Soaring demand for wireless monitoring systems at oil production sites has led Emerson Electric Co. to undertake a $110 million expansion in the Twin Cities’ southwest suburbs.
In Shakopee on Tuesday, Emerson will open a $70 million headquarters building for its Rosemount-brand operation.
The business makes instruments to measure pressure, temperature, level and flow in industrial-fluid systems. They send information to control rooms of oil refineries, power plants, waste-treatment sites, petrochemical firms and food factories.
Emerson also recently completed $40 million in renovations and upgrades to factories in Chanhassen and Eden Prairie. The St. Louis-based company plans to add more than 500 new jobs at the three sites over five years to help fulfill demand for Rosemount instruments.
“We are excited. We are growing,” said Tom Moser, group vice president of Rosemount Measurement and Analytical. He added, “There is no question that the Bakken oil fields, and the expansion of other shale and flows from the pipelines, are certainly contributing to a lot of our growth.”
Rosemount instruments — most are roughly the size of a large flashlight — are considered vital in the industrial world because they prevent explosions, equipment failures and production slowdowns. The business is part of Emerson’s process-management division, which has about $8 billion in annual sales.
Robert McCarthy, an equity research analyst for Stifel, Nicolaus & Co. said the process-management division “remains the company’s jewel in the crown with strong order trends, outsized leverage to oil and gas and energy markets and continued excellent margins.”
Rosemount engineering manager John Roche said the business makes more than 100 sensor and transmitter products.
Last week, he and Moser toured the newly revamped Chanhassen facility as scores of factory workers bolted, tested and calibrated devices in the newly configured space. The assembly plant houses about 1,300 of the 2,700 employees Emerson has in Minnesota.
Those numbers will rise quickly, said Moser as he watched as Peggy Ferrozzo pluck the circuit boards, steel plates, housings and other parts needed to assemble a custom pressure-sensor and data-transmitter device. She just finished her eighth week as an Emerson employee after several months of temp work. Rosemount needs more “instrument builders” like her, Moser said.
Product demand has jumped in recent years because of the rise in U.S. shale oil. The Bakken oil fields in North Dakota now produce more than a million barrels a day, which is keeping processing and refiners incredibly busy. Customers there and elsewhere increasingly want to monitor such processes with the help of wireless devices.
Emerson’s wireless devices can withstand temperatures of minus-70 to 185 degrees F. The devices cost $1,000 to $2,000 each. Because they are wireless, they are cheaper to install than monitors with electrical wires that must go through or around tanks, walls, pipes, machines and oil wells.
“Installation costs are significantly reduced with wireless systems,” Moser said. “They can be 70 to 80 percent less [cost to a customer] because they are simpler to install.”
Going wireless has not only increased demand, but allowed Emerson to create new types of process monitors. Recently developed products address equipment reliability, energy usage and equipment safety for the first time.
“We are experiencing robust growth for our sensing technologies that are vital not only for monitoring our customers’ process operations, but also for providing new eyes and ears across [their] business enterprise,” said Emerson Process Management President Steve Sonnenberg.
At the new Shakopee headquarters near Hwys. 169 and 101, 300,000 square feet is finished office space. Another 200,000 square feet will be converted into a new manufacturing space by March. The building sits on the former ADC Telecommunications complex that was closed in 2000 after the tech bubble burst.
With investments from Emerson, and $6 million in subsidies from the city, county and state, the site is active again. It will immediately house about 500 office workers and another 200 factory workers by March.
Emerson in 1976 bought Rosemount Measurement and expanded it over the years. But the latest investments are the biggest yet.
In addition to the Rosemount operations in the southwest suburbs, Emerson also has other businesses units in Bloomington and Mankato.