By JOE WALKER
jwalker@paducahsun.com

If ever a river company has identified and gone after market niches, it is James Marine Inc.

Since CEO Ronnie James founded the Paducah firm in 1986, it has grown from 25 to 980 employees and diversified from barge repair, tug and fleeting work and fuel sales to a laundry list of services provided by nine divisions, subsidiaries or affiliates under the JMI umbrella. The footprint covers a sizable chunk of the Southside, plus Calvert City and, most recently, Wickliffe.

“We’re doing all this for 10 and 20 years and not just for next year,” said James’ son, Jeff, executive vice president and chief operating officer. “Everything in our industry is so capital intensive. It’s hard to find assets and to train people to work them efficiently.”

James is intent on finding new technology and applying existing technology from other industries to the barge business, which he said has traditionally been slow to change, especially in shipyard work.

Among the firm’s latest ventures is Brownwater Plastics, tucked behind JMI’s headquarters at 4500 Clarks River Road. The 18 employees of the new business are developing ways to use a patented process called powder impression molding to manufacture plastic barge covers.

“We’re in the prototype-development stage and keeping our fingers crossed that this venture works,” he said. “We ran across the technology in a roundabout way and are looking at possible uses in the marine industry.”

Wickliffe shipyard
With Paducah River Service and Walker Boat Yard, the JMI enterprise has traditionally serviced marine companies along the Ohio, Tennessee and Cumberland rivers, all of which converge near the foot of Broadway. But it made good business sense to look at a strategic location on the Mississippi River, where some of its largest customers heavily ship.

More than two years ago, James began looking for land below Wickliffe, near the confluence of the Ohio and Mississippi rivers. He eventually acquired 12 acres that had been used as a scrapyard and developed the land for dry dock work. James Marine-Wickliffe opened just over a month ago with 58 employees - mostly fabricators, welders and electricians.

“Along with our Paducah operations, this gives us three full-size dry docks,” James said.

Building business
James Marine’s first big acquisition was in 1994 when it bought Walker Towing Corp. - keeping the towing, harbor and repair-yard business in the family. Ronnie James had begun his career in 1970 by going to work for his father-in-law, Paul Walker, who founded Walker Boat Yard (later Walker Shipyard) in 1945. The JMI-Walker Towing merger nearly tripled the size of the operation in equipment and employment.

In 1995, James Marine completed the purchase of Paducah River Fuel Services, which added midstream fueling and grocery capabilities. At that point, with over 300 employees, JMI had branched into tug service; barge fleeting; diesel engine repairs and parts; wheel, machine, fabrication and electric shop work; and barge and boat repairs.
The year 2000 marked the first of several start-up companies geared toward diversification. JMI founded Paducah River Painting on the Tennessee River at Calvert City, giving the firm one of the largest and most modern barge painting and transfer facilities on the rivers.

Four years later, James Marine bought Walker Boat Yard from Ingram, doubling JMI’s capacity for shipyard boat and barge repair. As part of the deal, Ingram - one of the nation’s largest barge lines - signed a long-term agreement to buy much of its repair work from James Marine.

More diversification came in 2006, when JMI completed its first exclusive barge company acquisition by purchasing Paducah-based Tennessee Valley Towing from Bill Dyer. That gave James Marine eight boats and more than a quarter century of hauling chemicals, coal, steel, gypsum, salt and gasoline on the Tennessee River. Dyer said he at first wasn’t interest in selling, but later changed his mind because he knew the Jameses had the size, capital and ambition to grow the business.

Calvert City
Another growth spurt came last year when JMI opened James Built Specialty Vessel Construction next to Paducah River Painting at Calvert City. The new facility - longer than a football field - allowed the company to refurbish massive barges in assembly-line fashion, much like running a car through a carwash. The company currently is at full production building tanker barges for Ingram.

Paducah River Painting also began a multimillion-dollar expansion to handle larger hopper barges. Today the business refurbishes an average of 25 barges monthly.

James Built uses a patented, U-shaped conveyor system to pull barges from the river; sandblast and paint them in a self-contained facility with air filtration; and relaunch them. Having the new facility ended a long practice of painting barges on a dry dock or over the water.

By the end of 2007, JMI had added 100 barge-building jobs over the past 18 months as towing companies scrapping aging fleets to take advantage of soaring scrap metal prices driven by surging demand in China and other developing nations. Few barges had been built in the past decade, and shipyards were tying to replace about 1,000 barges being scrapped annually.

“What spiked our market was demand for steel,” James said, adding that the scrap metal worth of a typical barge has jumped from roughly $20,000 to $100,000 in the past four years. “It’s been more attractive for barge owners to do more scrapping.”

Also, with soaring fuel prices, river shipping has grown much more economical because a barge can haul many times more cargo than truck or rail, he said.

The future
James said there are good reasons to anticipate continued steady work building barges and towboats:
- Single-hull barges are being phased out by 2015, replaced by barges that have air compartments between two hulls.
- Many towboats are 40 to 50 years old, and tougher U.S. Coast Guard inspection standards take effect by 2010.
- Federal emission-control standards on engines will start in 2013, which means more and more older engines will have to be replaced.

“There is a tremendous demand for new equipment, and that’s primarily why we got into James Built,” James said.
James said the sluggish economy is a concern, and he has seen some softening in shipyard business in recent weeks. But JMI fortunately has large customers such as Ingram, AEP and United barge lines that continue steady business despite the economy, he said.

“We’re able to work off our long-standing relationships and build on that,” James said. “Without those main players, we wouldn’t be able to do any of this work.”

He said his company didn’t foresee the demand for scrap metal and, like all river industries, isn’t immune to economic swings. JMI was fortunate to have timed the market correctly, James said.

“Sometimes you time it well and sometimes not so well,” he said. “I’m really trying to make James Marine be known as thinking outside the box, so to speak.”

Joe Walker can be contacted at 575-8656.