Sugar beet equipment manufacturer finds sweet success making wind towers

Rolls with the changes

January 1, 2010

Since its founding in 1978 in West Fargo, N.D., DMI Industries has survived turbulent economic fluctuations—and grown—by rolling with the changes. Literally. The company built sugar beet processing and handling equipment using plate rolling and other equipment. The astute manufacturer then redirected its operations to respond to the booming wind energy sector and has become a premier wind tower manufacturer in North America.

If an image is not displayed, click the hyperlinked figure number to view it.

Editor’s Note: For a look at how DMI Industries fabricates a wind tower, click here.

Since its founding in 1978 in West Fargo, N.D., DMI Industries has survived turbulent economic fluctuations—and grown—by rolling with the changes. Literally.

Responding to boom demand in the Dakotas sugar beet industry from 1987 through 1998, the company—originally named Dakota Machine Tool Co.— built sugar beet processing and handling equipment using plate rolling machines and other equipment. The astute manufacturer then redirected its operations to respond to the booming wind energy sector and has become a premier wind tower manufacturer in North America. Its customers are primarily utility-scale wind turbine manufacturers.

The sugar beet processing equipment that DMI built included extraction and stacking equipment; storage towers for both liquid and pressurized storage; and evaporators used to receive and wash beets through final processing of the sugar, including third- and fourth-effect evaporators and crystallizers. They ranged in weight from 10 to 600 tons, in diameters from 13 to 32 feet, and in heights of up to 90 ft. The stacking equipment it manufactured supported remote site storage and the handling and stacking of beets at factories.

DMI recognized that it could apply much of the same capital equipment and competencies it had been using to manufacture large, heavy, tall vessels and equipment for the sugar beet industry to manufacture large, heavy, tall wind towers.

Opportunity Blowing in the Wind

"With the sugar beets boom nearing an end, a highly skilled work force, and large-scale capabilities unique to the region, we needed large-scale work for the shop, but there was not a lot of it in the area," explained DMI Industries President Stefan Nilsson.

At that time in 1999, the company was approached to bid on a job to fabricate 100 large steel frames the size of a car. The job appeared to be a good fit for DMI.

"Fortunately or unfortunately—depending on how you look at it—we were not competitive on that bid." Nilsson said. "However, we discovered in the process that these frames sat on top of a rather large structural steel tower, for a utility-scale wind turbine."

"The original plant in West Fargo didn't start out as a wind tower manufacturing plant, but it happened to be located very well for that," Nilsson added. "The rest is history."

Getting Second Wind. At that time European wind turbine manufacturers were working to establish their North American supply chains. DMI was in a favorable position to apply the processes it was already familiar with to manufacture sugar beet equipment to manufacturing wind towers.

Although the plate rolling, cutting, welding, and surface finishing operations required to produce wind towers are similar to those used to make sugar beet processing equipment, the work process had to be converted from batch processing to multiple-piece flow. Each stage of the operation—material handling, flame cutting of plate blanks, plate rolling, fit-up, seam and section welding, surface treatment, painting, and final assembly—is a separate but interdependent operation. The material flows through the process without batch storing, which requires equipment flexibility and proximity (see The Making of a DMI Wind Tower article).

"While we fulfilled orders for various turbine OEMs, we also put a great deal of time and resources into learning what we could about the future of wind energy and how we could fill the need for steel towers," added Nilsson. "We are now considered one of the most trusted partners in North American wind energy development and have fabricated towers for nearly every major wind turbine OEM in the world."

Wind Energy Picks up Speed. According to the American Wind Energy Association (AWEA), the U.S. wind energy industry shattered all previous records in 2008 increasing the nation's total wind power-generating capacity by 50 percent. In July 2008, the U.S. blew by Germany as the world's largest wind energy producer. The U.S. Department of Energy released a report projecting that the U.S. could produce 20 percent of its electricity from wind energy by 2030. Wind is considered by many to be the most commercially viable renewable-energy form right now.

