(The following story by Joyce Gannon appeared on the Pittsburgh Post-Gazette website on November 9.)
PITTSBURGH, Pa. — Randall Dearth would like nothing more than to announce that Lanxess Corp. has plans to build a new production facility in southwestern Pennsylvania.
But that’s unlikely to happen, the president and chief executive of the Findlay chemicals company said yesterday, as long as China, India and locations in South America can offer lower production costs and better-educated workers.
“The chemicals industry is going through a tremendous change. We’ve lost jobs and it’s more difficult to compete as a manufacturer,” said Mr. Dearth who spearheaded a summit for today in Pittsburgh where chemicals industry executives can express their concerns to government officials.
Specifically, those concerns include escalating energy prices, declining rail service, plant security and product regulation.
Other chemical companies expected to attend the event include Bayer Corp., Nova Chemicals, PPG Industries, BASF and Goldschmidt Industrial.
The state’s congressional delegation including U.S. Sens. Arlen Specter and Robert Casey and Reps. Jason Altmire, Mike Doyle and Tim Murphy are expected to send representatives to the event at the Regional Enterprise Tower, Downtown.
The chemical industry employs about 9,000 workers in the Pittsburgh region, said Mr. Dearth, whose German-based company has 400 employees here. Lanxess’ U.S. operations have been based here since it spun out of Bayer in 2005. Bayer maintains its North American headquarters in Robinson, Canada-based Nova’s executive operations center is in Moon, and PPG is based Downtown.
“The industry is really alive and well here,” said Mr. Dearth, who proposed the summit after making the rounds of local congressional delegates this past summer in Washington, D.C.
“The common theme was that [Lanxess’] issues were the same as other chemical companies. I thought it was a great idea to get around the table and talk … to set the stage about how important the industry is to southwestern Pennsylvania.”
The top problem facing the industry, he said, is the cost of natural gas, which not only fuels chemical plants but is used as a raw material in its products. “There’s not enough of it … and the U.S. has the highest prices in the world.”
Among the solutions Mr. Dearth proposes is opening up more natural gas sources where drilling is restricted, such as the outer-continental shelf that includes submerged lands off the coasts of Florida and Louisiana.
Rail service is a problem, he said, because the lack of competition among freight providers results in limited service and high prices for shipping chemicals products. “We want to use rail as much as we can and limit the amount of chemicals transported by highway.”
Industry growth in the United States also is hampered by a lack of students graduating from college with engineering or science degrees, he said.
He estimated that about 30 percent of U.S. college students graduate annually with such degrees, compared with 59 percent in China and 66 percent in Japan.
He fears that about half of all chemists and engineers working in the United States now will retire in the next decade and that qualified replacements won’t be available. “If I’m faced with the issue of not enough employees in 20 years, how we are preparing the kids now is an issue.”
Though it’s not on today’s agenda, the lack of international air transportation from Pittsburgh is definitely a concern for Mr. Dearth and other chemical industry executives based here.
As a member of the Allegheny Conference on Community Development, he is aware of efforts to lure more overseas flights here but declined to detail them. “I’m very optimistic that we’re moving in the right direction and something will happen.”