Austin Powder Company

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Austin Powder Company

25800 Science Park Drive
Cleveland, Ohio 44122
U.S.A.
Telephone: (216) 464-2400
Fax: (216) 464-4418
Web site: http://www.austinpowder.com

Private Company
Incorporated: 1867
Employees: 70
Sales: $208.3 million (2004)
NAIC: 325920 Explosives Manufacturing

Austin Powder Company is a Cleveland, Ohio-based private company that produces a full line of industrial explosives and accessories, including detonator-sensitive and booster-sensitive emulsions and detonating 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 and non-electric detonators, and Austin Detonator, which manufactures detonators in the Czech Republic for sale in Europe and elsewhere. Austin Powder customers are served in four major industries: the quarrying industry, which uses the company blasting products and services to produce the stones needed for construction purposes as well as the glass and steel industries; surface mining, Austin Powder's original focus, which relies on blasting agents to mine coal and precious metals; the construction industry, which relies on blasting for a variety of projects, from roads to home building; and seismic exploration, for oil and gas exploration. Austin Powder's primary plants are located in McArthur, Ohio; Camden, Arkansas; Brownsville, Texas; and Valle Hermosa, Mexico. Products are distributed mostly in North America through 65 company-owned stores.

Company Origins in the 1830s

Austin Powder was founded by the five Austin brothers: Daniel, the eldest at 28; Alvin; Lorenzo; Henry; and Linus, the youngest at 15. They left their home in Wilmington, Vermont, in 1832, heading west by horse and wagon in search of a suitable place to build a black powder mill. They traveled as far as Kansas City, where they found a plentiful supply of sulfur and saltpeter, the raw materials of black powder, but a local market that was limited to the gunpowder the small population required for hunting and fighting Native Americans. Hence, the Austins returned eastward, finally settling in a part of Ohio near Akron 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 canal, the Great Lakes, the Ohio Canal, and the Pennsylvania & Ohio canal provided connections to eastern markets. This meant that coal mines in the region would prosper, and they in turn would need the blasting powder the Austin brothers produced. In the beginning Austin Powder relied solely on the labor of the five Austins, who worked 12 hours a day. By the end of the 1830s they were able to increase their annual output of black powder to 72,500 pounds, but more would be needed as the Akron coal industry continued to grow. In addition, there was a need for explosives in the area for canal building, the clay mining industry, the mining of iron ore needed for the growing steel industry, quarrying, and heavy construction, as well as demand for "sporting powder" (i.e., gunpowder). In order to better serve its many customers, Austin Powder built magazines to store the explosives in Kenmore, 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 been founded in the late 1850s. The deal brought 400 acres of land in what would become the industrial heart of Cleveland, where one day plants for the Republic Steel Corporation and Aluminum Company of America would be located. The second Austin Powder mill was advantageously situated close to the Ohio Canal as well as key railroads that allowed the company to ship its products both east and west. In order to take advantage of the company's position, the Austin brothers incorporated the business in 1867 to raise $300,000 for expansion. Now in his 60s, Daniel Austin became the first president; he would die in 1874 at the age of 71. The youngest of the brothers, Linus, succeeded him.

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 prospered in all areas, as Cleveland become an industrial powerhouse. The company employed no salesmen, but simply took orders from its customers at the beginning of the year and scheduled its manufacturing according to need. In 1884 Austin Powder drummed up some additional business by investing $10,000 and selling a magazine and keg factory to a Cleveland company that loaded shot shells, Chamberlin Cartridge Co. 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 Linus 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 incorporate new manufacturing techniques. Moreover, the Newburgh mill's close proximity to the Ohio Canal no longer held any particular advantage, due to the 11 railroads that now intersected Cleveland. Thus in January 1892 Austin Powder decided to build a new plant to produce rifle 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 built 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 Chicago, Detroit, and St. Louis were established. Coal mining still accounted for the bulk of sales, but business continued to grow in the quarry and construction industries. Sporting and rifle powder sales also were strong, prompting the 1895 establishment of Austin Cartridge Company, to produce loaded shot shells at the Glenwillow site under brand names such as Crack Shot, Club Sporting, and Champion Ducking.

