Through its efforts, NHA serves as a nexus between its members, who include hemp farmers, processors, manufacturers, entrepreneurs, and retailers; the scientific community; and government, to ensure evidence-based policies are drafted and implemented and sound regulations adopted to advance the hemp industry’s growth and the many benefits therein.

What is hemp and why does it matter?
Farmers have grown hemp for industrial use and consumption for thousands of years. A relatively easy crop to grow, hemp has the strongest natural fiber of any resource, making it extremely versatile.

From hemp paper, rope, and textiles to plastics, biofuel, human and animal feed, and stronger, more sustainable building materials, hemp shows great promise for applications across industries and sectors.

Hemp not only promises to transform products that we use in our everyday lives to be more sustainable; it also provides a livelihood to farmers and serves to strengthen rural communities through the promotion of more equitable economies of scale linked to a strong global market.

Impressively, hemp has a total addressable (global) market (TAM) of $15 trillion, but uncertainty about its legality has posed a major barrier to growth. The United States alone represents 90 percent of the global market for hemp products, a retail impact valued at around $620 million, with the capacity to grow 10 percent annually. Currently, it imports much of its hemp fiber, hurd and seeds.

Without clear guidance and a consistent framework for legality, the market will never reach its full potential, which is why NHA has focused on instituting better legislative language that will serve as a foundation for a clear, all-encompassing regulatory framework within which the industry can operate.

Geoff Whaling, Chair of NHA, notes, “If we’re really going to grasp the opportunity that’s before us on this sustainable commodity, we need a whole-of-government approach to industrial hemp because I spend most of my day working with people who say, ‘This is fantastic!’, ‘This fits part of our mandate!’, ‘We’d love to work with you on this!’ and then they follow up with, ‘But, is hemp legal?’”

A question of legality
The United States government legalized hemp with the passage of the 2018 Farm Bill, but the language used in this legislation has created uncertainty, and questions of hemp’s legality continue to persist as a result.

To circumvent assumptions of legality, NHA is working with government to update the definition of hemp to include the word ‘industrial,’ which legislators intentionally left out of the 2018 Farm Bill to ensure that the USDA would permit CBD extraction. This omission had serious implications for NHA members who were interested in growing and harvesting industrial hemp for fiber and grain, which represents 98 percent of the economic potential of the crop.

Currently, farmers who grow industrial hemp under both USDA and state permits are held to the same standards as cannabinoid growers. They are required to give their fingerprints and a background check to plant a crop that, to them, is no different from other rotations they grow.

To change this, the Industrial Hemp Act of 2023, which includes a sub-definition of hemp that reflects the industrial distinction, has been introduced to the United States House of Representatives and Senate. The hope is that the 2023 Farm Bill will enact these changes and two very different market segments will have regulatory frameworks that reflect these differences.

While farmers will still need to apply for permits, there will be two categories under which they can apply: one for cannabinoid production or floral hemp and a second for industrial hemp. Those who choose to grow industrial hemp will be subject to USDA regulations, and states and regulators can still test crops using visual and secondary methods if warranted.

The legislation has garnered the support of members in both the House and the Senate, which has given NHA confidence that the legislation will move forward early this year. As Whaling states, “we’ve got leadership on our side.”

A framework for regulation
The change in language in the 2023 Farm Bill will have no implications on the cannabinoid sector, but it does open the door for improvement. The 2018 Farm Bill mandated FDA oversight on anything produced from hemp—cannabinoids, seeds, grain, and fiber—but while fiber and grain are straightforward, the conditions around cannabinoids, their use, and their dosage are slightly more complicated.

NHA has worked closely with the FDA on this matter to develop a framework that will “meet the industry where it’s at today,” acknowledging that while the CBD market has come a long way in a short time, there are 150 to 175 minor cannabinoids that have yet to be commercialized.

“They want a framework that will allow them to not have to come back to congress every single time that there is a new development that comes out of the cannabinoid space,” says Whaling, who notes that more research is necessary to meet the requirements of the FDA. “At the end of the day, the FDA just wants to be able to ensure that anything that is being consumed by humans (and animals) is safe, and who can argue against that?”

The organization is advocating for a whole-of-government approach akin to the efforts during the Second World War. At the time, the Department of Defense was unable to source hemp for ropes, rigging, and canvas and growing hemp was prohibited, so the federal government, with the help of agencies like the USDA’s Commodity Credit Corporation, were able to “stand the hemp industry back up in six months,” says Whaling.

