Central Oregon natives to launch Krah USA business on the City of Prineville Railway
Mark Theetge, the President, Chief Sales Officer and Co- Managing Member, will direct the National Sales efforts for Krah USA. With his 30 years of experience in the HDPE market sales. He specialized in product development with specific experience in large diameter HDPE piping products. He is technically proficient with project management skills to bring a project through to successful completion. He started as an HDPE field technician in the late ‘80s. With this hands-on experience, he developed a full range of technical aspects of fabrication and Fusion Technician. Mark is a trusted leader with proven sales management, pricing, accounting, planning, project execution, negotiations, and team development. Mark previously developed and managed a West Coast Sales Territory, increasing project revenue from $14 million to $21 million. Because of his 30-year industry involvement, Mark has the ground-level experience, depth and breadth, and knowledge regarding the competition. He has leadership experience with developing people in sales management/product specialist roles, working with both product sales representatives and direct employees. He is experienced in training and educating at all levels in the field, including engineers, district managers, municipality and city managers, farmers, etc. For years, Mark’s vision has been to bring the large diameter HDPE Krah pipe technology to the United States, researching and following their footprint internationally for the past 15 years. Mark truly saw the unique and value-added quality in something different and special with this product. Mark is always trying to figure out how to improve things, and this has been his dream in this field, to make products better by bringing something here that is progressive, stronger, more efficient, and truly state of the art. Mark Theetge, Krah USA President/CSO stated: „I’ve been trying to bring the Krah technology to America for 18 years. I’m extremly proud to be able to take this effort to fruition and be part of the Krah family. Alexander Krah, CEO and Owner of the Krah Group and Bülent Kuzkaya, Business Development Director of Krah Advanced Technologies GmbH, have been extremely supportive and helpful through this process.“ After a 3-year analysis and planning process, Krah USA LLC was formed in 2019 by Mark Theetge, President/CSO, fully supported through a partnership with KHB GmbH (Krah Germany) and by the Medalist Partners LP.
“Medalist Partners is excited to be partnering with Krah USA LLC. With the implementation of exclusive technology, Krah USA intends to assist in modernizing existing infrastructure relating to agricultural irrigation, municipalities, and other important sectors of the economy through their facility in Prineville,” said Greg Richter, CEO of Medalist Partners LP.
Bülent Kuzkaya and President Mark Theetge signing the documents
Why a plastic pipe manufacturing plant in Central Oregon?
Krah USA is poised to break new ground in social enterprise, conservation and economic development due to the opportunity to be the exclusive manufacturer of Krah process pipe in the Western United States, and the nearly boundless need in Oregon and throughout the West for irrigation modernization and infrastructure upgrades. More than 1,000,000 diversions In the Western United States deliver 80% of surface water to irrigated agriculture. These systems are 100-years-old, lose between 30-70% of water, have extensive water quality issues, and use a significant amount of energy for water delivery. Modernizing these systems is one of the greatest agricultural security and environmental benefit projects in the Western United States. Based on increasing district, private, and government investments into modernization, Krah USA LLC was formed to manufacture high density polyethylene (HDPE) pipe. Senior management of Krah USA have worked with irrigation districts and municipalities for the last 30+ years, and have identified a significant need for a regional piping facility to reduce piping cost, increase supply, and accelerate modernization efforts.
US Government project financing is secured for local irrigation districts and irrigation piping investments that are projected for the next ten years. The need for a regional Krah HDPE pipe manufacturing facility is real: • Due to tariffs, there has been significant price increases for large diameter steel
• Current piping manufacturers production in the West US is limited and production lines can be booked up limiting supply availiability
• Long-distance shipping adding 25-30% on large diameter pipe to total project price
• There is no large diameter high-pressure HDPE pipe available in the United States Krah Pipes of Germany has developed technology over the last 40 years to manufacture large-diameter high pressure HDPE pipe. Until recently in the US, it was only available in steel, concrete and sometimes fiberglass. Krah USA is currently working in tandem with the Krah Group, and Krah Advanced Technologies GmbH. They are offering their areas of expertise to ensure that Krah USA has the resources it needs to be successful. The City of Prineville Railway Depot facility has been selected as the headquarters for the pipe manufacturing plant and it is currently under design and construction. Krah USA has leased the largest building (64,000 sf) at the Depot. The plant is scheduled to start production in December. Krah USA will produce several products including the proprietary large-diameter, high pressure Krah HDPE pipe, a variety of sizes of Solid Wall HDPE pipe, manholes, fittings and fixtures.
