Austin Powder Company - Company Profile, Information, Business Description, History, Background Information on Austin Powder Company

25800 Science Park Drive
Cleveland, Ohio 44122

Company Perspectives:

While our black powder days are long gone, the original spirit and in itiative remain as part of our corporate culture. We are pleased to b e of service to our mining, construction, and seismic exploration cus tomers in North America and throughout the world.

History of Austin Powder Company

Austin Powder Company is a Cleveland, Ohio-based private company that produces a full line of industrial explosives and accessories, inclu ding detonator-sensitive and booster-sensitive emulsions and detonati ng cord. The company also provides blasting services in North America , and around the world through subsidiary Austin International. Other subsidiaries include Austin Star Detonator, which offers electric an d non-electric detonators, and Austin Detonator, which manufactures d etonators in the Czech Republic for sale in Europe and elsewhere. Aus tin Powder customers are served in four major industries: the quarryi ng industry, which uses the company blasting products and services to produce the stones needed for construction purposes as well as the g lass and steel industries; surface mining, Austin Powder's original f ocus, which relies on blasting agents to mine coal and precious metal s; the construction industry, which relies on blasting for a variety of projects, from roads to home building; and seismic exploration, fo r oil and gas exploration. Austin Powder's primary plants are located in McArthur, Ohio; Camden, Arkansas; Brownsville, Texas; and Valle H ermosa, Mexico. Products are distributed mostly in North America thro ugh 65 company-owned stores.

Company Origins in the 1830s

Austin Powder was founded by the five Austin brothers: Daniel, the el dest at 28; Alvin; Lorenzo; Henry; and Linus, the youngest at 15. The y left their home in Wilmington, Vermont, in 1832, heading west by ho rse and wagon in search of a suitable place to build a black powder m ill. They traveled as far as Kansas City, where they found a plentifu l supply of sulfur and saltpeter, the raw materials of black powder, but a local market that was limited to the gunpowder the small popula tion required for hunting and fighting Native Americans. Hence, the A ustins returned eastward, finally settling in a part of Ohio near Akr on known as Old Forge. In 1833 they built their first powder mill on the banks of the Cuyahoga River.

Akron held great potential for a powder company because the Erie cana l, the Great Lakes, the Ohio Canal, and the Pennsylvania & Ohio c anal provided connections to eastern markets. This meant that coal mi nes in the region would prosper, and they in turn would need the blas ting powder the Austin brothers produced. In the beginning Austin Pow der relied solely on the labor of the five Austins, who worked 12 hou rs a day. By the end of the 1830s they were able to increase their an nual output of black powder to 72,500 pounds, but more would be neede d as the Akron coal industry continued to grow. In addition, there wa s a need for explosives in the area for canal building, the clay mini ng industry, the mining of iron ore needed for the growing steel indu stry, quarrying, and heavy construction, as well as demand for "sport ing powder" (i.e., gunpowder). In order to better serve its many cust omers, Austin Powder built magazines to store the explosives in Kenmo re, Canal Dover, and Canal Fulton. By 1865 Austin Powder employed 20 and looked to grow even larger.

In 1867 Austin Powder acquired Cleveland Powder Company, which had be en founded in the late 1850s. The deal brought 400 acres of land in w hat would become the industrial heart of Cleveland, where one day pla nts for the Republic Steel Corporation and Aluminum Company of Americ a would be located. The second Austin Powder mill was advantageously situated close to the Ohio Canal as well as key railroads that allowe d the company to ship its products both east and west. In order to ta ke advantage of the company's position, the Austin brothers incorpora ted the business in 1867 to raise $300,000 for expansion. Now in his 60s, Daniel Austin became the first president; he would die in 18 74 at the age of 71. The youngest of the brothers, Linus, succeeded h im.

Austin Powder operated both the Akron and Cleveland plants until 1871 , when the latter was closed and all operations were now conducted in the Newburgh Mill near Cleveland. Over the next decade business pros pered in all areas, as Cleveland become an industrial powerhouse. The company employed no salesmen, but simply took orders from its custom ers at the beginning of the year and scheduled its manufacturing acco rding to need. In 1884 Austin Powder drummed up some additional busin ess by investing $10,000 and selling a magazine and keg factory t o a Cleveland company that loaded shot shells, Chamberlin Cartridge C o. Austin Powder now became Chamberlin's exclusive supplier of rifle powder.