NHA is also working with the government to ensure that there are advantages for those who are contributing to the production of sustainable commodities like hemp. Under the Growing Climate Solutions Act, carbon credits will be available to producers that are contributing to the achievement of the U.S.’s climate goals and economic strength of the nation.

A report produced by NHA found that if over the next 10 years only five percent of farmers growing commodity crops in the U.S. added a rotation of hemp, it would result in 10 to 12 million acres of hemp. At present, there is limited infrastructure to process raw hemp in the U.S., but there are an increasing number of processors and decorticators coming online domestically. However, to process this volume of hemp, the U.S. would need approximately 524 more hemp facilities, as well as a capital investment of $18 billion.

On the matter of innovation
Without question, prohibition can have a stunting effect on innovation, but while the United States has been freeing the industry from the shackles of illegality, the rest of the world has continued to identify ways to utilize hemp’s natural fibers and proteins to improve economic and health outcomes for their people.

Whaling highlights a team in Scotland that is studying how to utilize the protein from industrial hemp to create plasma, and Bcomp out of Switzerland, which currently uses other natural, sustainable fibers but is seeking a supply chain for hemp, which they know is a far superior fiber.

“Those are the herculean success stories that are out there; we just need to bring them home to America,” he says. “So yes, [prohibition] has been harmful to the industry but I’m wondering, if hemp was not prohibited, what would it be today? I tend to think that it’s been to our advantage because now technology has really gotten to a point where people can break this commodity apart and use it to address many of the challenges that are facing the entire planet.”

Instead of waiting for guidance from the U.S. on hemp regulations, many countries around the world have made hemp a part of their overall national economic strategies. To date, 62 countries have adopted legislation and instituted regulations for the use of industrial hemp, like Malawi, which has declared hemp to be a commodity of significant importance.

Whaling goes on to discuss how hemp is helping to establish bio-economies around the world: “Africa Exim bank, the former African import-export bank, has decided that they are no longer going to wait for the U.S. and other countries to give them handouts. They are going to build the solutions to the challenges on that continent for themselves: from infrastructure to transportation and railroad systems, they want hemp to be part of that solution.”

Positive outcomes
As a sustainable natural resource with near-endless uses, hemp abounds with advantages. Hemp can contribute to improved individual and collective health outcomes, improved environmental stewardship, and economic strength. The opportunities and the commodities hemp can produce are immense.

“I think that there is going to be a day sometime very soon where that lightbulb is going to go off and some world leader is going to say we need to embrace industrial hemp as part of the solution to global climate challenges,” says Whaling.

In the meantime, NHA will continue to provide education and advocacy and to collaborate with government and stakeholders to ensure that its members and the industry have a solid foundation from which to grow.

“Membership has its benefits and if people are believers in all of the solutions that industrial hemp can bring, we welcome them to participate in this space,” says Whaling, who will continue to fight the good fight on behalf of NHA members and the industry to realize the many benefits and advantages derived from hemp.

The post Building a Better Framework for the Future<p class="company">National Hemp Association</p> appeared first on Business In Focus Magazine.

Having built a highly successful business since acquiring the company in the early 1980s, husband and wife co-owners Rhonda and Tim Kendrick want to maintain that.

“We are focusing this year on becoming more efficient with what we have. Because we’ve grown quickly, we have a lot of things we need to take care of,” explains Rhonda Kendrick. “We’re having our strategic planning meeting here in about three weeks, figuring out where we’re at and where we need to get to.”

The company—which still proudly has the largest sawmill in Iowa—offers sawing, harvesting, logging, grading, steaming, debarking, and drying services. It also emphasizes sustainability and safety and operates several ancillary businesses. The company’s services are generally self-performed. “We really have a strong belief that we need to do it ourselves so that we can maintain control and take care of the quality. If there’s something wrong, then it’s on us,” Rhonda notes.

KFP saws roughly 17 million board-feet per year—up from 15 million two years ago—and exports to nearly 30 countries. Finished goods include cabinets, wood signs, wood art, and home décor, and the team works with white and red oak, soft and hard maple, grey and red elm, ash, walnut, basswood, hickory, and cherry, among other varieties of lumber. And since we last spoke, the company bought a sawmill in Muscatine and a combined sawmill/dry kiln operation in Vinton, both in Iowa.