“We are excited because we get a lease payment, a partner at the Depot. The majority of, if not all of the pellets, used to make the pipe come in from Canada or Texas,” states Matt Wiederholt, General Manager of the Railroad Depot. Krah USA’s first expansion of two production lines will most likely occur June of 2021. We anticipate adding a solar array within two years of operation to bring the plant to a „net zero“ in energy operations. We have a great partnership with the City of Prineville that ensures the headquarters plant‘s longevity for years to come.
Installing the new Krah machine via Virtual Assistance in Oregon
What was your main motivation to invest in Krah technology in terms of the market in the USA?
Krah USA was established to manufacture high density polyethylene (HDPE) pipe, with a focus on the largest diameter pipe (48”-196”) that can handle high pressure applications. This product is not currently available in the United States. It has a vast potential market, including the Western United States irrigation districts facing urgent irrigation system modernization needs, and municipalities that must replace aging water delivery and wastewater treatment infrastructure and other uses.
This plant is in response to two opportunities that have converged, putting Oregon in position to become a field leader at the intersection of agriculture, conservation, social enterprise and rural economic development. The first is an agreement in principle with Krah Pipes to give Krah USA exclusive rights to their advanced German manufacturing technique for large-diameter HDPE pipe, covering several Western states. The second is the opportunity to lease with an option to purchase the City of Prineville Railroad Depot property, which was move-in ready, and install the pipe plant in an existing building in Prineville, Oregon as the manufacturing site, with an adjacent separate office building, and has multiple railroad spurs on the property.
What is Krah USA offering to the market in the USA?
For the first time in the USA, Krah USA will be offering large diameter pipe. Also, shipping charges to the West will be reduced by 80%. One stick of medium size pipe costs $4,000 to $7,000 to ship to the Western United States. We can reduce that cost significantly, and eliminate it for the State of Oregon. Thus, offering significant savings that the client can use to purchase more pipe and complete more projects. Due to lumber mills closing, plants moving out of rural america, and COVID layoffs, we can offer immediate jobs to people who need them. Krah is in process of working with many local hiring venues to offer well-paying, long-term skilled jobs in rural Oregon, and is entertaining resumes for plant managers, production staff, yard workers, administrative and sales professionals.
„This year Krah USA has already met our goal of hiring 14 employees by the end of 2020, with plans to expand to 20 in year two and 30 in year three. The local community, livability of the area, lower cost of living, and recreation opportunities are attractive to recruiting employees.“, stated Mark Theetge, President. A year-long study was conducted on land availability according to the needs of the new plant. After completing due diligence reviewing 10 Central Oregon local sites from Bend to Madras, the City of Prineville Railroad Depot Property was chosen as most compatible to our 22 listed requirements, including an existing and available large scale building, expansion capabilities, loading rail dock and a separate office space among other amenities. The availability of the Railway was extremely important and was a key factor in selecting the facility. Krah USA will be receiving goods and shipping via rail from the Depot. This facility supports the current Administration‘s efforts and Congress‘ efforts to bring manufacturing back to the United States and Rural America. Prineville is the perfect venue for our headquarters pipe manufacturing plant. A plant in Central Oregon is ideally located to efficiently and cost effectively deliver pipe throughout the Western states. As a former lumber mill, the City of Prineville Railroad Depot facility has multiple railroad spurs on the property, offers buildings to expand into, and is within 100 miles of key projects slated over the next few years. This was echoed in the message to the Prineville City Council:
“City Council, Matt and I wanted to provide a quick update on the City of Prineville Railroad. This past Friday, we did receive signatures on a lease with KRAH USA for one of our buildings at the freight depot. We have been working with KRAH USA since summer of 2019. KRAH USA is a pipe manufacturing business that is planning on participating in supplying high density plastic pipe for the irrigation piping projects in Central Oregon, as well as all the Western states. This project is expected to bring jobs to our community and a significant amount of inbound rail freight to our Railroad, with potential for some outbound freight in the future.” - Steve Forrester, Prineville City Manager-Matt Wiederholt, Railway General Manager.
