations for new plants as well as retrofits. “One of our key competitive advantages is modular construction. In many instances where there are shipping constraints and limited crane capacity, pre-fabricated modules can minimize fabrication in the field, and with that reduce costs. Also, with modular sections we’re able to work more easily in tightly packed spaces, as opposed to an off-the-shelf one piece boiler which would require reconstruction at the facility itself to get it in to fit,” Rentz points out. “We also refurbish old boilers. We look at the problems and decide how we can engineer an upgrade that includes current modern mechanical designs, meets environmental regulation requirements, satisfies what the customer needs the boiler to do, and, above all, adds value to the customer.”
Custom Designed Solutions
A typical case in point was the Merichem Company that wanted to replace a 50,000- pounds-per-hour steam boiler with a new one capable of 70,000 pph. However, the cost of the new boiler greatly exceeded its budget. RENTECH rebuilt the existing boiler, widened the furnace two feet to accommodate a new low-emissions burner, and added fin tubes in the back end to improve overall efficiency and performance. The result was increased steam production of 65,000 pph at one third of the cost of a new boiler.
Another example is Calpine Corporation’s selection of RENTECH to provide three 250,000 pph auxiliary boilers for its Channel Energy Center in one of the world’s largest industrial corridors. Calpine needed these boilers to operate at 600 PSIG, 750° F and to comply with stringent Texas air quality standards as back ups to primary gas turbine boilers. If the primary equipment were to fail, the backup boilers have to reach full capacity in five minutes or less. RENTECH’s solution created the first superheated boilers in the world to meet these startup criteria.
Rentz emphasizes that “the focus of RENTECH is custom design and service. We utilize the skills, education, and experience of our people to best meet the needs of our customers on each application. These individuals apply their skills and knowledge to every step of the project, from design and manufacture to installation and service. If you add up the experience of all our employees, we offer our customers a total of over 2,000 years of industry knowledge. It’s our people who make the technology work – that really is one of our main competitive advantages.”
In addition to the flexibility and proven experience of its custom solutions-orientation, equally key to RENTECH’s market uniqueness is its technology. “One of the big issues for our customers is maintenance,” Rentz says. “Obviously the more you have to maintain the system, the more shut downs you have, the more it costs to operate. One way we reduce these maintenance expenses is our five-year warrantee membrane wall fabrication, instead of refractory walls or refractory seals. Membrane walls allow for faster start-ups and shutdowns, which extends the life of the walls because the furnace environment itself is cooler and thermal expansion and contraction is not an issue. Moreover, membrane walls result in lower carbon dioxide (CO) emissions and ultra low nitrogen oxide (NOx) emissions.”
Indeed, RENTECH’s savvy approach to building cost-effective low emissions systems is a significant competitive advantage in an industry that is feeling a good deal of pressure from new EPA regulations to improve performance. Says Rentz, “Our approach to achieve lower emissions starts with a thermal evaluation of the combustion turbine, heater, or boiler exhaust which must be controlled. Unlike emission control suppliers who only provide post combustion equipment, we understand all of the process conditions and can optimize the system in the most cost-effective manner. We employ low NOx burners and oxidation catalyst systems that significantly reduce emissions below regulatory requirements where instead of 80 particulate parts per million, we bring it down to 30. That’s particularly important in states like California that are strictly enforcing “no-net increase” emission standards. Many companies find themselves in the situation that if they don’t do something quickly to address environmental concerns, they could be forced to shut down. That’s a factor that’s really driving our market right now. RENTECH’s knowledge of heat transfer, low emissions burner, and catalytic reduction technologies, makes us uniquely positioned to offer industry a fully integrated solution that complies with all performance criteria and is backed by a single-source guarantee.”
People are the Critical Factor
RENTECH’s products are designed and manufactured in a 100,000-square-foot facility at company headquarters on 37 acres in Abilene, Texas. The facility is centrally located with easy access to rail, trucking and shipping facilities to reach customers nationwide. An additional advantage is that RENTECH can draw workers from an area home to oil and pipeline industries. “Since we are a custom shop, we require skilled workers,” Rentz explains. “Although there are certain sub-assemblies that we can inventory, by and large boiler making is an art, not a factory automated process, that involves a lot of man hours. We employ an experienced staff and people are the critical factor in what makes RENTECH different. With a lot of downsizing and other changes that have occurred in the industry in recent years, many very talented and experienced engineers have migrated to RENTECH,” Rentz said.
The complexity of today’s systems also affects the customer’s personnel utilization. “While we’re making boilers that have longer life expectancies and fewer maintenance issues, they’ve become much more complex in terms of the control instrumentation,” Rentz points out. “It’s double or triple the amount of instrumentation than on legacy boilers. Of course, we provide our customers with the training necessary to ensure their people are completely up-to-speed on how to operate these systems.”
An issue having a big impact on, RENTECH’s business is one that is universally affecting many manufacturers: the rising cost of steel. “No question about it,” Rentz says. “Rising steel prices are having a huge impact. Like everyone else, we are continually looking for new sources of supply. However, our customers understand the situation and that some of the escalation in raw materials costs has to get passed on to them. Because there is commonly such a delay between when a proposal is submitted and when we go to actually install a system, our quotes are typically tied to specific indexes we use as benchmarks to accommodate price changes. Sometimes it’s an open book situation. We show our customers our costs, they see how things have gone up, and there’s generally tolerance and recognition of the fact that this is just the way things are.”
For the immediate future, RENTECH is highly bullish on expanding business.
“We see the market for our particular capabilities and technology to be on the upturn,” Rentz says. “Right now, we’re carefully planning to make sure we can anticipate and respond to increasing demand. There’s also some opportunity in overseas markets, where we currently do 10 to 15 percent of our business. That’s usually the result of efforts of the independent manufacturing representatives we use and for now it’s not something we’re being overly aggressive with. Our focus is on being an American business, serving American customers, and creating American jobs.”