Lapp molds it's future

MADE IN ROCHESTER: Lapp molds its future in churning out insulators

Matthew Daneman • Staff writer • December 7, 2008

Electricity goes wherever it can, following the path of least resistance. That means something has to stand between copper or aluminum power transmission lines and the towers holding them up. Which is where the ceramic insulators churned out by Lapp Insulators LLC come in.

The Genesee County-based manufacturer turned out 10,000 tons of ceramic electrical insulators last year from its LeRoy facility for power utility companies. And Lapp is about to become a lot busier, as the company last month added manufacturing locations in Germany, Poland and Romania through its acquisition of German-based Argillon Insulators GmbH and Argillon Alumina GmbH. With the move, Lapp is now Europe's largest electrical insulator manufacturer and one of the world's largest.

Those LeRoy-made ceramic insulators start with the boxcar of powdered feldspar, bentonite and other ingredients the company receives weekly. That powder is mixed with water and formed into log-like "blanks" of clay that then dry for days before being cut by a computer-controlled lathe, glazed and cooked in a kiln for seven days.

Making the ceramic insulators "is part physics and part art," said Matthew Bailey, vice president of sales and marketing. "There's a lot that goes on when you fire organic material up to 2,400 degrees."

Making ceramic insulators can be a six- to seven-week process, Bailey said. And the ceramic insulator business revolves around doing high volumes; Lapp insulators generally go for the equivalent of $1.50 or so a pound, with individual insulators weighing dozens to hundreds of pounds.

Lapp employs 180 in LeRoy, along with 13 at its Georgia facility and 250 in Germany. The Argillon acquisitions will add another 1,000. Bailey said it also would give the company a bigger inroad into the growing silicon insulator market and better access to such major original equipment manufacturing customers as Siemens AG and ABB, which are based in Europe.

Lapp had revenues of $118 million in 2007, and expects to top $200 million this year because of the acquisition and organic growth, Bailey said.

The U.S. electrical insulator market is struggling.

A decade ago there were 10 manufacturers, while today there are three, including Lapp, Bailey said.

One of those three, Victor Insulators Inc. of Ontario County, applied for Chapter 11 bankruptcy in September.

In the bankruptcy filing paperwork, CEO Ira O. Knickerbocker said the company, hit by rising natural gas prices and transportation costs and by a price war caused by dumping by some competitors, had to cut its white-collar positions by 20 percent and to negotiate a 20 percent cut in the salaries of its union workers.

But the 120-employee company fell behind on its employee pension plan, and those obligations — roughly $8 million — were a major contributor to the bankruptcy, Knickerbocker wrote.

MDANEMAN@DemocratandChronicle.com