As you know Europe has 30 factories for helical wound pipes and the demand is growing. How do you see this development applicable for the USA?
Krah USA is currently working in tandem with the Krah Group, and Krah Advanced Technologies GmbH, who are offering their areas of expertise to ensure that Krah USA has the resources it needs to be successful. The Krah Family of Companies are bonded through the common goal of producing quality helical wound pipe for their clientele worldwide. What are the most convenient and important argues to choose Krah pipes and technology?
The Krah pipe is a high-performance plastic pipe production technology. Choosing the Krah technology has many advantages. It has high fexibility, low internal roughness, high abrasion resistance, and high chemical resistance. It is efficient in installation, increasing speed and lowering effort. It provides custom stiffness and custom joining systems. The electrofusion welding process eliminates the need for a massive welding machine that requires manual hand welding inside the pipe. It has no welding seams or any weak points, thus it is leak free. The bright color of the inner surface allows for easier pipeinspection; and, when used for culverts, attracts fish for a friendlier transfer in rivers. For clientele, It reduces piping cost, increases supply, and accelerates modernization efforts. The Krah pipe is virtually industrucable. And, most importantly, it can provide a 100+ year shelf life. „Krah USA believes the Krah pipe technology should be the only choice for pipe installation due to the numerous benefits and 100 year life span.“, states Mark Theege, President.
The Krah plant in Oregon
How will the climate change affect the pipe market in the USA?
Speaking of dry soil, flooding etc..As climate change and drought continue to affect all the States in the US, the need for water conservation becomes increasingly important and essential. The 17 reclamation States in West have thousands of miles of earthen canals that can leak between 20% and 80%. The loss of this water, combined with the dwindling snowpack, decreases the water supply. Thus, increasing the demand to pipe these areas in order to eliminate seepage and evaporation.
In terms of recycling and environmental protection, what are your goals?
Strategy and Sustainability – Krah USA works to deliver products that improve lives while striving to meet social and environmental goals. This production plant will be a model for environmental sustainability. Krah USA will be installing a 10-acre renewable solar array to offset energy use and sell power back to Pacific Power, the local utility company, in 2022 with a goal becoming carbon neutral quickly. Water use will be minimal as we will recycle the water used by the machines. HDPE pipe is made from a petroleum by-product, as well as a natural gas by-product (ethylene), turning an energy production waste product into goods that benefit the environment. HDPE Pipe is environmentally friendly and is 100% recyclable. Also, HDPE has a shelf life of 100+ years. Krah USA will support irrigation district’s dual mission of creating agricultural resiliency through irrigation modernization and investing in rural agriculture and economies. Other markets include transportation, landfills, oil & gas, municipalities, industrial and on-farm projects across the US. „Environmental, social and governance (ESG) factors are increasingly being used by investors looking to assess companies‘ sustainability and risk profile. Krah USA recognizes that an ESG policy is imperitive to our business. Global demand for energy and stakeholder expectations for a lower-carbon future has never been higher. Our sustainability commitment is strong while we develop our processes“, states Mark Theetge, President.
Pillar 1 - Environmental
The environmental pillar measures a company’s impact on living and non-living natural systems, including the air, land and water, as well as complete ecosystems. It reflects how well a company uses best management practices to avoid environmental risks and capitalize on environmental opportunities in order to generate long term shareholder value.
Pillar 2 - Social
The social pillar measures a company’s capacity to generate trust and loyalty with its workforce, customers and society, through its use of best management practices. It reflects the company’s reputation and the health of its license to operate, which are key factors in determining its ability to generate long term shareholder value.
Pillar 3 - Governance
The corporate governance pillar measures a company’s systems and processes, which ensure that its board members and executives act in its long term shareholder‘s best interests. It reflects a company’s capacity, through its use of best management practices, to direct and control its rights and responsibilities through the creation of incentives and checks and balances in order to generate long term shareholder value.
