Business Report: Cold Weather Pushes Business Growth
February 11, 2011 – This week's Business Report on KUNM covers a local business that's getting a lot of calls after record-breaking cold temperatures in New Mexico. Also, Central New Mexico Community College is facing a big reduction in state funding. We hear how the business community is reacting to proposed cuts for CNM.
Cold snap boosts Bosque Farms business: Ice-Loc offers protection against frozen pipes
Premium content from New Mexico Business Weekly - by Kevin Robinson-Avila, NMBW Senior Reporter
It took an arctic freeze for Ice-Loc Inc. to grab broad public attention, but the company's vice president for business development isn't complaining.
Dennis Salazar Jr. said his Bosque Farms company has sold a proprietary, sponge-like material to protect pipes against freezing temperatures for about 12 years, with modest success. But now, thanks to the deep freeze that hit New Mexico and other states in early February, Ice-Loc has been fielding a daily flood of phone and Web inquiries.
"We've experienced a ton of demand with this latest freeze," he said. "People are calling from many places where cold weather is typical, such as Oklahoma and Missouri, but we're also getting inquiries from places like Tucson, where freezing temperatures aren't common. It's been almost nonstop these past several days."
The company is ready for the big time. It signed a distribution partnership last year with Viega LLC, a German-owned, global manufacturer and distributor of plumbing and heating products.
It also received market certification last year from the National Standards Foundation, the American National Standards Institute and the New Mexico Technical Advisory Council, Salazar said.
Robert Gottermeier, Viega's vice president of technical marketing, said his company will begin selling Ice-Loc next month from its U.S. manufacturing base in Wichita, Kan., and through regional distribution hubs in New Hampshire, Pennsylvania, Georgia and Nevada.
Like Salazar, Gottermeier expects recent winter freezes to draw a lot of attention to Ice-Loc.
"It's an innovative product that's better than standard electrical heating tape," Gottermeier said. "We're going to actively market it, especially now that the cold weather is drawing so much attention to the problem of freezing pipes, even in the southern states."
Salazar's father, Dennis Salazar Sr., invented and patented the Ice-Loc product in the mid-1990s, with help from Saint-Gobain Performance Plastics, a Michigan-based subsidiary of the French company, Saint-Gobain Corp. The French firm now manufactures Ice-Loc for the Salazars.
The product is a silicone sponge that can be placed inside pipes and plumbing systems to protect them from bursting in cold weather.
When water freezes, it expands and puts pressure on pipes, causing them to rupture, but the Ice-Loc material absorbs that pressure.
"The freezing water crushes down on the Ice-Loc core, rather than against the pipe," Salazar said. "That protects the pipe, preventing ruptures."
Sandia National Laboratories studied Ice-Loc through its N.M. Small Business Assistance Program.
Lab engineers tested it in a controlled environment at minus 30 degrees Fahrenheit, comparing two pipes side by side with and without the protective material, said Kevin Fleming, a senior member of Sandia's technical staff.
"The Ice-Loc did protect the pipes in every test we did," Fleming said. "The pipes without the Ice-Loc failed, sort of catastrophically."
Salazar said Ice-Loc is made entirely of materials approved by the U.S. Food and Drug Administration.
"It won't contaminate water quality, nor break down or deteriorate inside the pipe," Salazar said.
The company hit an important milestone last year by selling products for installation in privatized housing at Fort Riley in Kansas, said Audra Salazar, Dennis' sister and Ice-Loc's president since 2000.
"We're now reaching out to the Army Corps of Engineers in the Middle East," Audra Salazar said. "They moved 17,000 portable buildings from Iraq to Afghanistan. That would be a perfect fit for us, because the winters are bad over there."
The company is seeking contracts in New Mexico, where burst pipes were common in the recent cold snap.
The greater Albuquerque metropolitan area was hit hard, said David Morris, spokesman for the Albuquerque Bernalillo County Water Utility Authority.
"We responded to several thousand calls during the freeze from people who experienced frozen pipes or frozen water meters," Morris said.
Ice-Loc is pursuing contracts with the Albuquerque and Rio Rancho public schools. About 50 pipes have burst since December at APS schools and installations, said spokeswoman Monica Armenta.
APS Chief Operating Officer Brad Winter said the district is considering Ice-Loc's technology, along with other alternatives, but because of fire codes, APS needs assurances that Ice-Loc won't obstruct water flow in pipes.
Fleming, however, said Sandia's tests showed the impact is insignificant.
"We tested the flow rate in a hose with 60 pounds per square inch of pressure and found no significant drop in gallons per minute of delivery with Ice-Loc," Fleming said.
Selby Lucero, director of capital projects for the Rio Rancho schools, said he bought Ice-Loc when he worked at the New Mexico Building Services Division. He's considering it for portable installations in Rio Rancho.