That outlook makes wind energy an attractive proposition for manufacturers in other industry segments, such as automotive. However, they might be surprised at the volume disparity. Automotive components volumes may number in the millions annually, while tower production numbers in the hundreds.

Although DMI's managers look forward to the growth expected for wind energy, the company has experienced the peaks and valleys typical for this industry, whose production volume is largely tied to government policy and tax incentives, such as production tax credits (PTCs).

"The support of our parent company, Otter Tail Corporation, has been instrumental in our ability to weather these periods as we establish ourselves in a new industry," said Nilsson. "It afforded us the ability to ride out periods of lower demand and prepare for the next upturn."

Handling Transportation Dynamics

If the mountain won't come to you, you must go to the mountain, the saying goes. Considering how colossal wind towers can be—up to 100 meters tall, 16 ft. in diameter, and 300 tons one could be forgiven for not knowing which is the mountain—the towers or the wind. Alas, the wind won't come to the factory, so the towers must be transported from the factory to the wind. Because transportation costs and delivery are major considerations for customers, DMI made a key decision to add manufacturing facilities to improve market coverage.

Now a DMI facility is within competitive reach of wind farms in the North American wind corridor (see Figure 1). The company opened an 85,000-sq.-ft. facility in Fort Erie, Ont., in 2006, and a third, 285,000-sq.-ft. facility in Tulsa, Okla., in 2008. Between the three plants, the company has annual capacity to support up to 3,000 MW (3 gigawatts) of installed wind energy, the company said.

As the company dedicated production to building wind towers, it became apparent that it needed to add plant locations to hold down transportation costs. Nilsson said, "Early on we saw the need for additional plant locations close to wind project sites in order to assure competitive tower pricing for our customers."

Nilsson added that great care was taken to select manufacturing sites in strategic geographic locations, and where skilled production personnel could be found. "And that is one of our main competitive advantages today. We cover the Northeast/Great Lakes region and the wind corridor through central North America very well," Nilsson said.

Maintaining Consistency Within Variation

Each turbine manufacturer that enters the North American market requires a new tower design from the supply chain, Nilsson said. "The towers can be very different from each other. Each manufacturer has its own designs for the turbine models. This increases manufacturing complexity and leads to greater production mix," he said.

Therefore, wind towers must be fabricated to varying design specifications, meeting tolerances measured to the minutest detail, while being structurally sound to withstand the elements and harsh environmental conditions to which they are exposed.

"We have worked diligently to develop our own competency for handling varying designs. We review the tower designs, we validate them, and even do some test manufacturing before we put new designs into production," he said.

The company is careful to maintain consistency and control the variables from plant to plant, Nilsson said. "When we bring a design from one plant to another, we make sure that what we learn in one plant is carried to the next plant. We emphasize standardization in our manufacturing processes and equipment; in fact, we've used our expertise in equipment manufacturing to make our own custom machines to do just that," he said.

The Way the Wind Blows

Nilsson anticipates continued growth in the wind industry going forward and believes that the incentives in place for wind energy development through 2012 will increase demand for the industry. "Our expectation is that we will see an improvement in the market in 2010, with significant growth resuming in 2011," he said.

DMI's objective for the future is ambitious. "We plan to continue strengthening our position as a leading wind supplier in North America. Our vision is to become the supplier of choice for towers within the geographic proximity of our manufacturing facilities," Nilsson said.

"So early on we established how we differentiate ourselves to reach that goal. Our key strengths are the strategic locations of our three plants for supporting new wind projects, and that customers can work with one company to receive consistent, competitively priced, high-quality products for any site within our geographic reach," Nilsson said.

"As growth resumes and competition increases, we believe we are well-positioned as a supplier to the wind industry in North America," Nilsson said. "Yet we have learned to take nothing for granted."

DMI Industries Inc., 4445 Second Ave. S., Ste. 3, Fargo, ND 58103, 701-433-7150, pr@dmiindustries.com, www.dmiindustries.com