Pittsburgh-Area Companies Dip Into Boat-Building Waters

Pittsburgh Business Times
13 January 2012
By Anya Litvak, Reporter

Campbell Transportation Co. Inc., which operates the region’s largest fleet of towboats, has plunged into the boat-building business, capitalizing on increasing demand for new vessels.

Campbell has been rehabbing vessels for years at its Dunlevy facility, but this is the company’s first stab at new construction.

In Elizabeth, Blank Welding & Blank River Services Inc. also is getting into new vessel construction for the first time.

At the root of this increased demand for vessels is a retiring fleet built during the 1970s and early 1980s, when government incentives spurred boat manufacturing, according to James McCarville, executive director of the Port of Pittsburgh Commission.

There also is a shortage of vessels regionally, as more and more travel to large coastal ports to deliver coal shipments for international dispatch, he said.

“Customers have told us that it’s difficult to arrange for vessels and barges to move their cargo,” McCarville said. “We’ve got a vested interest in seeing that stock get rebuilt and refurbished.”

An additional impetus for Campbell came from the American Recovery and Reinvestment Act, according to Peter Stephaich, chairman and CEO.

“We were, quote unquote, stimulated,” Stephaich said. “It actually worked.”

Campbell received a grant of about $365,000 and contributed about $150,000 to purchase equipment for its new fabrication shop. It also added about 10 employees last year to run the facility.

The company’s first two vessels — both harbor tugboats that will retail for about $2 million each — are expected to be ready this spring, Stephaich said. Campbell will keep one of the boats for its own fleet and is shopping the other to prospective buyers.

Meanwhile, Blank Welding & Blank River Services Inc. is in the process of buying a seven-acre parcel of land next to its current operation and converting the buildings into a boat fabrication facility, a $1 million effort.

Owner Richard Blank said he’s hoping to close the deal within the next six months and start manufacturing there next year, which will require him to hire about 10 new employees.

“Our plans are to build the boat, use it, put a for-sale sign on it, and, once it sells, build another boat,” he said.

The vessel also will be available for leasing, he said.

Blank decided to get into the boat-building game because of an increase in demand for vessels with 2,000 horsepower or more, which can push more and heavier barges.

In addition to the growing demand for new vessels, there’s also been an uptick in barge production, McCarville said.

Brownsville Marine Products LLC has ramped up production on increased orders from customers for the next two years, according to Mike Hennessey, vice president of sales. The company plans to churn out 165 barges in 2012 and 180 in 2013, up from double digits just three years ago.

Increased coal exports, the anticipated widening of the Panama Canal and tax incentives, such as 100 percent bonus depreciation, drove the increase, he said.

Both Campbell and Blank also build and rehab barges. In fact, new barge construction is another new business venture for both companies.

Campbell is manufacturing its first two new barges in West Virginia, Stephaich said. Blank said his company has orders for 10 new barges in the next five years.

Anya Litvak covers energy, transportation, gaming and accounting. Contact her at alitvak@bizjournals.com or (412) 208-3824.