Bringing the Heat

Victory Energy 'Full Steam Ahead' on HRSG Boiler Sales
By Tom Bryan | September 01, 2003
The key to becoming a successful vendor in the ethanol industry is immediately earning the trust of those at the top and keeping it.

That's the cornerstone of John Viskup's no-frills approach to business, and the push behind his company's rise to becoming one of the the leading suppliers of ethanol plant boilers in America.

In just four years, Victory Energy Operations LLC, formed in 1999 by Viskup and co-founder James Sponder, has tripled in size. The company expects to surpass 400 percent company growth next year at age five.

While Victory Energy has also achieved success outside the ethanol industry, its rapid sales growth can be directly linked to the continued upsurge in ethanol plant construction since 2000. In fact, about 60 percent of the company's boiler sales in the last two years have been within the ethanol industry, with its leading HRSG (Heat Recovery Steam Generator) product.

How did Victory Energy rise to the top of the ethanol boiler business so fast? In a word, ambition.

The company made strong in-roads by installing HRSG boilers at Gopher State Ethanol in St. Paul, and Al-Corn Clean Fuels in Claremont, Minn in 2001. But Viskup said he knew the company would need to gain the trust of the leading process design companies if it wanted to achieve sustained growth in the ethanol sector.

"When we first became involved in the ethanol industry, we did not have relationships with the leading ethanol plant designers and developers," Viskup said. "We didn't know the Broins [of Broin Companies], the Vander Griends [of ICM Inc.], the Fagens [of Fagen Inc.] or the Swains [of Delta-T Corporation]. Our team literally hit the road with our suitcases and our briefcases and started presenting a solution for efficient steam production to ethanol plant designers and producers in an environmentally-challenged industry."

It took some time to assemble "the right team at the right time," but in a relatively short period of time, people started listening.

"Dennis and Dave Vander Griend [of ICM Inc.] trusted us and gave Victory an opportunity to provide our first complete package boiler system at the U.S. Energy Partners plant in Russell, Kansas," Viskup said. "Our ethanol industry involvement sprung from there. Around that same time, we presented at the International Fuel Ethanol Workshop & Trade Show in St. Paul, discussing the benefits of thermal oxidation technology when operated with a Victory Energy HRSG. A lot of our early success came from that show and also from our exposure in that first issue of Ethanol Producer.

At U.S. Energy Partners, Victory installed a natural gas-fired "fire tube" boiler and two HRSG units connected to the municipality's turbines. From an energy standpoint, the project benefits the entire community.

"Victory Energy really understands the ethanol industry, the importance of synergies and economizing waste streams into usable energy," U.S. Energy Partners General Manager G.J. Long said.

Fulfilling Commitments
What Victory Energy seems to be "doing right" is engineering, manufacturing and delivering a system typically within 14 weeks that fulfills the plant's requirements and satisfies its customers.

Viskup told EPM, "Our customers have helped us develop cutting edge technology to continually improve the efficiency of our HRSG systems."

One example of Victory Energy's improvements to the system supply is the development of a "Process Heat Exchanger" designed to recover waste heat from the feedwater economizer. In some cases as much as eight million Btu per hour has been reclaimed, providing a significant fuel savings to the ethanol plant's yearly natural gas costs, Viskup said.

Viskup added, "The moment we stop striving to support our customers in meeting the goals of providing the most efficient ethanol plant available today, we become the obstacle."

"I am open about the fact that we ran into various problems with the first generation of thermal oxidizers and HRSG systems. But what mattered most to Victory Energy was assuring our customers that we were a team and that those systems, even if the equipment was not provided directly by Victory Energy, would be fixed, no matter if it meant working around the clock to get it done."

Victory Energy showed both character and resilience as a company last year when its independent business associate of two years, MMT Environmental, folded and disappeared from the ethanol scene overnight, leaving several producers with multi-million dollar thermal oxidizer plights to deal with on their own.

One ethanol plant left with unresolved thermal oxidizer problems was Chippewa Valley Ethanol Company (CVEC), of Benson, Minn.

Bill Lee, general manager of CVEC told EPM, "When MMT fell, Victory hung on and honored its commitment with us. They stood by, and together we are now in the process of assessing the success of what's been done."

Today, Victory Energy is moving forward, with little or no interest in getting into the thermal oxidizer business.

"We're a boiler company," Viskup told EPM. "With the relationships we have with ICM, Broin, Fagen and Delta-T, getting into [the thermal oxidizer business] is not something we are pursuing right now and we are choosing to support some of the ethanol plant designer's thermal oxidizer systems coupled with our HRSG boilers."

Over 35 HRSG Boilers Installed
What Victory is best known for, of course, is designing and manufacturing HRSG Boilers, a product line concept that originated with Viskup.

"Our goal was to provide the ethanol industry with a value-added product, something that was distinct and recognizable," he said.

What the Victory Energy team came up with was a finned, platen-style boiler designed in the traditional "D-frame" technique. This same boiler design was used by Victory Energy for cogeneration applications prior to introducing this HRSG to the ethanol industry.

"This product line has been very successful and it has achieved what we had hoped people in the ethanol industry recognize it, too, which was our goal."

Due to the emissions requirements that ethanol plants must meet today, thermal oxidation is required for destruction of volatile emissions. HRSG boilers like Victory's design, capture the heat from the process and utilize this heat to supply steam to the plant for the manufacturing process.

Over the past 24 months, Viskup said, Victory Energy has manufactured, shipped and commissioned over 35 complete boiler systems for ethanol plants.