“The Muscatine facility was producing about 10,000 feet a day, and now we’re producing about 22,000 feet a day out of it. We more than doubled our production just by making some improvements that needed to be done… and working with the people by teaching them how to be more lean. It’s been a good move for us,” Rhonda says.

The relatively new Muscatine plant specializes in walnut, which made it very attractive as KFP wants to increase the amount of work it does with walnut. The Vinton business, meanwhile, was streamlined after it was acquired. The milling segment was not meeting efficiency benchmarks, so the company closed it and sold the equipment. A new steamer was purchased to improve the walnut steaming process as KFP refocused the Vinton operation to solely perform dry kiln work.

“All the walnut that’s sawn in Muscatine has been shipped to Vinton to be dried. From there, it’s either exported or shipped to our Edgewood facility,” Rhonda explains.

In the past two years, KFP also added a 36,000 square foot finished goods facility to its Edgewood base. A stacking line has been upgraded, new saws purchased, and a computerized tally system which measures lumber packs was introduced.

This is promising to be a pivotal year in the company’s history. Rhonda and Tim want to maintain a family ownership model, and the couple’s four adult children are all involved with the company. “We’re both 65, and we’re ready to cut back a bit, but they want to go, go, go. So, that’s where we’ve been in the last few years,” she says.

The company can trace its lineage to the 1950s, when Tim’s father, Don Kendrick, Sr., opened a logging and sawing business in Edgewood. That business flourished then in the early 1970s, he sold it. Sadly, the business closed just a few years after it was sold.

In the early 1980s, the shuttered sawmill was revived by Tim, his brother, and Rhonda. Dry kilns were added in the late 1980s and a cabinet company was acquired in 2001. A multi-million-dollar sawmill expansion ensued with new machinery, while new facilities, services, and businesses were added along the way.

One of those businesses, Shimlee, offers custom wood art wherein the team uploads a photograph provided by a customer and prints the image on a wooden surface. The company name is derived from shim board—a waste product from the sawing process.

Kendrick Home, which started in 2017, went through startup, then growth, and then COVID hit. Kendrick Home sales skyrocketed through online sales during the pandemic, and employment at the company reached about 160 people.

Demand for Kendrick Home art has settled down a bit, although that division—as well as other businesses including Forever Cabinets by Kendrick, Shimlee, and a printing operation—continues to thrive. KFP also sells compost, mulch, sawdust, and industrial products such as railway ties and pallet cants, and maintains a retail outlet.

Sustainability is key to KFP’s approach to business, and the company has sustainability verification certification from the National Hardwood Lumber Association (NHLA). While an ecologically friendly ethos is usually associated with opponents of logging, sustainability makes good business sense as far as this team is concerned.

“If we don’t take care of what we’ve got, what will our kids be cutting? There won’t be anything left to cut,” Rhonda states. “If we don’t manage the timber properly, we’ll get primarily maple back when it’s the oak we need. The oak gets shaded out by the maple, so you’ve got to make room for the sun to come through.”

The company harvests trees for its own use at a 1,300-acre site—100 acres more than it had two years ago—in Iowa. When possible, KFP aims to source local wood, as even the same species of tree can look different if harvested from widely dispersed areas. And, in addition to being good stewards of the forest, the company uses a biomass/steam turbine system that generates electricity by burning sawdust produced by the sawmill.

Kendrick Forest Products is a firm believer in lean manufacturing. The company uses a Kanban system and performs ‘clean sweeps’ of its facilities. In a Kanban system, work in progress is carefully tracked on a computer or board to facilitate transparency, efficiency, and communication. A clean sweep involves a comprehensive inspection of a work area to find ways to enhance operations.

“We’ve been doing lean for, I’d say, 20 years,” Rhonda shares. “When times got tough, I really credit lean for getting us through. We knew what to do, what to look for. We were focusing on efficiencies and stabilizing our growth.”

The company hired Lynn Thompson, from Toronto-based firm Quantum Lean, to visit its facilities and train staff members. The self-described ‘lean maniac’ has visited KFP on three occasions over the past year. During each of her week-long visits, Thompson trained staff and then spent time on the work floor taking notes, making observations, and suggesting ways to do things more efficiently. Rhonda was so impressed that, now, Thompson will be taking part in the company’s upcoming strategy meeting.