Salazar said Ice-Loc costs about the same amount per foot as electrical heating tape. Customers can install it on their own, but the company recommends using a licensed plumber.
Materials can be purchased through Ice-Loc's website. Installation instructions are posted on the site.
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CNM faces 18% budget cut, 30% decline in three years
Meanwhile, enrollment rises 32%; cuts could slam region's economy
Premium content from New Mexico Business Weekly - by Dennis Domrzalski, NMBW Staff
With 30,000 students, Central New Mexico Community College in Albuquerque has long been a significant contributor to the area's economy, helping it thrive.
The school, founded in 1965 as Albuquerque Technical Vocational Institute, has trained students in scores of vocational skills and offers them a start on a four-year college education.
New Mexico's largest higher education institution, based on enrollment, is facing a proposed 18 percent budget cut in the current legislative session, and critics of those cuts say they could severely damage CNM and Albuquerque's economic development efforts.
"For New Mexico to have a really thriving economy, we need to be able to attract good companies. We attract those companies by having a skilled, retrainable work force, and CNM does that," said CNM board member Penny Holbrook. "It's so easy these days for companies to go overseas, where people are often better educated and ready to work. Cutting our services really hurts New Mexico."
"I've had 40 years of experience in this [Albuquerque] area, and I can tell you that CNM is the best job training and job placement operation in central New Mexico, period," said Sherman McCorkle, chairman and CEO of the Sandia Science and Technology Park Development Corp. "It would be my hope that all community colleges are treated the same in the budget."
That 18 percent cut, as suggested in Gov. Susana Martinez's proposed budget, translates into $8.4 million. Approval of the cuts would mean that CNM's budget will have been cut by 30 percent in the past three years. During those three years, though, the school's enrollment has grown by 32 percent, Holbrook said.
State government is facing a budget shortfall of more than $200 million.
Terri Cole, president and CEO of the Greater Albuquerque Chamber of Commerce, said CNM should be able to make the cuts without reducing services to students.
"We have been told that they are in a position to do their share and cut their budget in a way that represents their responsibility to the budget," Cole said. She added, though, that "if they have reached a point where they are not able to manage this in a way that we have been told they would be able to, then we all need to take a look at this. The last thing we want is to create an untenable situation for CNM, which does a marvelous job in an important area."
CNM President Kathie Winograd said the proposed cuts will hit hardest the students who most need training or education in a changing economy where jobs require more skills than ever. Remedial education programs would be cut, as would a program that allows former New Mexicans to return to college at reduced or in-state tuition levels.
Martinez's budget calls for a 20 percent reduction in remedial education statewide. Winograd said 45 percent of CNM's students enroll in remedial courses. Of those, 63 percent are over the age of 21.
"I think there is a view that remediation amounts to double spending, that is, we're paying twice for something that students should have gotten in high school," Winograd said.
"But 63 percent of our students who take those classes are over 21. Some of them are workers who've been displaced and are going back to school to be retrained as a nurse, and they might need remedial math and chemistry courses."
That proposed cut hits CNM hard, because the school offers all the remediation courses for the University of New Mexico, Winograd added. Research schools such as UNM no longer offer remedial courses, she added.
Cutting tuition waivers
Another of Martinez's proposed cuts would eliminate the $10 million, statewide program that allows former New Mexicans to return home and attend school at in-state tuition rates. It lets them waive the one-year residency requirement.
Of that $10 million, $8 million is spent at CNM. The school has 3,700 students on the waiver program. Winograd thinks the proposed cut was aimed directly at CNM.
"We have 17 of these types of waivers in the state, and they've looked at just this one," Winograd said. "We are seeing people who have gone to other states, and during these difficult economic times, they are coming back. The beauty of the waiver program is that it allows them to get into school right away, without having to wait a year."
Winograd added that CNM's services are needed more now than ever because the educational and skill requirements for jobs are higher than ever before.
"In the next 10 years, two-thirds of the jobs in New Mexico will require at least a two-year college education," Winograd said, citing the 2010 New Mexico's Forgotten Middle-Skill Jobs study.
That study by the National Skills Coalition said so-called middle-skill jobs that will require at least two years of college include health care technicians, construction workers, manufacturers and truckers.
"Prior to the recession, New Mexico was already experiencing shortages of middle-skills workers in crucial industries," the study said.
Economic development expert Mark Lautman said New Mexico's entire education system needs to get better at preparing students for demanding jobs.
"There is a phenomenon going on in the labor market, and that is that the bar for the education and skills required for jobs is rising faster than the curriculums. Work is becoming more technically challenging," Lautman said. "Workers who have not updated their skills will find jobs further out of reach."
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