RSSHigh demand for baking soda drives company’s sales
Natural Soda Inc., a subsidiary of Natural Resources USA, is expanding its facility so it can double its production of baking soda in Rio Blanco County. The company is spending about $5 million this year as part of an expansion project that it hopes to complete by late 2012.
It fluffs up waffles, settles cattle’s stomachs and even was used to help spruce up the city of Dallas in preparation for this year’s Super Bowl.
Baking soda being solution-mined by Natural Soda Inc. from naturally occurring deposits called nahcolite in Rio Blanco County can be put to all kinds of uses. The problem for North America’s second-largest producer of what’s also known as sodium bicarbonate is processing enough of it to meet demand.
“Right now we are pretty much selling it as we are making it,” Carl Meyer, Natural Soda’s production superintendent, said as he finished leading a recent tour of the plant by showing where 50-pound bags get loaded on trucks for shipment.
The company’s salespeople “can sell as much as we can possibly make,” he said.
Hence, the ongoing effort by the company to double production capacity to 250,000 tons per year.
A new, high-efficiency boiler Natural Soda put in this year will boost capacity by 30,000 tons a year, producing twice the heating ability of two existing boilers and doing so with less air pollution. The company is spending $5 million this year on the boiler, a heat-transfer system and related infrastructure, and it plans next year to build a new processing plant at a cost of up to $34 million.
All in all, “It’s a very exciting time for us,” said Bob Warneke, the plant’s director of manufacturing.
Warneke said the plant underwent “a lot of ups and downs” when he worked there under previous ownership in the 1990s.
“We’ve been able to weather the storm out here,” he said.
In 2003, the plant was purchased by AmerAlia Inc. Its chief executive officer and chairman, Bill Gunn, is an Australian who has had an ownership interest in nahcolite leases in the area for decades. Last year AmerAlia changed its name to Natural Resources USA Corp. and became the 100 percent owner of Natural Soda Holdings, Inc., owner of the plant.
Natural Resources also posted about $22 million in sales, up almost 11 percent from the prior year, and earnings of $1.27 million, compared to a $5.86 million loss in 2009. Now, publicly traded Natural Resources says its majority owner, Canadian-based Green SEA Resources Inc., plans to make an offer to take the company private. Gunn serves as a Green SEA director.
On top of all that, the Bureau of Land Management is considering an application by Natural Soda for an oil shale research and development lease under which the company would test a method of heating and producing kerogen remaining in shale underground after the nahcolite has been removed.
“We have some very smart people involved” in the oil shale project, said Brad Bunnett, Natural Soda’s president.
He said the company doesn’t yet know if it has the answer to making oil shale development commercially viable.
“But I think we’ve got some good ideas,” he said.
Meanwhile, Natural Soda continues to try to make the most of its position as the owner of BLM leases covering what the company says are the only known large deposits of nahcolite in the world. The deposits were left behind by an ancient inland sea in the Piceance Creek region, and the seam now under development is about 2,000 feet underground.
Natural Soda drills wells and injects hot water to mine the deposits. The baking soda crystallizes when the solution is cooled above-ground in its plant, and the product is sorted by various crystal sizes for different uses.
The natural mining process offers a cost advantage over other forms of baking soda production, such as separating it from soda ash in a process also requiring the use of carbon dioxide, Natural Resources says.
Church & Dwight, which markets baking soda under the Arm & Hammer brand so familiar to grocery shelves, is the leader in North America’s 700,000-ton-a-year baking soda market. Natural Soda also serves the food market with such customers as General Mills and Kellogg. But the plant it operates out of was built to produce sodium bicarbonate for use in reducing smokestack emissions.
After the expansion, that plant still will be used to produce for industrial markets such as agriculture, which uses baking soda to neutralize acids caused by grain diets for cows. But the new plant will be geared toward the food industry, with lots of stainless steel, and few ledges that can gather the ubiquitous baking soda dust that whitens the inside of the existing plant.
It’s all aimed at more easily satisfying the food industry’s stringent inspection requirements and manufacturing standards.
With baking soda offering more than 500 uses in up to 10 industries, Natural Soda’s market opportunities are vast. The substance can be used in hemodialysis to clean blood in people with bad kidneys. Just this year, Natural Soda’s product was used by a manufacturer of a soda-blast system to remove graffiti in Dallas as the city prepped for the big game.
Some 40 employees operate Natural Soda’s facility, and employment is expected to grow by as much as 20 percent once the expansion is complete. Multiple generations of families work at the plant.
Said Gunn, “We’ve been employing locals for quite a long time, and we plan to continue to do that.”
Local communities also stand to benefit from the company’s success. It recently has been reaching out to charities and other organizations to seek causes and events to which it can financially contribute.
“We’re looking forward to getting more integrated with the community here,” Gunn said.
If all goes well, Natural Soda could continue to play an economic and community role in the region for generations to come. The nahcolite bed it is currently mining averages 26 feet thick and is believed adequate to sustain production of 250,000 tons a year for 20 years.
But that’s simply one seam in the area of the current plant site. Natural Soda’s leases hold multiple horizontal seams of nahcolite and cover nearly 10,000 acres, meaning it could continue to develop a versatile resource for a long time to come.
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