KFP runs tours for the public, so people can see its operations for themselves. Keeping in this same spirit, it attends trade shows in person to promote various aspects of its operations. Otherwise, the team does not do a huge amount of marketing, relying instead on its solid reputation and word-of-mouth referrals for much of its business.

Given that the company deals with saws, tall trees, and large pieces of lumber, safety is an obvious concern. Its loggers are fully insured and undertake Forest Industry Safety and Training Alliance (FISTA) instruction. Veteran loggers also teach new hires how to stay safe while working with huge trees.

In terms of challenges, Rhonda cites finding, developing, and maintaining “competent, capable people with the core values we feel are important. We try to treat our workers right.” Those values include loyalty, caring, and a good work ethic.

Other challenges include dealing with destructive insects. The emerald ash borer, a voracious beetle with a propensity for infesting then killing ash trees, remains a problem that the company deals with as best it can.

Over the next few years, Rhonda anticipates Kendrick Forest Products will focus on organization and family succession. As part of the organizational piece, a new human resources director is creating work charts showing exactly how profitable and productive the firm is every day. Rhonda would like to eventually see charts that report hourly results.

“It’s been a business that I’ve really truly enjoyed being part of,” she tells us. “I’ve met so many wonderful people. I am just really thankful I’ve had the opportunity to be involved in the company.”

The post A Family-Owned Lumber Business Looks to the Future<p class="company">Kendrick Forest Products</p> appeared first on Business In Focus Magazine.

When our previous profile ran, TOPS had approximately 900 compressors in its fleet. Today, the company boasts over 1,700 compressors, “between our active compressors and units to be delivered to customers in the very near future,” says Vice President of Sales and Marketing Misty Ingle, and the emphasis remains on rentals, not sales.

In late 2021, the company’s equipment offered a combined output of roughly 100,000 active horsepower. This output has since quadrupled and continues to climb.

The company’s success can be attributed to excellent products and great service. TOPS provides maintenance and support for all its compressors, as well as certain “macro factors,” says Chief Executive Officer Brian Green.

“There’s a broad drive for developing a cleaner, more efficient oilfield, and electrification and automation are key components of that. Our customers see the benefits to electrification and we’re seen as the top supplier for that,” states Green, whose father founded the company. “Secondly, we’re seen as the premier service provider of compression period—electric or gas.”

Superior compressors
Gas compression involves increasing the pressure of natural gas for a variety of purposes in the oilfield, from artificial lift to pipeline transmission. The process is not new, but until recently, most compressors were powered by gas-combustion engines which generate a lot of carbon dioxide and other toxic emissions.

By contrast, over 98.5 percent of compressors in the TOPS fleet boast electric-powered motors that produce considerably less pollution. The company recently contracted a third-party engineering firm to quantify the environmental benefits of its electric units, and the results were impressive. By switching from a gas-powered compressor to an electric model, “we’re looking at roughly a 50 percent decrease in overall emissions per compressor,” says Green. “This equipment runs 24/7, 365 days a year. Given a 50 percent decrease in emissions and the aggregate level of our horsepower, it’s an incredibly significant [amount of] carbon emissions we’re saving.”

Electric units from TOPS are also one-third quieter than traditional gas compressors and feature cutting-edge, custom-designed supervisory control and data acquisition (SCADA) technology. SCADA systems incorporate software, sensors, programmable logic controllers, and other technologically advanced solutions that enable operators to automate processes, collect real-time data, and remotely monitor performance.

The SCADA system and other technological tools allow the company to “automate processes that you normally cannot do on engine-driven equipment,” notes Green. “You’re improving efficiencies across the board to the point where I think we’re seeing anywhere from four to five percent improvement in overall run-time with electric compression compared to engine-driven compression.”

TOPS compressors offer 98 percent-plus run-time versus an average 95 percent run-time with competitors’ compressors. “Our equipment runs more seamlessly than many of our competitors,” says Ingle.

In addition to enhancing performance and reliability, automation is a boon to safety, as there is less need for a human operator to monitor compressors in the field.