Glenwillow Facility Built in the 1890s

In 1887 the last of the five Austin brothers left the company when Li nus died. He was succeed by R.T. Coleman and Austin Powder launched a new era of expansion, as it began investing in several other powder companies. But it soon reached a crossroads at the start of the 1890s : Cleveland's population center was creeping toward the Newburgh Mill , which was operating at capacity but had no place to expand, and its rifle powder mill was out of date and needed to be upgraded to incor porate new manufacturing techniques. Moreover, the Newburgh mill's cl ose proximity to the Ohio Canal no longer held any particular advanta ge, due to the 11 railroads that now intersected Cleveland. Thus in J anuary 1892 Austin Powder decided to build a new plant to produce rif le powder in the Cleveland area and relegate the Newburgh Mill to the manufacture of black powder only. A total of 1,000 acres of farmland was bought southeast of Cleveland in Glenwillow. Here mills were bui lt to produce sporting powder, and within the year production began.

Despite downturns in the U.S. economy during the 1890s, Austin Powder expanded on a number of fronts. Branches in major cities such as Chi cago, Detroit, and St. Louis were established. Coal mining still acco unted for the bulk of sales, but business continued to grow in the qu arry and construction industries. Sporting and rifle powder sales als o were strong, prompting the 1895 establishment of Austin Cartridge C ompany, to produce loaded shot shells at the Glenwillow site under br and names such as Crack Shot, Club Sporting, and Champion Ducking.

Austin Powder entered the 1900s on a sad note, that of Coleman's deat h. It also faced a number of decisions. Both plants were producing as much powder as possible, but it was becoming obvious that given the way Cleveland was expanding the Newburgh facility would soon have to be given up. In 1904 the plant began to gear down gradually and a yea r later Austin Powder's board of directors voted to invest $60,00 0 to double the production capacity at Glenwillow. It proved to be a difficult project to complete, going over budget by about $10,000 and taking longer than expected. This was just one aspect of a diffi cult stretch for Austin Powder in the early years of the 20th century . The sporting powder business was highly competitive and no longer o ffered much profit, and in 1907 Austin Cartridge was sold for $19 5,000. In that same year, production ceased in Newburgh and the facil ity now served only as a magazine for the next five years, after whic h all operations were consolidated in Glenwillow. To make matters wor se during this period, labor difficulties in the coal mining industry led to a cutback in black powder purchases.

Austin Powder managed to navigate the tough times and enjoyed steady growth during the first 20 years of the 1900s mostly serving the coal industry, despite limiting its production to black powder. High expl osives, in the form of dynamite, had been used in coal mining since 1 870, but it was not until 1908 when the first reliable "permissible" came on the market. Nevertheless, black powder was still widely used, so that in 1923 about three times more black powder was used as perm issibles. The market for explosives of all sorts was growing, and for years Austin Powder had been getting requests for dynamite from its customers. Finally, in the 1920s the company decided it had to become involved in the dynamite business and began the search for a suitabl e production site.

In 1930 nearly 1,200 acres of land was purchased close to the B & O Railroad near McArthur, Ohio. A year later, despite the Great Depr ession that gripped America, the new Red Diamond plant, named for the company's brand of dynamite, went into production and began supplyin g explosives to coal mines and quarries. With the entry of the United States into World War II in 1941, all of the company's production ca pacity at both of its plants was devoted to the war effort, turning o ut military ordnances such as Bangalore torpedoes, demolition charges , land mines, and flares.

After the conflict ended in 1945 Austin Powder resumed its prewar act ivities, but the industry was undergoing significant changes. The use of black powder declined rapidly, prompting Austin Powder to add spe cialized blasting supplies to its product offerings. In 1948 the comp any funded a research and development effort to produce detonating co rd, which it began producing in Glenwillow and shipping in 1950. In t hat same year Austin Powder diversified further by launching its firs t technical training program. In 1953 Austin Powder offered its first electric industrial detonator and also expanded its Midwest presence by acquiring an Evansville, Indiana jobber, Diamond Supply. Later in the 1950s Diamond Supply was relocated to Madisonville, Kentucky, wh ere it supplied explosives and other blasting products to mining, qua rry, and construction customers in Kentucky, Illinois, Indiana, Iowa, and Missouri.

Development of a New Primer in the 1950s

The 1950s also witnessed the introduction of the predecessor to the m odern ANFO blasting agents, Akremite, named for Bob Akre, who was the first to develop an explosive that used ammonium nitrate. Austin Pow der was quick to recognize the importance of ANFO and was the first t o develop the first true dynamite primer for the explosive. To meet t he demand for the product, sold under the AL (Austin Lab) label, the company opened mixing plants throughout its markets. The introduction of ANFO could not have been timed better, given that in 1956 the Fed eral-Aid Highway Act was passed and the United States began building its massive Interstate highway system, which required the use of a gr eat deal of explosives. In addition, in 1956 Austin Powder added a ne w customer, the Calcite Quarry of U.S. Steel in Michigan, the largest limestone operation in the world.

