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Flowline Alaska of Fairbanks.

Flowline Alaska of Fairbanks This Interior insulating firm has captured a share of the North Slope's pipe coating trade.

WRAP A LITTLE FIBER-glass and some heat tape around your water pipes, and you call that insulating. Imagine an automated system that insulates pipe from 2 to 60 inches in diameter and 20 to 80 feet in length. Such wraps are the specialty of Flowline Alaska, a Fairbanks-based company serving the petroleum industry.

Pipe is heated, cleaned, insulated with urethane and wrapped in galvanized steel in an operation that is ingenious, efficient and profitable. Rick Schok, the firm's founder, formerly served as vice president of North American operations for H.C. Price. Price was the largest pipe coating firm in the world with operations in the United States and abroad when it was purchased by a Dutch firm and renamed Bredero-Price. (Since then, it's changed hands again and operates as Energy Coatings, a division of Lukens Steel.)

Schok came to Alaska in the 1970s to open Price's pipe coating plant on the North Slope. Seeing no future with Price, he left the company, located an investor in Tulsa, Okla., and set up a pipe coating plant of his own in Fairbanks in 1982.

He acquired a urethane plant formerly occupied by Upjohn and expanded it into an automated pipe coating plant. Schok says his physical plant is worth about $2 million, but adds, "It isn't worth a nickel if no one wants to buy it!"

Also chairman of the board of Denali State Bank, Flowline's owner says running his business takes up most of his time and requires a great deal of attention, keeping him from involvement in other community activities. His business dealings frequently find him more in contact with companies in Los Angeles, Tulsa and Dallas than with those in Fairbanks.

Says Schok, "I think Chamber of Commerce-type organizations try to help the economic development of their community. Hopefully that is one of the things Flowline is doing."

Because his business is construction-related and work often is sporadic, his employee base varies. In December, between 30 and 35 workers were on the payroll. Schok says the company has never operated more than nine months out of the year. "Our employees like that, because we operate mostly in the winter, and they can get summers off or find seasonal construction-related jobs."

Schok believes Flowline enjoys competitive advantages as an Alaskan firm, "not from political considerations, but because we live here and probably know the market much better and understand customers needs." Even so, he says these days there's barely enough work to support one competitor, let alone two.

Flowline recently landed a pipe coating contract worth $6 million, part of a $450 million gas-handling expansion program underway on the North Slope. Before the contract was deemed viable, however, Flowline needed a little help from at least one legislator and the Alaska Department of Transportation & Public Safety.

The contract called for insulation of 60-inch pipe, which Flowline intended to treat in Fairbanks and then haul to the North Slope by truck. A trailer loaded with two sections of coated pipe, side-by-side, exceeds state regulations for width but not for weight. State regulations don't permit overwide loads if the materials can be loaded in a manner that does not exceed the limit.

Explains Schok, "By regulation the pipe could be sent north one section at a time and fall within the width requirements, but not two sections loaded side-by-side, which would be more economical but exceed the width, while still falling within the weight requirements."

Ken Fanning, former Fairbanks state senator, intervened to overcome the regulatory obstacle. Previously, Fanning moved a cabin from Fairbanks to Harding Lake, about 50 miles down the Richardson Highway.

"I called the state Department of Transportation one evening after hours and got a recording that gave me an 800-number. I called that number and someone there got all the pertinent data from me and Faxed a permit to me, and I was on my way," says Fanning. "We moved the house down a pretty busy section of highway on a Friday afternoon-no problem, no hazards."

According to Fanning, all it took to get Flowline's waiver was "a little show-boating to get things off dead center." He explained his prior experience to the local paper to demonstrate how easily a bureaucracy could work. Flowline got the permit.

Says Fanning, "It really came down to this: We were either going to hire Alaskans and have a local firm do this (pipe coating), or it was going to go to a firm that would have to open up a mothballed plant and bring in outsiders to run it."

When starting Flowline, Schok sought financing from First National Bank, where his banker was Bill Allen, former Fairbanks mayor. Allen says the company is one of his favorite success stories. "It's one of those businesses that takes various materials and manufactures a value-added product. That's significant for Fairbanks," he notes.

"When he (Schok) first talked about starting a plant, we weren't too interested until he started talking about Fairbanks as the location. Then we got excited, because he wanted to bring his family here, hire a lot of people and be involved in our community," Allen recalls.

He says his strongest memory of the deal is Schok's reputation for integrity. "When it comes right down to it, a business deal can rise or fall based on the character of the people involved. We had no doubt this was going to be a solid investment."

Adds Allen, "Everyone performed as expected. Rick's not afraid to roll up his sleeves, and it's amazing how lucky you can get when you're willing to work hard."

PHOTO : Flowline Alaska workers insulate large-diameter pipe for use in North Slope oil fields.

PHOTO : Rick Schok founded an Alaskan firm to compete in the pipe coating trade in 1982. He says

PHOTO : these days there's barely enough work to keep him and his competitor in business.
COPYRIGHT 1989 Alaska Business Publishing Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

Article Details
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Author:Deisher, Philip
Publication:Alaska Business Monthly
Article Type:company profile
Date:Feb 1, 1989
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