President's visit may illustrate biofuels, export messages

The quiet Cedar Rapids company President Obama plans to visit Wednesday has a significant role in the export and renewable energy markets the president seeks to promote.

Conveyor Engineering & Manufacturing manufactures stainless steel screw-type conveyors that are used in many ethanol plants, food processing plants, and meat packing plants. The company also makes screw conveyors used in chemical plants and grain handling facilities.

The company's Cedar Rapids backyard is one of its best markets - with customers like General Mills, Archer Daniels Midland, Cargill and Penford Products Company.

President Obama's has pledged to double exports by 2015 and his first re-election campaign commercial touts the creation of 2.7 million renewable energy jobs, a claim that some have already challenged.

Penford Operations Director Erwin Froehlich admitted he was a little surprised to hear the President was visiting Conveyor Engineering, even though it's Penford's primary supplier of screw conveyors for its corn processing and starch manufacturing facility.

"We use them because, number one, they are local, number two, they are price competitive, and number three, their service and responsiveness is excellent," Froehlich said.

The kind of ethanol wet mill Penford operates does not require screw conveyors, Froehlich said, although ethanol dry mills, such as the one Archer Daniels Midland operates in Cedar Rapids, does.

The construction of new ethanol plants opening in Iowa has slowed to about one this year, according to Monte Shaw of the Iowa Renewable Fuels Association, however capacity expansions at existing ethanol plants are equal to about one 100 million-gallon-per-year plant.

Conveyor Engineering serves many of the same companies as Divine Engineering, a Cedar Rapids company that makes chain and flat drag conveyor systems.

"It's a unique field," said Paul Hills, vice president of Divine. "There just aren't many custom conveyor manufacturers out there."

Divine's own conveyor business has been strong in Cedar Rapids for the last several years, due in part to the expansion of the ethanol industry, Hills said.

"We went through close to a two-year streak of working solid overtime," Hills said. The overtime has gone away and the ethanol and biodiesel demand for conveyors has slowed recently with a cooling of the biodiesel expansion, Hills said, but Divine remains a busy place.

Hills said many U.S. food and agribusiness industries have overseas operations, and prefer to use the U.S. conveyor manufacturers that have successfully equipped their domestic operations to serve their locations overseas. As a result, he said, the export market has been good.

Conveyor Engineering and Divine Engineering have at times split shipping containers to send conveyor equipment to the same overseas plants.

Conveyor Engineering & Manufacturing was begun 35 years ago in a small shop outside the then-tiny town of Shueyville south of Cedar Rapids by Joe Cone. His son, Graig Cone, now leads the company.

Graig Cone told SourceMedia that the company's employment peaked at about 100 and declined to about 85 as the economy cooled. He said it's slowly moving back upward.

Alan Merta of the Cedar Rapids Area Metro Economic Alliance said the company hasn't had any economic development incentives through the agency even though an effort was made to put some together when the company expanded to a new plant at 1345 76th Ave. SW, not far from The Eastern Iowa Airport, about five years ago.

Merta, who oversees finances for the agency, said the expansion was from a relatively small plant to over 100,000 square feet. Although the company uses high-tech tools such as a plasma cutter, he said Conveyor Engineering also uses "old line" skills such as welding, grinding and metal bending in a very precise way.

The plant's location only a mile or two from The Eastern Iowa Airport couldn't have hurt Conveyor Engineering & Manufacturing's chances as a presidential visit site, given the immense security requirements.

It also may be a plus that the Cedar Rapids metro area has been one of the brighter spots in a relatively drab economy, with an unemployment rate that averaged 6 percent in 2011, and declined from 6.8 percent to 6 percent over the course of the year.

The food processing industry in Cedar Rapids served by companies like Conveyor Engineering & Manufacturing has been one of the rocks of the local economy through the downturn, seeing little downturn.