"We expect the ethanol industry will continue to grow over the next three to four years and we feel that our product supply to the ethanol industry will grow steadily," Viskup told EPM.

The successful Victory Energy HRSG boiler design serves other industries as well, such as cogeneration, municipal solid waste (MSW) and other types of pollution control facilities.

"The HRSG boiler line is truly a growth product for Victory Energy," Viskup said. "As our economy begins to strengthen again, we feel that the supply and demand for this product line will increase steadily as other industries implement heat recovery projects throughout the United States."

Keystone "O" Style Boiler Emerges Strong
Victory also is proud of its line of time-proven "watertube" boilers.

Specifically, the company manufactures a line of Keystone boilers that has been in production for well over 100 years.

Victory recently purchased an exclusive license agreement from Erie Power Technologies, in Erie, Penn., to manufacture the boilers. The boiler has been manufactured since 1860 and there are currently over 3500 installations nationwide for this product.

"The Keystone boiler is a respected name in the boiler industry and will provide significant growth for Victory Energy over the next few years," Viskup told EPM. "The success of the Keystone "O" frame boiler product line will be developed by our highly-experienced and talented manufacturer's representative force strategically located across the United States."

According to the American Boiler Manufacturers' Association (ABMA), the watertube boiler industry size over the last two years has averaged at 150 units sold. Victory Energy has already secured over 10 percent of the watertube boiler market in the United States and expects significant growth in 2004.

The Keystone "O" type watertube boiler serves heavy manufacturing industries, refineries, petro-chemical, pulp and paper mills, steel mills, universities, hospitals and government facilities. The Keystone "O" frame watertube boiler is also a solid fit for most ethanol plants, Viskup said.

"In fact three Keystone "O" frame boilers have been supplied by Victory Energy to the Iowa Ethanol, Sioux River Ethanol and Otter Creek Ethanol projects," he said. "Some ethanol plants have single HRSGs, and that's fine most of the time, but many plants that are designed for 40 million gallons a year will likely end up increasing production, and subsequently needing more steam," Viskup said. "We provide the Keystone "O" frame boiler or an industrial firetube boiler, as an auxiliary boiler to make up the difference in the steam demand requirements."

Viskup told EPM that coupling a Keystone boiler with an HRSG unit is a geat idea for several reasons, including straightforward auxiliary use, independent use when the dryers are not running or independent use during initial ethanol plant startup a period of days when the plant needs steam for fermentation, but little else.

Many ethanol plants, especially the larger ones, are also choosing to go with what Viskup calls "redundant HRSGs," or two identical HRSG boilers. The massive 100-mmgy VeraSun Energy ethanol plant under construction near Brookings, S.D., for example, has installed two 25-foot Victory Energy HRSG boilers, along with four ICM gas-fired, rotary-drum driers and ICM thermal oxidizer systems.

Auxiliary Equipment & Other Boiler Systems
In support of all the boilers systems Victory offers to the industry, it provides various types of ductwork, stack fabrication, heat exchangers, structural steel, control systems and integration of control systems, low-NOx burner systems, water treatment equipment and other products in support of the boilers it sells.

The company also offers a line of "firetube boilers," ranging in size from 100 HP to 2200 HP. These boilers are used in light manufacturing businesses, schools, hospitals and the ethanol industry.

Victory designs and manufactures nearly all of its boilers and auxiliary equipment at its Owasso (Tulsa Metro Area), Okla.-based headquarters and fabrication plant. The company has branch offices in Lincoln, Neb., Chicago, Ill. and St. Paul, Minn.

Currently, Victory Energy has 27 employees focused on sales, engineering, project management, inspection, field service, operator training, and aftermarket service and spare part supply.

Focus on Service, Delivery
Victory Energy maintains a full time service group available "24 hours a day, seven days a week" to ensure that all of its customers are able to keep their boilers operational with minimal downtime, as attested by the satisfaction of its clients.

"Victory Energy has been very responsive to the requests of ICM," said ICM Inc. CEO Dave Vander Griend. "Their deliveries have been on time, and startup assistance has always exceeded contract requirements. We have appreciated their dedication to the ethanol industry."

Victory's service technicians provide the startup services, product line training, testing services, maintenance services and long term service contracts for all the equipment we sell, Viskup said.

The company maintains a fleet of trucks and specialty trailers designed to allow the company to deliver its boilers "on time," Viskup told EPM. "With the addition of our boiler delivery service, we have never missed a delivery commitment to any of our customers in the ethanol industry."

And the company maintains a complete staff of engineers, highly experienced in mechanical, electrical, structural and heat transfer engineering. It also maintains AutoCad draftsman to provide quality drawings for all its equipment.

"We can provide complete 3-D models of our equipment if required by our customers," Viskup said.

Riding the Wave, Planning for the Future
How long can Victory Energy count on the ethanol industry for new business?

"That's a good question, and one that a lot of industry suppliers would probably like to have the answer to," Viskup said. "Some say seven to 10 years, others say three to four years [of sustained industry growth and new plant construction].

"I'm guessing, on the safe side, that we can count on at least three to five more very good years of new plant construction," he said.

If the ethanol industry experiences a slowing trend, Viskup told EPM, Victory Energy will be transitioned into other new and emerging industries, which will provide continued growth for the company.

"Despite the emerging industries this company is serving, the ethanol industry will always be the industry that gave us a big start," Viskup said. "So there is a feeling of loyalty there." EP