Krah USA is acutely focused on sustainability and resource use. We are initiating innovative and ongoing actions to advance environmental performance. We are lowering carbon intensity and increasing the use of renewables in our operations while investing in breakthrough technologies. Our plant uses less water, and most of it can be recycled through the manufacturing process. The saw oil that we will be using is water- soluble versus vegetable or motor oil. This ensures when working in stream installations, fish and wildlife will be protected. The pellets we use are a petroleum by-product, as well as a natural gas (ethylene) by-product, which are melted and made into transmission pipe. This High Density Propolyene Pipe (HDPE) is recyclable and reuseable. It can be ground up and made into additional pipe products.
Krah USA’s high strength thermoplastic offerings are increasingly viewed across the construction, agriculture, and infrastructure industries as a superior alternative to concrete, steel, and PVC products. They are 3 times faster to install and significantly less expensive on an installed basis than products manufactured using traditional materials. Demand for Krah USA’s thermoplastic corrugated pipe, related storm water management and drainage products and septic solutions are being driven by a material conversion trend across many industries. Local and Federal regulators are increasingly seeking more cost effective and environmentally friendly solutions for construction and agriculture applications, which plays directly into the hands of Krah USA’s sustainability focused manufacturing process and product portfolio.These efforts have driven significant share gains for corrugated high-density polyethylene (HDPE) and polypropylene (PP) pipe from 10% of the storm sewer market in 2000 to 32% in 2018. Plastic leach field, plastic septic tanks, and manhole covers, have also experienced significant penetration gains from 44% in 2005 to 61% in 2018 and from 15% in 2008 to 24% in 2018, respectively. For example: Preventable irrigation canal losses account for an estimated quarter of food waste, much of it happening between harvest and sale. HDPE pipe allows farmers to pressurize their water delivery systems. Through these irrigation modernization techniques, canals are piped, eliminating water seepage and enhancing safety to the community. Electricity to deliver water is reduced or eliminated, water is conserved through targeted and predicted usage and eliminating evaporation, and fish and wildlife are saved – all while giving water back to the streams and rivers. Flexible pipes can react to changes in their environment, such as seismic events. Flexible pipes still work when other rigid pipe systems already show damages such as breaks or cracks, i.e., as opposed to steel (which rusts) or concrete (which cracks and is supported by rebar which rusts and can only be added to the landfill) - both of which has an anticipated shelf life of 20-50 years. HDPE has a shelf life of over 100 years saving cost of replacing traditional material 2-4 times over. Krah Pipes are made from HD-PE100 (acc. to DIN16961, EN13476, ASTM F894, ISO9969 and other international standards) are produced with an integrated electro fusion joint socket and spigot. The pipe is completely helically extruded with profiles or solid wall, tailor made for any kind of application within the standards. The pipes have no welding seams or any weak points and are completely monolithic made from high density PE100. There is no recycled mixed material used in the Krah pipes, ensuring excellent quality of pipes with a service cycle of minimum 100 years.
Krah USA is committed to bringing manufacturing back to local and rural communities. Our first plant in Prineville, Oregon will replace lost jobs and manufacturing in logging, mills, and rubber materials. Other plants as expansions are secured will mirror being a good steward – of community, land, resources, recycling, workforce development and health and safety. Krah USA is a member of the Oregon Water Resources Congress and Family Farm Alliance, both of which work to preserve water, agriculture and understanding of the challenges facing manufacturers and farmers in the Western US. Krah USA has already reached out to support the local Chamber of Commerce and Central Oregon Economic Development Council. Business Oregon has been integral in supporting this new endeavor. Krah USA supports upward mobility and job training and progression for all employees. We respect diversity and equal opportunities in our workforce. Safety is paramount in our facility and our safety program reflects our consistent monitoring of health and safety compliance on a daily basis for our employees and customer base. Our partnership with the Krah Family of Companies is a testiment of the trust we build with our suppliers, partners, investors and employees.
Good corporate governance promotes good business. Krah recognizes commitment and effectiveness towards following best practice corporate governance principles with the highest standards of business ethics.
Mark Theetge, Krah USA