HIBBING -- Dan Burkes relishes taking rubber from Ohio, steel pipe from West Virginia and urethane from Louisiana and turning them into Northeastern Minnesota's newest export.
On Wednesday, IRACORE International Inc., a subsidiary of Industrial Rubber Products of Hibbing, will ship its first truckloads of wear-resistant pipes to Canadian oil-sands fields.
Each 50-foot-long, 30-inch-diameter pipe produced at the company's new 50,000 square-foot Hibbing manufacturing plant contains a patent-pending lining that resists degradation.
The pipe will be used in the oil-sands fields, where rock and gravel with high oil content is processed to produce petroleum.
Canada's oil sands contain an estimated 1.7 trillion barrels of oil, of which about 177 billion barrels is recoverable with existing technology.
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Twenty-eight petroleum companies and developers are operating in three Canadian oil-sands deposits: Athabasca, Peace River and Cold Lake, according to the Web site www.oilsands.cc .
IRACORE's proprietary pipe, developed from 2003 to 2005 by the company's technical resources team in Hibbing, will transport oil sands for Suncor Energy, a Calgary, Alberta-based company that operates near Fort McMurray, Alberta.
Carbon-steel pipe currently used in the Canadian oil sands field lasts about two years before wearing out.
IRACORE's pipe, with its special lining, is projected to last 10 years.
"We do pipe all over the world," said Burkes, Industrial Rubber Products' president. "We knew this market would be huge. Our pipe has become their product of choice."
For decades, Industrial Rubber and its subsidiaries have produced lined pipe and urethane parts for Northeastern Minnesota's taconite industry, and for copper, nickel and gold mines throughout the world.
A three-year contract to produce 170,000 to 300,000 feet of oil-sands pipe is expected to about triple the company's annual revenue, Burkes said.
Annual revenue is projected to grow to $50 million to $60 million, compared to $16 million to $18 million in the past five years, he said.
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"It's going to be a substantial increase in our output for this year and going forward," said Chris Liesmaki, Industrial Rubber Products vice president. "This expansion is a good start for us, and we see a huge opportunity."
Each component of the pipe is manufactured in the U.S., including steel pipe from West Virginia, urethane from Louisiana, rubber lining from Ohio, couplings from Texas and fabrication in Wisconsin.
The components come together in Hibbing, where about 20 new employees have been hired and another 15 to 20 will be added within the next few weeks, Burkes said. The company and its subsidiaries in Utah and Canada employ about 145 people.
"When I look at it, we're exporting steel, and that doesn't happen a lot in the United States today," Burkes said. "I like the idea that the iron ore used to make the pipe is coming from the Iron Range, and we're doing this with Minnesota labor. I believe we will be one of the largest exporters of steel in northern Minnesota."
IRACORE is testing the pipe at other Canadian oil-sands projects, which could lead to more orders, Burkes said. "I'm sure everybody [other pipe manufacturers] is chasing it right now," Burkes said of the lined-pipe technology. "But we believe we have a lot of advantages because we're already there."
LEE BLOOMQUIST can be reached weekdays at (800) 368-2506, (218) 744-2354 or by e-mail at leebloom@cpinternet.com .
