YOUNGSTOWN - When local machine fabricator Brilex Industries purchased a vacant industrial building with plans to expand its business, it may not have realized the site was already being considered by Houston-based Valerus, also exploring a local expansion.
Wednesday, a ribbon was cut inside the renovated building at 101 Andrews Ave., now home to an industrial partnership between the two companies for the manufacture of oil and gas processing equipment.
Some might describe the new partnership as kismet. Others would say it's simply the result of good economic development efforts by the Regional Chamber.
Ultimately, though, 30 local residents soon will be calling it full-time employment.
"We signed the joint venture late last year, and we are currently on our plan to where we want to be," said Nick Sajatovic, Valerus senior vice president of manufacturing and supply chain.
The plan to begin local manufacture of equipment needed to process oil and gas produced from the nearby Utica and Marcellus shale plays greatly reduces shipping costs, but Valerus' plan goes deeper than that.
Tribune Chronicle / Brenda Linert
Tanks that will be used by Valerus to filter oil and gas products sit outside Brilex’s renovated building in Youngstown.
"Our real desire was to become locals," said Valerus Chief Executive Officer Peter Lane. That means using local labor and local suppliers whenever possible.
For Youngstown, the partnership contributed to the $1.5 million investment to renovate the industrial site described by one Chamber official as "in poor condition." And it means creation of at least 30 more new jobs in the burgeoning oil and natural gas industry, 10 of which have already been filled.
That number could go higher if the industry supports it.
"The expansion activity is going to drive hiring. The business plan is to expand," Brilex president Brian Benyo said.
The positions, he said, will be in areas of fabrication, pipe fitting, welding and mechanical assembly. Twenty more hires are expected by the middle of next year.
"We came to Youngstown in 1996 with about 15 people, and we are at about 250," said Brilex Vice President Alex Benyo. "We are very excited to see what this joint venture is going to grow into."
Brilex is building about 10 different Valerus products, largely for use in the Marcellus and Utica shale plays, but Valerus officials said that could be expanded for use in other shale plays like North Dakota's Bakken as demand necessitates.
"As time goes and as the capacity increases and as the market matures, we will add more products to that list," said Bill Bowers, Valerus vice president of production equipment.
Bowers explained the company's link to the oil and gas drilling business is all above ground.
"We don't drill wells, but once the well is completed and ready to produce, it's going to produce some combination of gas, oil and water. We produce equipment that will process the hydrocarbons," Bowers said. That means separating the products and filtering them for things like solids, gas and dust in preparing to send the products to pipelines and market.
Sarah Boyarko, Regional Chamber vice president of economic development, business retention and expansion, helped coordinate the partnership after meeting Valerus officials on visits to Texas in attempts to attract oil and gas companies to northeast Ohio.
"They wanted to hire locally, use local suppliers and give back to the community. That was really important to them. Brilex is an amazing business in our community. They are a perfect company to partner with because they are a local business that cares about their employees," she said.
Boyarko also was the person who initially led Valerus to the building eventually purchased by Brilex.
"It was on the market for lease, and it really was in poor condition. There were dirt floors, it was very dark and dingy," Boyarko said. "Brilex really invested a great deal of money into the floor, paint, maintenance of cranes."
"I think the opportunities for the future are really exciting," she said, noting that there are $749 million in pending investments in the area. About half of those are oil and gas related.
"I am often asked, 'what's next?'" said Regional Chamber president and CEO Tom Humphries. "I can tell you there is something next."