WisBusiness: Wisconsin building supply mogul expands into wind power
By Brian E. Clark
BELOIT – Ken Hendricks is not one to rest on his laurels.
Named “Entrepreneur of the Year” by Inc. Magazine last year, the 66-year-old Janesville native is a self-made billionaire who dropped out of high school in the 11th grade.
But that never held him back. In addition to heading American Builders & Contractors Supply Co. (ABC) -- which had $3 billion in sales in 2006 -- he has assembled a growing list of diversified companies.
While many of them have to with the construction industry, he also jumped into the alternative energy field earlier this year when he bought Roug A/S, a 25-year-old Danish wind power products and turbine company.
He quickly renamed it Hendricks Industries and made plans to expand facilities to Keokuk, Iowa – a port city of 15,000 on the Mississippi River at the southeastern tip of the Hawkeye State.
Corporate Contractors, which Hendricks also owns, began construction in September on a 347,000-square-foot plant wind turbine tower manufacturing plant in Keokuk that will create up to 350 jobs for what will amount to a nearly $80 million investment.
“Why, we’ll have a paint booth big enough to paint 747’s,” said Hendricks during a recent interview in his expansive, duck decoy-filled office above the Rock River in Beloit.
The Keokuk plant should be able to manufacture a dozen towers a week, each of which will sell for around $500,000. If all goes well, production could triple by 2020.
And just why did Hendricks make the bold move into wind power?
As a billionaire, he clearly has the resources to do whatever he wants. That includes making large donations to foundations, and writing a check for $1 million to WisconsinEye, to provide video coverage of the Legislature and other areas of government.
“I believe in transparency,” he said.
Hendricks said he also has long been interested in energy.
“But you can’t buy a utility company,” quipped Hendricks, who called the wind energy market dynamic, yet underserved.
“And I’m interested in green industries, if you will, because it’s a fast-growing industry,” he said. “Back in the '70s, they were looking at solar, but then gas prices came back down. I don’t think we are going to see that this time.”
Hendricks said ABC continues to grow, but with the downturn in housing, he was looking for a new endeavor that promises to expand.
“I’m a guy who lives on growth,” he said. “It has a lot of potential growth for the country and is really green. It is a good investment for the future.”
Hendricks said much has changed in the past 10 years.
“Just look at the price of gas,” he said. “Back then it was a $1.40 or $1.50. Yes, things do change. After 9/11, things changed. Things evolve in food, medicine and other areas.
Hendricks said he views alternative energy and wind turbines as a way to create jobs in the Midwest.
“Nothing happens unless you create a job,” he said. “I bought this company over in Denmark, which gave us the expertise that very few American companies have in building towers. So we are eons ahead of the rest of the industry in terms of building towers.”
When the plant is done in Keokuk, he said Hendricks Industries will be the largest wind turbine tower manufacturer in the world.
“Right now we are number two and I’ve only been in this business since Jan. 2 of this year,” he remarked, noting that the company now has plants in Denmark and Germany.
Hendricks said he considered Wisconsin as a site for the factory, but chose Keokuk because it is a Mississippi port.
Nor did it hurt that the Hawkeye State is one of the country’s top wind power producers and home to the large “Top of Iowa” wind farm in which several Badger State utilities have invested.
“Wisconsin doesn’t really have strong wind power support yet, though the governor is trying to get something going,” he said.
Iowa, on the other hand, will put fund three-quarters of the $80 million project, Hendricks said. “There is an enormous amount of support and cooperation from the state.”
But the biggest reason he chose a small city in Iowa is because it’s on the Mississippi River. Moreover, Hendricks owns the Southeast Iowa Port Terminal in Keokuk, which can accommodate any kind of incoming and outgoing barge freight. Hendricks also owns Hendricks River Logistics, LLC, a commodity material handling service in the same community.
He said it costs $40 to $100 a mile to ship a 100-ton tower on a highway. A barge, by contrast, can transport the same tower for $2 a mile.
“You can ship to Tulsa, Oklahoma; all the coastlines, Chicago, the Great Lakes and all the Mississippi and Ohio rivers,” he said. “When you plot that out, you can get these towers a lot closer and reduce the costs.”
Similarly, there are mills up and down the rivers where Hendricks will buy steel, he said. The blade manufacturer, Siemens, has a plant eight miles from Keokuk. Siemens is also Hendricks Industries' largest customer.
“We are basically sold out for five years,” he said. “Twenty four hours a day, seven days a week. As soon as the plant is done, we are filled up with orders.”