Austin Powder entered the 1900s on a sad note, that of Coleman's death. 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 year later Austin Powder's board of directors voted to invest $60,000 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 difficult stretch for Austin Powder in the early years of the 20th century. The sporting powder business was highly competitive and no longer offered much profit, and in 1907 Austin Cartridge was sold for $195,000. In that same year, production ceased in Newburgh and the facility now served only as a magazine for the next five years, after which all operations were consolidated in Glenwillow. To make matters worse 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 explosives, in the form of dynamite, had been used in coal mining since 1870, 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 permissibles. 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 suitable 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 Depression that gripped America, the new Red Diamond plant, named for the company's brand of dynamite, went into production and began supplying 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 capacity at both of its plants was devoted to the war effort, turning out military ordnances such as Bangalore torpedoes, demolition charges, land mines, and flares.

After the conflict ended in 1945 Austin Powder resumed its prewar activities, but the industry was undergoing significant changes. The use of black powder declined rapidly, prompting Austin Powder to add specialized blasting supplies to its product offerings. In 1948 the company funded a research and development effort to produce detonating cord, which it began producing in Glenwillow and shipping in 1950. In that same year Austin Powder diversified further by launching its first 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, where it supplied explosives and other blasting products to mining, quarry, and construction customers in Kentucky, Illinois, Indiana, Iowa, and Missouri.

Company Perspectives:

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

Development of a New Primer in the 1950s

The 1950s also witnessed the introduction of the predecessor to the modern ANFO blasting agents, Akremite, named for Bob Akre, who was the first to develop an explosive that used ammonium nitrate. Austin Powder was quick to recognize the importance of ANFO and was the first to develop the first true dynamite primer for the explosive. To meet the 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 Federal-Aid Highway Act was passed and the United States began building its massive Interstate highway system, which required the use of a great deal of explosives. In addition, in 1956 Austin Powder added a new 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 blasting agents by expanding geographically and drumming up business from new industries. In the late 1950s it moved into Florida, a major explosives market, and then to the Southwest where in affiliation with Midland, Texas-based Southwestern Explosives, Inc. it attracted seismic 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, instead using the facilities to make blasting agents, cord, and cast boosters, as well as Bangalore torpedoes for the military. A year later the company won a military contract to provide detonating cord, which was instrumental in the creation of the Special Products area at Red Diamond. Here, in the early 1970s, the company developed water-based slurries, an explosive that, essentially, would render dynamite obsolete.

In the second half of the 1970s, Austin Powder acquired Southwestern Explosives, with branches throughout the Southwest, and Oregon's Western Explosives, which added a dozen distributors in Oregon, Washington, and California, and established Austin Powder as a national company. 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 research and development efforts once again paid off, this time with the introduction of the ADP booster, the first non-electric delay device that was versatile, easy to use, and safe. The company closed the 1970s by shuttering its Glenwillow facility after nearly 90 years of operation. A new plant was opened in East Camden, Arkansas, where the production of cast boosters was now handled.

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

Austin Powder, along with a score of commercial explosives companies, had to contend with federal antitrust changes. The company was charged with conspiring with competitors to fix prices and rig bids in the sale of explosives in four states between 1987 and mid-1992. Like ten companies before it, Austin Powder eventually decided not to go to trial, as the cost of litigation and the distraction was not deemed to be worth the effort. In 1996 Austin Powder pleaded guilty and agreed 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 Republic to produce detonators for sale throughout Europe as well as the Far East. Several months later, in January 1999, the start-up acquired the detonator division of Zbrojovka Vsetin, INDET A.S., a company with 45 years of experience in industrial detonators and an established customer base.

In the wake of the terrorist attacks of September 11, 2001, on the United States, Austin Powder and other explosives companies entered a new era of caution and an emphasis on security. The company became more circumspect about its operations. In September 2002, two days before 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 potential terrorist attack. It was soon learned, however, that a local man had stolen a 30-pound tube of ammonium nitrate. His goal, according 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 error. The company's bookkeeping would attract the scrutiny of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), which launched an undercover operation. Agents were able to buy blasting caps stolen from an Austin Powder delivery truck and then trade them for cocaine. 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 addition, the ATF permanently revoked federal explosives licenses at three Austin Powder facilities.