Uncertainty is the biggest threat to success. And no matter the intention, the Trump tariffs and the ensuing trade war have injected a big unhealthy dose of it into the industrial world.
This is a fact that transcends politics. There’s no question that tariff-induced spikes in steel and aluminum prices of more than 25% have industrial owners worried. While many of them recognize that a tariff could bring domestic suppliers into economic equilibrium, the cost uncertainty has them wringing their hands. That’s because an estimated one-third of their capital project spending comes from steel.
And the larger the project, the bigger the problem. Some economists think it could add as much as $90 million to the price tag of Yuhuang Chemical’s methanol plant in St. James Parish and delay other projects such as Lake Charles Methanol (which would receive major components from China).
The impacts are fanning out far and wide, impacting multiple markets and geographies.
Those in the manufacturing complex who make products out of steel and aluminum—i.e., the makers of automobiles and construction equipment—are already passing off higher prices to the consumer or are looking to manufacture elsewhere.
Louisiana equipment distributors say this could, and probably will, impact the cost of construction equipment down the line.
While large suppliers such as H&E Equipment Services in Baton Rouge have largely avoided this so far, they can’t make the same promise for 2019.
There are other consequences: The instability has led to shorter project estimation cycles for some industrial contractors, and one of the state’s largest ports, the Port of New Orleans, has seen significant drops in both imports and exports.
While some take a more optimistic turn on the situation, the consensus is that something has to give, and that everyone could benefit from a little more certainty in regards to future costs.
AN EXTRAORDINARY RELATIONSHIP
In the booming southwest corner of the state, a decidedly unique relationship has been forged between Sasol and its immediate neighbor to the west, Mossville.
Over the years, Sasol has taken some rather extreme measures to accommodate the residents there, offering a Voluntary Property Purchase Program (spending up to $90 million in the process), financing and overseeing a Workforce Resource Guide, and taking the unprecedented step of capturing and preserving the community’s rich history.
The Imperial Calcasieu Museum is leading this historical preservation effort, and has become home to an exhaustive collection of photography and memorabilia from the community. Additionally, audio compilations of historical accounts have been captured by LSU’s T. Harry Williams Center for Oral History.
This is happening none too soon—the community is already a shell of its former self, a process that began long before the South African-based company entered the scene with its $11 billion ethane cracker and derivatives project.
Commensurate with its investment, Sasol continues to pursue other corporate social investment initiatives to address areas the community has identified as important.
REACHING THE MILLENIALS
Millennials are the primary motivation for a technologically progressive—and undeniably more effective—approach to learning in the industrial sector.
Simulators, augmented reality applications, SIM games and other virtual technologies are playing increasingly formative roles in attracting the younger generation to the workforce, and in the process training them more effectively.
SOWELA Technical Community College in Lake Charles is on the front lines of a push to develop more interactive ways to attract and retain the next generation of worker.
Leaders there have spearheaded the development of a mixed reality, tablet-based application that enables students to better visualize process components in various industrial applications as part of the school’s process technology curriculum. It’s being officially launched this fall, and is expected to improve the ease and speed of learning in the PTEC world.
And that’s just one example. It’s fast becoming a brave new world, as the Alliance Safety Council, River Parishes Community College and Fletcher Technical Community College are all pursuing similar endeavors in an effort to provide a more productive, engaging—and less costly—way to train.
10/12 Industry Weekly
Don’t forget to sign up for our free e-newsletter, 10/12 Industry Weekly. We’ll be delivering the latest information about projects, workforce, operations and maintenance, safety, environmental, transport, construction, design and more, right to your inbox. Sign up on 1012industryreport.com.
