MINERAL POINT — The engine exhaust experts at Cummins Emission Solutions in Mineral Point didn’t have to invite the media and local political leaders to the opening of its new high horsepower facility last month.
But after 17 years of making emission-control products for global commercial markets in this small Iowa County city some 50 miles southwest of Madison, it was a good time for a public reminder of the company’s enduring stake in the area, plant manager Giri Thiyagarajan said. About a third of CES’ 470 employees live between Mineral Point and Dodgeville, with the rest from a 90-mile radius.
“This shows our commitment to this place,” he said, about the expansion and unveiling of the new plant on April 16. “Cummins could have pretty much put this facility anywhere. But based on the needs of our customers, as well as the expertise of our folks here, we thought this was the right place to invest.”
Company officials wouldn’t say how much the expansion cost. But it adds a second factory floor of some 20,000 square feet in a one-story building less than a quarter mile east of the existing facility, which includes 165,000 square feet of production space and the company’s business offices at 856 Fair St.
Because workers on the new floor will weld together some of the largest equipment made by CES, the building includes overhead cranes to move products and machines to turn pieces as they are built to provide the best and safest angles for welding. It also boasts a prototype area to build and test new designs and a collaboration space featuring interactive technology that allows production workers in Mineral Point to see, talk and draw together with company engineers in Stoughton and other locations.
“Our new plant is a direct reflection of our innovative mindset,” said Srikanth Padmanabhan, CES vice president and general manager. “While the plant is equipped for large-size (emission control) solutions and quality production, our business has placed an equally strong focus on employee and building safety.”
The need for emission controls on engines for vehicles and equipment is driven by federal environmental regulations that since the 1970s have required increasingly more stringent air-quality standards.
Part of a global enterprise
CES is a subsidiary of Cummins Inc., a global enterprise based in Columbus, Indiana, with 48,000 employees worldwide that’s best known as the world’s leading diesel engine maker.
Engine sales produced close to half of the conglomerate’s $17.3 billion in revenues last year, with the rest from related equipment, made by subsidiaries including CES, such as fuel systems, controls, air handling, filtration and emission control.
Created to provide cleaner solutions for treating the byproducts of engine combustion, Cummins’ CES subsidiary is a multinational corporation, with operations in China, India, Germany, Brazil, South Africa and the United Kingdom, in addition to Indiana and Wisconsin.
CES makes emission control systems for the engines of equipment and vehicles used in both the on-highway market — mostly 18-wheeler semi trucks and buses — and off-highway markets, which includes mining, farming, construction, rail and marine.
The Mineral Point location was CES’ largest manufacturing site globally for emission control systems even before the expansion. It’s responsible for production including all of the company’s North American on-highway customers, as well as the high horsepower, or largest-engine, segment of the off-highway market, now to expand and be handled in Mineral Point exclusively in the new facility.
“Mineral Point is a very important part of both Cummins and CES,” said Janet Williams, director of corporate communications for Cummins Inc.
No workers were added to staff the expansion. Some hiring is expected for the Mineral Point location over the next few years, but Thiyagarajan said he didn’t know how many or exactly when that could occur.
The Mineral Point expansion was needed to handle up to 40 percent forecast growth in demand for emission controls specifically for the largest engines, or those above 19 liters, used in the off-highway market.
Current off-highway customers include big industry names such as Komatsu, Hyundai Heavy Industries, JLG and Buhler, Thiyagarajan said, with on-highway customers including PACCAR, Daimler Trucks of North America, Navistar, Volvo and Blue Bird Bus.
CES’ main product for all engines is an enclosed, roughly cylindrical assembly that cleans toxic exhaust emissions. It features components including a filter and a space for controlled reactions spurred by a chemical catalyst, which combine to capture and burn away the harmful by-products of engine combustion.
“Basically what they do is take in the tailpipe emissions that comes out of an engine and get a cleaner product out, reducing much of the particulates and harmful emissions,” Thiyagarajan said.
System variations are possible based on tightening emissions standards and different customer needs such as better gas mileage, more horsepower or increased reliability for extended operations.
“There are 18-wheelers that go millions of miles on the road,” Thiyagarajan explained. “To them, fuel efficiency is the important thing, more so than say a mining operator, who is more interested in the engine being able to run longer at one time. So we tailor it.”
On any given day, the main factory floor in Mineral Point will manufacture about 1,000 units of different sizes, Thiyagarajan said, with around 400 product variations possible on the on-highway side alone.
Like the new facility, the factory floor in the main building also has laser welders, plus large capacity flow-through curing ovens and production cells for catalyst and filter packaging.
Systems made here are typically smaller, including all on-highway production and off-highway production for engines below 19 liters, which is the high horsepower threshold.
For comparison, engines in 18-wheelers are 15 liters, with 6-liter engines found in Dodge Ram passenger trucks and engines smaller than that in construction equipment such as front loaders, Thiyagarajan said.
For the new Mineral Point facility, the company made a major investment, Thiyagarajan said, starting with a top-to-bottom renovation last year, after the building was purchased from the owner of an adjacent property.
Built around 1965, it had been vacant in recent years and didn’t have a sub-floor suitable for supporting heavy manufacturing equipment. So that was replaced, along with the roof and the building’s outside facade.
The floor also needed to be designed and equipped to accommodate the production of “huge pieces,” Thiyagarajan said, close to the length of a conference room table, for emission control on the biggest off-highway engines, such as those in farm combines or powering oil and gas drilling equipment.
“Everything is brand new, and it’s state-of-the-art equipment, too,” he said. “We pride ourselves in putting together a very world class welding facility, with real good weld ventilation systems.”
Cummins’ increased focus on emission control through the Mineral Point expansion also may be strategic. In the first quarter of this year, financial records for the publicly traded company showed sales of emission control systems posted a 36 percent year-over-year rise to $543 million, putting it among Cummins’ most lucrative lines of business.
Company officials wouldn’t specifically detail their forecast for 40 percent growth between now and next year in the high horsepower off-highway market, such as which sectors of it are projected to expand and why — global mining, for instance, has been in decline. But they said it generally had to do with the recovering economy and stricter emissions rules.
“Increasingly stringent emissions regulations in off-highway markets will contribute to the growth of our (emission control) business over time,” Williams said. “We are investing now to be ready for future regulations, which vary by country and end market. Our investments and our capability position us to benefit from those stringent regulations.”
Overall in the first quarter, Cummins Inc. saw a 12-percent year-over-year increase in sales to $4.4 billion, with a 20 percent net income gain of $338 million, compared with $282 million in the first three months of last year.
Much of that growth was driven by stronger North American on-highway demand for products, offsetting flat international sales.
Cummins Inc. also is forecasting overall revenues to grow between 6 percent and 10 percent by year’s end. If accurate, that would be a turnaround from recent years, which saw net income drop 20 percent from 2011 to 2013, or from $1.85 billion on sales of $18 billion to $1.48 billion on $17.3 billion in sales.