St. Pierre Salt Company, located in Brusly, Louisiana, was formed in 1950 by Julian St. Pierre. The St. Pierre family owned 2,000 acres of land over huge salt deposits in West Baton Rouge Parish (County) which served as a source of salt, a vital raw material for the massive petrochemical industry located along the Mississippi River from Baton Rouge to New Orleans. Since the company was first formed, petrochemical firms have repeatedly attempted to purchase large tracts of land from the St. Pierre family. At the insistence of Julian St. Pierre, however, the family has steadfastly refused to liquidate its extensive property holdings.
Julian St. Pierre, a World War II veteran, attended a prominent southern university on the G.I. Bill and majored in geology. In addition, he worked for a major oil company for two years. His primary interest, however, was the huge salt dome formations under his family's land. Government geologists predicted that the salt deposits were virtually inexhaustible. In 1948, St. Pierre secured a bank loan to build two brine wells. (Brine wells are used to dissolve the salt in the dome by pumping and circulating water through the dome.) After the walls were drilled, a local chemical plant signed a contract with St. Pierre to purchase brine from his field. The chemical firm secured a right-of-way and laid a pipeline from St. Pierre's wells, under the Mississippi River, to its complex located east of the river.
As St. Pierre received revenue from the chemical firm that purchased brine, he expanded his capacity to five wells. (Two additional water wells were required to service the five brine wells.) As the petrochemical complex expanded in the greater Baton Rouge area, the chemical firm that owned the pipeline began selling brine to other users in the area. Soon, all five wells were operating at capacity. Thereafter, St. Pierre drilled five additional brine wells and three supporting water wells, thereby doubling his capacity. Demand later stabilized at a level that could be satisfied from the brine of eight wells; consequently, two of St. Pierre's wells are kept in "reserve."
In 1977, St. Pierre was contacted by an east coast chlorine producer who was attempting to secure purified (free of heavy metals) salt and have it shipped by rail to its three plants located in West Virginia, South Carolina, and Georgia, respectively. The chlorine producer had historically purchased his salt from the Bahamas; however, a 20-year contract with the Bahamian supplier was to expire in 1981. Early negotiations convinced the chlorine producer to find another source of salt.
To provide the salt, St. Pierre would have to install a purification plant, including salt evaporators, centrifuges, dryers, and a loading facility. The firm already had on its property a rail spur that previously serviced an abandoned sugar mill. After an extensive review of the project's economics, St. Pierre decided to proceed with the purification plant. In August 1980, he signed a contract to supply purified salt to the chlorine producer, beginning February 1, 1982.
A key decision confronting St. Pierre and the engineering consulting firm he employed to design and construct the facility was the selection of centrifuges, which separate recrystallized salt from the brine solution. The separated salt is then fed to the salt dryers for the removal of residual moisture. Two major firms supplied such centrifuges suitable for salt service-AKZ, a German firm, and Century-Morris (CM), a U.S. corporation. AKZ centrifuges are used widely in Europe and are considered the most reliable in the industry. These centrifuges had a stream factor of 96 percent. However, in the event of a breakdown, the German firm cannot supply technical service or replacement parts immediately. Officials of AKZ projected that there was only a 20 percent probability that their centrifuges could be restored to service within 48 hours following a breakdown. Because parts had to be flown from Germany, immediate return to service for the centrifuges was unlikely. Moreover, AKZ had not established a U.S. distributorship or service center. Its organizational philosophy was based on centralization in order to control quality. Hence, its major service centers were located in Ludwigshafen, West Germany.
The CM centrifuges are used by most U.S. firms for salt separation. Corporate headquarters are located in Houston, Texas, and a service center is located in New Orleans, Louisiana. The CM centrifuge is not as reliable as the AKZ model; it can demonstrate only a 90 percent stream factor. The close proximity of the New Orleans service center, however, supports a projected 85 percent probability of return to service within 48 hours after a breakdown.
Forty-eight hours was selected as the critical time by St. Pierre's engineers because of the in-process inventory normally maintained. This inventory permits the centrifuges to be down for 48 hours without curtailment of operations. A production curtailment would result in lost revenue for St. Pierre because his plant was "sold-out."
St. Pierre and his consulting engineers visited plants using both the AKZ and CM centrifuges. Installation and operating costs for both machines were estimated to be equal. Both have the same rated capacity of 30 tons/hr. St. Pierre had a gut feeling to select the AKZ because it "looked better." However, he knew his decision had to be made on a more rational basis.