On June 8, Sediver announced a planned manufacturing facility in West Memphis to create glass insulators for Clean Line Energy Partners’ Plains & Eastern Clean Line project.
Read our full post here.
In an interview, Rene Tabouret, CEO of French-based Sediver, said the company chose West Memphis because of its location as a transportation hub and home to a qualified workforce.
The plant, which is scheduled to open in late 2016, will employ 70 full-time staff, all new hires, he said. Pay will be around $23 per hour, and staff will include several highly qualified positions, including engineers and senior management.
Sediver has made a more than $10 million dollar investment in West Memphis, but Tabouret said no precise impact study has been done on how the new plant will affect the city’s economy.
Wayne Galli, executive vice president of transmission and technical services at Clean Line, said construction on the project, a 700-mile direct-current transmission line to deliver low-cost, clean energy throughout the South, is scheduled to begin in 2017 and be fully commercially operational by the end of 2019.
Q&A: Tabouret and Galli
AMP sat down with Tabouret and Galli a day after they signed the agreement with the city of West Memphis to build the plant to find out more about the project, the Arkansas plant and the importance of Made in the USA products.
AMP: Explain what products will be made at the West Memphis facility.
Tabouret: Sediver is the world-leading manufacturer of glass insulators to be used in electrical and power lines. Insulators have a dual function — mechanical and electrical — to hold conductors and [keep them] insulated from the ground. It’s a product that has to fulfill this function for a very long time – 70 years – the entire life of the line. It is not a commodity product. [The glass insulators] have a mechanical strength of 50,000 pounds which means that if you attach something to the [steel] pin and to the cap on the other side, and pull it, nothing would happen until you pull 50,000 pounds. Probably nothing would happen for another 10,000 pounds, but the first thing that would break is the steel pin, not the mechanical glass
AMP: Why did you decide to come to West Memphis?
Tabouret: Because it is the best location in the world. … We used to be present in the U.S. with a manufacturing facility in the ‘80s with this particular technology, and then from ’90 to 2002, with another technology, called polymer insulation. In 2002, we moved out of the U.S.
We’ve been supplying insulators to utility companies in the U.S. for more than 40 years. … For us, coming back to the U.S. was definitely something that we had in our plans, not necessarily now and not necessarily in Arkansas. When we started discussions with Clean Line two years ago, we were selected to be their preferred supplier. Clean Line made it very clear to us right from the beginning that it was of paramount importance to source key products, as much as possible, from states where their project would go through. Arkansas was definitely a very strong recommendation from Clean Line.
As this project is of paramount importance, we started discussions with Arkansas representatives, [Arkansas Economic Development Commission] and the city of West Memphis. … Why we chose West Memphis is the transportation hub, access to qualified workforce, and having the possibility to work with local communities and college communities to train and dvelop wrokforce initiatives. It is a technical product so it is important for our neighbor to be very well trained.
AMP: Why is sourcing American-made products important to you?
Galli: From a project and company perspective, we took very seriously that big infrastructure projects are important for this country’s security, and big infrastructure projects bring jobs. This is obviously a very technically specialized field but there’s plenty of jobs that can be sourced locally. That was always important for us to garner the support from local communities by bringing jobs.
I think you’re seeing a trend in that especially in talking to other industries with rising cost of labor in China and transportation costs. It’s starting to make a lot more sense to make things like [these insulators] that are heavy and hard to ship in the U.S., and use them locally. But it’s been our Clean Line philosophy as well to source as much as we an locally. We’ll be purchasing over $160 million in Arkansas.
AMP: Why did you want to bring your manufacturing to the United States?
Tabouret: In the last 10 years, more and more utilities have selected this technology for its technical merits, long-term performance and low-cost maintenance which is very important. Even before we got this project with Clean Line, our volune of sales in [North America] is a volume large enough to justify a local investment. Very clearly, it’s a manufacturing facility to process those insulators at a higher cost than some of our manufacturing facilities in low-cost countries. But we believe, that because this product is not a commodity, by positioning and relocating to the U.S., we will eventually take advantage of a global premium that we’ll be granted to us by our utilities, by our customers, by communities for making made-in-America products.
Even though for the time being this would mean producing an insulator at a higher cost than what we could do in other parts of the world. For us, low cost is not necessarily the only driver — it’s one of the drivers, but not the only driver. For us, it is a strategic decision. For us, it is a very big decision to relocate or to establish a manufacturing plant in a country. We don’t get to build factories every year. When we make such a decision, it has to be a well-grounded, a solid, well-studied process and we did that. We’re convinced that we’re making the right decision by returning and relocating to the U.S.
Galli: From an owner’s perspective, we are focused on a total cost of ownership. So, there may be a slight premium with buying this directly from Arkansas on a unit basis, but the total ownership cost is less because of the advantages in operations and maintenance of this particular product.
AMP: What happens after the Plains & Eastern Clean Line project is built? Will the West Memphis plant remain open?
Tabouret: Once the project is over, we’ll [work on getting] preferred supplier agreements with other companies. We have many more customers in the U.S. that we will supply from that plant. That plant is there forever. This is a long-term decision.