Nuclear plant construction has run aground, but at Riverside Central Services in Natchez, Miss., the business of storing reactor equipment keeps rolling on the river.
Nuclear power, the "peaceful atom," could prove a bomb. The public increasingly doubts its safety and many in the financial community proclaim it economically doomed. Nevertheless, Riverside Central Services Inc. (RCS) in Natchez, Miss., a specialized handler of component parts for nuclear-power plants, is buffered from market forces and continues to thrive. For Larry L. "Butch" Brown, RCS's president, life on the mighty, muddy Mississippi River has never been better.
"Our future is assured," asserts Brown, sipping a Miller Lite in a cocktail lounge as he watches dusk settle on the humid bayous and antebellum mansions of Natchez seven floors below. The lounge he sits in is part of an historic hotel he helped restore; the brand he drinks is sold by a local beer distributorship he partly owns. Brown, 40, dabbles in so many ventures that business associates have nicknamed him "Deal a Day." He describes RCS, his biggest deal, and the niche he has molded in storing strictly nonradioactive and nontoxic material. As he speaks, his animated mannerisms are those of an entrepreneur relishing a cornered market.
"We're the only privately held warehouse in the country that we know of that will store nuclear components, test them, and maintain them," says Brown. "Our customers have nowhere else to go. If regulations and restraints are lifted, there will be more plants built and more need for our services. If the nuclear industry stays flat, or even takes a nose dive, we still have guaranteed business Construction time keeps getting longer and longer, and exist ing plants need to store spares for as long as they're on line."
Since 1978 there have been no new orders in the United States for nuclear generating plants. In the past 11 years, 101 units have been canceled. But Brown has no qualms about deriving his livelihood from a clearly troubled industry. "There is no disastrous scenario for Riverside that I can think of," he insists.
Brown's sanguine outlook appears justified. Most utilities store construction materials at on-site facilities that are costly to maintain. Very few private warehouses in his region, or even the country, will store nuclear-plant materials. The ones that do are ill-equipped to compete with RCS. The company pioneered long-term storage contracts, averaging five years, whereas most warehouses operate with monthly contracts, or on a speculative daily basis with materials constantly in flux Brown believes that his company's 500,000-square-foot temperature-controlled facility on a bustling Mississippi River port is the country's largest privately owned warehouse under one roof -- larger than even, say, New Orleans's Superdome. All specialized services, handled by 33 full-time employees, are consolidated in one building accessible by rail, river barge, and truck.
Utilities and contractors, burdened with long lead times and crammed inventories of cumbersome machinery, have turned to RCS as the logical solution to nuclear storage problems. Being the leader in an esoteric field has helped propel the company from $181,461 in sales in 1977 to more than $2.4 million in fiscal 1983, its 550% growth during the first five years made it #253 on INC.'s list of the 500 fastest-growing private companies in the United States (see INC., December 1982). RCS's aftertax profits consistently exceed 15% of sales.
Brown conceived the lucrative RCS concept during an embarassing incident that would have chastened most other men. When Mississippi Power & Light Co. (MP&L) began construction of Grand Gulf Nuclear Station Units 1 and 2 at Port Gibson Brown's wholesale lumber outfit in Natchez supplied the hardwood needed to shore up excavation work. One day in 1976, driving from Natchez to the site, Brown accidently tore a huge hole in the seat of his pants at a stop five minutes away. "I said the hell with it and went anyway," recounts Brown in a drawl that is somehow southern and fast-clipped at the same time. "The sophisticated engineers saw my split pants and laughed. I just looked at them and said, 'Boys, I bust my ass for an order."
The remark amused Albert Thompson, the Grand Gulf project manager for Bechtel Power Corp., worldwide construction giant and project contractor. The two began an amiable chat that led Thompson to confide that Bechtel sorely needed storage space for rapidly accumulating nuclear-power-plant components. Brown pounced on the challenge and persuaded a local wholesale grocery company that was going out of business to rent him 10,000 square feet of its building at 4 cents a square foot. "The grocer thought he was screwing me," says Brown. "He didn't know I had persuaded Bechtel to pay 8 cents a square foot."
RCS's unique services evolved from coping with exigencies, rather than beginning with a preconceived strategy. Bechtel increasingly called Brown to give basic instructions, such as, to rotate this valve or lubricate that part Brown responded quickly to each demand. He also sensed that business with Bechtel had prospects beyond transitory deal-making.
"I asked Bechtel how things were going over at Port C'ibson," he says. "They told me construction would take another five years, and I had their business for those five years. I asked them how much my volume would increase. They said it might double. At the time, I had 10,000 square feet that were packed so tightly I knew we had to expand. I estimated future space requirements from what Bechtel told me, and got a bank loan to build a new warehouse away from the downtown area and down by the river port. Then, I got Bechtel to agree to a five-year contract, which was unheard of, but they went for it."
The 1977 facility, encompassing 60,000 square feet on 17 acres, cost $1.2 million, expansions through 1981 brought it to its current size. More than 65% of RCS's entire inventory is related to the nuclear-reactor industry, generated by MP&L construction at the twin Port Gibson units and by Gulf States Utilities Co. construction at River Bend Nuclear Station Units 1 and 2 in St. Francisville, La. Bechtel, contractor for the twin Grand Gulf units, is still RCS's major client, filling 40% of the warehouse and generating 30% of the company's total sales. Other customers renting space include Stone & Webster Engineering, contractors for the River Bend project, General Electric, and Westinghouse Electric.