Such futuristic compressors represent quite a leap from the early days of the firm. TOPS was founded in 1996 by Brian’s father, L.D. Green, at a time when natural gas-powered compressors dominated the sector. Brian joined the firm in 2006, and a few years later, the company began to take a close look at electric-driven compressors. Industry veterans were skeptical of electric units, but such compressors proved to be well suited for handling shale gas, which became a coveted Permian Basin commodity around 2008.

A growing team
The company continues to invest in electric compressors and expand its fleet. L.D. Green retired in early 2023, and his son became Chief Executive Officer. This is not a family-owned business anymore but is “a private-equity-backed company. Apollo Global Management, Inc., based in New York, has been partnered with TOPS for several years and remains committed to our growth strategy,” explains Brian Green.

TOPS runs a branch in Carlsbad, New Mexico to support operations in that area and a facility in Yukon, Oklahoma that prepares equipment for use in the field. Personnel numbers have increased, adding nearly 50 additional employees during 2023.

When it comes to new hires, “We try to go for a fully blended profile as far as experience goes. We are actively targeting experienced engineers, technicians, and so forth, as well as brand-new, just starting community college level individuals,” states Ingle. The company offers a comprehensive, 18 to 24-month internal training program at its Midland headquarters.

“We can take someone with not necessarily tons of experience but base skills coming out of technical school, then by the time [they are done training], they have a background in every facet of what we do on the mechanical side and [instrumentation] side. By the time they finish, they can choose whatever specialization they want within the company,” says Green.

With safety as the company’s “number one core value,” TOPS runs its own safety department, develops and implements safety policy based on best practices, carefully investigates any problems or errors, and provides “all the necessary safety equipment to our employees at our own expense,” Green says. Weekly safety meetings are held with staff to go over issues and note any hazards, and the company aims to “encourage as much open dialogue as possible.”

Partnering for success
The company acquires its gas compressor units from Ohio-based manufacturer Ariel, and as a measure of how close these companies are, TOPS became an official Ariel distributor last summer.

“Ariel manufactures the compressor frame and cylinders. Those are the major components on the overall skid, but there are other components as well that we get from other manufacturers,” says Green. However, “all the horsepower we have deployed over the past two years has been 100 percent Ariel.”

After constructing the frame and cylinders, Ariel ships the units to packagers who add electric motors, process piping, cooling systems, and other components. The units are then sent to TOPS. Upon arrival, the compressor “is about 90 percent complete. We finish all the instrumentation, do our own quality checks of the compressor, and do a full run out before it ships to the field,” says Green.

And the TOPS compressor fleet only continues to get bigger and stronger. When we last spoke, the company was preparing to ship a 2,000-horsepower compressor—the largest unit it had handled at the time. It has since surpassed that benchmark and shipped compressors capable of 2,500 horsepower. TOPS has also added its first-ever line of medium-voltage compressors; while most of the company’s compressors are running off less than 500 volts, these larger compressors require over 4,000 volts.

Looking ahead
The company does not do much promotion, relying primarily on repeat business and word-of-mouth referrals from existing customers. While eager to grow, the firm wants to avoid becoming a victim of its success. “Managing the growth” as Green puts it, is the priority.

This involves “making sure our service stays up to the best standard and ensuring that we have a strong pipeline to add on technicians, both on the mechanical side and the [instrumentation] side. For a lot of companies, as they grow, their service begins to suffer; that’s not what we want to see here. Up until this point, we’ve done a great job managing that.”

TOPS would prefer to enhance its existing strengths rather than develop products beyond compressors or move into markets outside of the Permian Basin.

“We’ve gotten some opportunities [elsewhere], but the demand is so great here,” says Green. “We have a really strong customer base. We’re nowhere close to outgrowing the Permian Basin. This is our sole focus and will be for quite some time.”

Going forward, the company plans to “continue what we do and what we’re best at: being the industry leader in electric compression and continuing to grow while providing a full spectrum of horsepower.”

Within those parameters, the company harbors some pretty big ambitions: in five years, Ingle hopes that TOPS has enough equipment to offer “a million horsepower, for sure.”

“I would say a million horsepower is certainly within reach of our company,” Green agrees. Other goals are “being recognized as the industry leader in compression—both gas and electric—to offer the best level of service and innovation to further reduce emissions, to get better uptime, and continue to innovate and add features.”

The post A Green Success Story in the Oil and Gas Sector<p class="company">Total Operations & Production Services (TOPS)</p> appeared first on Business In Focus Magazine.