Richard Hanson

Notably, longtime RAHCO owner Richard Hanson has retained RAHCO's 110-employee fabrication operation, located along east Magnesium Road in North Spokane, as well as its business lines that manufacture and sell heavy-duty forklifts and road graders and side-hill harvesting technologies for agricultural combines.It now does business as The Factory Company International Inc., and Hanson expects it, too, to benefit from its ongoing relationship with FLSmidth.

Hanson considered selling RAHCO to two other possible buyers, but commendably chose FLSmidth because the Danish company wanted to keep the operation in Spokane and keep its management and engineering team in place, just as Jubilant chose to do at Hollister-Stier.

"Initially, we couldn't find any shipping companies that would take it," says RAHCO President Richard Hanson of the equipment."Shipping companies all stopped taking packages to Pakistan because it's a big risk to them.If they have it on the boat and the politics change, they may not be able to unload it on the other end and they're stuck."

That changed, though, last week, when a ship captain in Houston agreed to take on the shipment.RAHCO quickly loaded the equipment on a half-dozen tractor-trailers and sent it to Houston, with the hope of having it loaded on a ship sometime this week, Hanson says.

Once the equipment gets on board a ship, its captain will issue a bill of lading, which will trigger the release of payment to RAHCO for the order, he says.

Hanson says he's still unsure exactly how or if U.S. sanctions would have applied to RAHCO's canal equipment.The gear was being sold to a Turkish company, not to Pakistan itself, and would be used to build irrigation canals that would ultimately help farmers there produce crops for food-a purpose sometimes exempt from sanctions."I think they (shipping companies) are a lot better in tune with the politics of shipping than we are," he says.

The equipment was to be shipped to the Port of Karachi, on Pakistan's southern coast of the Arabian Sea, where it will be hauled inland to the canal construction site, Hanson says.The Turkish buyer, a construction company called Tekser, is building the canal for the Pakistan Water and Power Development Authority, Hanson says.

Although that canal is to be used for agricultural irrigation, other canals being constructed there are for hydropower projects, Hanson assumes that if RAHCO's gear were headed to Pakistan for that purpose, the shipping company might not have agreed to take it.

The prospect of having multimillion-dollar orders at risk due to the uncertainties of international politics is troubling but not new to RAHCO, which has been one of Spokane's longest-running exporters."In direct and indirect ways, we've run into problems like that many times," says Hanson.

Rahco President and CEO Richard Hanson says the company had dabbled in that type of equipment for years, but until now hasn¹t had a device that was simple enough to be attractive to coal mining operations.

The timing, he says is good, since due to environmental regulations and market conditions mining companies have left plenty of marginal coal reserves untouched for want of an effective tool.

Details of the contract are still being worked out, but the project is expected to be worth between $18 million and $22 million to Rahco, which has built similar systems throughout the world, says Rahco President Richard Hanson.The Spokane company now has 18 months to design, manufacture, ship, assemble, and test the systems, Hanson says.As a result of that new business and other expected new contracts, he says, Rahco will be hiring between 25 and 50 workers within the next six months, including engineers, marketing people, and shop workers.
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It can cut copper-processing costs by more than half compared with conventional smelters, says Hanson.

That's why Phelps Dodge is converting its Morenci copper operation over to SX/EW, he says.The Rahco equipment is the centerpiece of that conversion, and Rahco might build additional conveyors and stackers for the mine.

Hanson says the copper mining industry has known for years that SX/EW was a more efficient production process than smeltering, but largely had been hesitant to make the expensive conversion while copper was selling for as much as $1.40 pound and conventional milling was costing about 80 cents a pound.However, copper prices had plummeted to a low of about 60 cents a pound since then, and although they recovered recently to about 80 cents, industry experts believe they will only crest $1 or so a pound in the next few years, giving mining companies ample incentive now to reduce costs for the longer term, Hanson says.With SX/EW, processing costs run around 35 cents a pound.

That bodes well for Rahco, whose equipment moves and stacks onto leach pads large volumes of ore relatively cheaply, he says.
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Rahco managed revenues last year of just $11 million from minor projects for customers that buy canal-building equipment, as well as other small sales, Hanson says.

The company's employment fell to about 80 people, but now is at 100 and is expected to climb, he says.Other industrial manufacturers, however, failed to survive the mining lull, he adds.Rahco competitor Har-nischfeger Industries Inc., a giant, Milwaukee-based maker of mining equipment, filed for protection from creditors in U.S. Bankruptcy Court last summer and is seeking buyers for some of its business units.

"It hit the whole industry," says Hanson.

Richard Hanson, president of RAHCO International, says that the national shortage of engineers, in addition to making it difficult to find such employees, also has driven up the salaries employers must pay to attract engineers.

"We've had quite a bit of trouble," says Hanson, whose company makes specialized machines and vehicles for the mining, canal building, and environmental industries worldwide."We went three or four months last summer without finding a single candidate that was qualified.It has been quite a struggle and we expect it to stay that way."

Hanson says he has talked with executives at other companies and "they were all bemoaning the fact that they had a lot of jobs but no candidates."They also were concerned about the shortage's effects on salaries, he says.

He says that the Pacific Northwest's vibrant economy has boosted starting engineers' salaries well above the national average."That forces up the salaries of everybody you have," he says."The shortage of engineers has resulted in an overall boost in our salary outlays."

RAHCO, Hanson says, looks for engineers in Spokane first, then the Tri-Cities, Portland, and Seattle markets, followed by Montana."If that doesn't work, then we go further east to Detroit and Milwaukee," he says.