Austin Powder now looked to grow the market for its explosives and bl asting agents by expanding geographically and drumming up business fr om new industries. In the late 1950s it moved into Florida, a major e xplosives market, and then to the Southwest where in affiliation with Midland, Texas-based Southwestern Explosives, Inc. it attracted seis mic exploration customers. In the 1960s the company began serving New England as well as the Pacific Coast, and even provided a good deal of the powder used to explore the North Slope of Alaska. But by 1968 Austin Powder ceased production of black powder at Glenwillow, instea d using the facilities to make blasting agents, cord, and cast booste rs, as well as Bangalore torpedoes for the military. A year later the company won a military contract to provide detonating cord, which wa s instrumental in the creation of the Special Products area at Red Di amond. Here, in the early 1970s, the company developed water-based sl urries, an explosive that, essentially, would render dynamite obsolet e.

In the second half of the 1970s, Austin Powder acquired Southwestern Explosives, with branches throughout the Southwest, and Oregon's West ern Explosives, which added a dozen distributors in Oregon, Washingto n, and California, and established Austin Powder as a national compan y. The Southwestern Explosives acquisition proved highly beneficial, as the Arab oil embargo led to robust growth in U.S. oil exploration. Business also was increased in the 1970s when Austin Powder's resear ch and development efforts once again paid off, this time with the in troduction of the ADP booster, the first non-electric delay device th at was versatile, easy to use, and safe. The company closed the 1970s by shuttering its Glenwillow facility after nearly 90 years of opera tion. A new plant was opened in East Camden, Arkansas, where the prod uction of cast boosters was now handled.

The 1980s brought more product development, with Austin Powder improv ing upon its slurries and work beginning on emulsions. To keep pace w ith the production side of the growing company, in the early 1980s Au stin Powder modernized its sales force, providing better training on the new generation of products and refining the way the salesmen soug ht to meet customer needs. Having already become a national company, Austin Powder now looked to become an international player. In 1985 A ustin International was founded, and began forming alliances, funding start-ups, and creating joint ventures around the world. In 1988 Aus tin Powder and Austin International formed Austin Star Detonator to m anufacture a full line of electric and non-electric detonators for sa le throughout the Americas.

Austin Powder, along with a score of commercial explosives companies, had to contend with federal antitrust changes. The company was charg ed with conspiring with competitors to fix prices and rig bids in the sale of explosives in four states between 1987 and mid-1992. Like te n companies before it, Austin Powder eventually decided not to go to trial, as the cost of litigation and the distraction was not deemed t o be worth the effort. In 1996 Austin Powder pleaded guilty and agree d to pay a $7 million fine.

Austin Powder took another step in its international expansion during the 1990s. It founded Austin Detonator in August 1998 in the Czech R epublic to produce detonators for sale throughout Europe as well as t he Far East. Several months later, in January 1999, the start-up acqu ired the detonator division of Zbrojovka Vsetin, INDET A.S., a compan y with 45 years of experience in industrial detonators and an establi shed customer base.

In the wake of the terrorist attacks of September 11, 2001, on the Un ited States, Austin Powder and other explosives companies entered a n ew era of caution and an emphasis on security. The company became mor e circumspect about its operations. In September 2002, two days befor e the anniversary of the September 11 attacks, the company discovered that 330 pounds of explosives were missing at its Brownsville, Texas plant. The immediate fear was that the incident was related to a pot ential terrorist attack. It was soon learned, however, that a local m an had stolen a 30-pound tube of ammonium nitrate. His goal, accordin g to authorities, was simply to "blow it up and see what it would do. " The remaining ten 30-pound tubes were attributed to an accounting e rror. The company's bookkeeping would attract the scrutiny of the Bur eau of Alcohol, Tobacco, Firearms and Explosives (ATF), which launche d an undercover operation. Agents were able to buy blasting caps stol en from an Austin Powder delivery truck and then trade them for cocai ne. This led the government to dig further into Austin Powder, which would be found to have falsified records at three of its locations to cover up missing explosives. In October 2005 Austin Powder reached a plea agreement and accepted a fine of more than $1 million. In a ddition, the ATF permanently revoked federal explosives licenses at t hree Austin Powder facilities.

Principal Divisions: Austin International; Austin Detonator; A ustin Star Detonator.

Principal Competitors: Dyno Nobel ASA; Orica Ltd.; Sasol Ltd.


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