Steeled for success

Composite cylinders are on the verge of breaking into the U.S. market, but the propane industry isn’t exactly steeling itself for the impact. The cylinders offer a host of advantages over the traditional steel — including a lighter weight, translucent material and a potentially more attractive and ergonomic design — but they are perceived, for now, by many industry leaders as a niche item that will appeal to a small segment of consumers.

10# and 20# cylinders from Lite Cylinder Co.

Their higher cost, those leaders say, will mean most grill owners — who are the initial target audience — will stick with what they have. When confronted with a choice on retail shelves, they will choose the steel cylinder that’s projected to be at least 50 percent cheaper than the new composite option, despite its attractive features.

“If it looks pretty and it’s nice and it’s cool because it has a handle built in, some people will buy it,” allows valve manufacturer Cavagna North America Inc.‘s John Edden, who sits on the Technology and Standards Committee of the National Propane Gas Association.

But until the composite cylinder is permitted indoors to fuel a cabinet heater or other appliance, Edden and others predict, it will remain a novelty for one-upping the Joneses.

Report predicts broad market acceptance of composite cylinders

Anticipating approval

Two companies—Ragasco Composites of Norway and Lite Cylinder Co. outside Nashville, Tenn.—are awaiting word any day that the Department of Transportation has approved the shipment and sale of composite cylinders. DOT granted both companies exemptions in 2003, followed by plant inspections and independent testing by a Milwaukee laboratory.

Ragasco made the first push for approval in the United States, with John Neumann Jr., and his Hilton Head, S.C.-based JNS Enterprises Inc. acting as its American agent.

Neumann, a 32-year veteran of the propane industry who worked to introduce the overfill protection device into the U.S. market, is helping the Norwegian manufacturer navigate the murky seas of DOT approvals.

Fiberglass fibers are wrapped around a mandrel vertically (above) and horizontally (right) for durability.

“It will give the industry an opportunity with a new product to be able to go out into the marketplace and sell a product that the industry and marketplace has never really seen or used,” Neumann says.

He rattles off the list of advantages, including:

• grill owners can see through the cylinder to determine the liquid fuel level,
• plastic casings will never rust and are easy to clean,
• they are lightweight and consumer-friendly,
• and large companies can get their logos stamped into the outer casings for increased brand recognition.

His display at NPGA’s Southeastern Convention and International Exposition in Atlanta in April generated “an unbelievable response of interest,” Neumann said. “We had a cylinder filled with water, and literally people were amazed at what they could see without a light on or anything.”

Once the fibers are wrapped around the base, they are saturated with resin. (Photos courtesy Lite Cylinder Co.)

He has seen some interest in presentations to grill manufacturers, including Weber-Stephens Product Co. (Weber), and specialty stores, mass merchandisers and other distributors.

“Ragasco is working very closely with grill manufacturers to get their cylinder as close as possible to fit into present and future grills,” Neumann says.

Weber, which reportedly told Manchester Tank this fall it would no longer include a standard 20-pound steel cylinder with its grill sales, is listening, but not biting. Chris Childers, manager of regulatory affairs for Weber, is not convinced the composite version will replace the standard 20-pound cylinder, in part because the capacity is slightly smaller at about 18.5 pounds.

DOT exemption process smoothed with template

“I think it’s still pretty much in the investigative stage,” he says. “There certainly are advantages to it.”

Neumann forecasts interest among consumers in the high salt corrosion markets, where rusting is a problem for steel. The composite material, which is produced by Toledo, Ohio-based Owens Corning, won’t rust. He predicts those buying high-end gas grills or outdoor patio heaters, fireplaces or mosquito traps will prefer the composite cylinders.

He hopes he can encourage propane retailers to sell the composite cylinders to generate repeat business. When customers hear the features explained, Neumann thinks, they will be willing to pay more.

“When they see the features and benefits, I think it’s going to sell,” he says.

But he acknowledges Ragasco, the largest manufacturer of composite cylinders in Europe with customers like BP and Shell, isn’t likely to make a large dent in cylinder sales here.

The resin-coated, fiberglass-wrapped cylinders are pressure-tested with air to ensure they are suitable for propane use.

“It’s very hard to predict. I think if we can get five or six percent of the industry or the market, I think they’ll be very, very happy,” Neumann says.

New players

Meanwhile, a stable of former Manchester Tank executives are hoping to parlay their knowledge of the cylinder industry into plastic — something that excites former Manchester chief Darrell Reifschneider and makes him laugh.

“It’s (essentially) a plastic cylinder glued together,” Reifschneider says with a chuckle. “To an old-time cylinder guy, that can’t happen.”

Ragasco safety features

Reifschneider, who left Manchester Tank in August 2000 after selling the family business to McWane Inc., said he had investigated composite cylinders while still at Manchester. After he left the company, he examined the technology a little more and liked what he found.

He recruited Ben Sampson, the former vice president and manufacturing manager for Manchester, to be president, and Shelley Moeller, who was vice president of sales, to be executive vice president. They called the company Lite Cylinder Co. because the cylinders are lightweight and translucent.

Reifschneider, who serves as chief executive officer, said the company has leased a manufacturing facility that will assemble the Westernized finished product with pressure vessels imported from Sweden’s Composite Scandanavia. Lite Cylinder owns the patents and marketing rights for sales in the U.S., Canada and the Caribbean. The high-tech facility will employ just 10 people on three shifts, with robots performing much of the labor.

Ragasco product description

Despite its advantages, Reifschneider predicts the market will be comparatively small, aiming for the upper-middle-class to upper-class backyard grillers who buy grills in the $450 to $2,000 range.

“You’re not going to sell anyone a $60 cylinder on a grill that will cost $129,” he says.

Still, the economics are such that he can turn a nice profit by selling 150,000 to 200,000 units a year. He is not banking on indoor use of composite cylinders.

“We have no illusion of grandeur of building this thing by the millions,” Reifschneider says. “A few hundred thousand a year becomes a good business venture.”

Denting steel cylinders

While there may be some interest among consumers, those in the steel cylinder industry say they are not worried. Worthington Industries of Columbus, Ohio, says customer interest in the composite propane cylinders has prompted it to study the possibility of adding a production line. However, it appears cost-prohibitive for now, says Matt Lockard, vice president of marketing.

“Composite technology is something Worthington has evaluated for the past several years, actually, and we continue to look at it as our customers have had interest in this, and we continue to look for opportunities to meet our customers’ needs,” Lockard says. “Right now, given the cost of the current technology, frankly we don’t see it having a large impact on our markets but we continue to look at it.”

That said, Steve Gentry, the company’s regulatory affairs manager and a member of the NPGA’s Technology and Standards Committee, says, “the writing’s on the wall.”

That’s because composite cylinders offer one very big advantage over steel – they are used successfully indoors in a host of appliances that could very well catapult the propane industry into new markets.

They are approved throughout Europe, Asia and in New Zealand for use with propane-fueled cabinet heaters because they do not BLEVE — the acronym for Boiling Liquid Expanding Vapor Explosion commonly pronounced “blevy.” Steel cylinders have been prohibited from indoor use for years because of the catastrophic damage they cause should propane leak — the resulting explosion sends shards of metal sailing with a tremendous force that would be fatal to residents or responding firefighters.

However, composite cylinders do not explode. Neumann says they act as their own relief valve by slowly opening up so the gas seeps out and burns in a controlled manner.

“It becomes more like a blowtorch, but they can handle that,” Neumann says of firefighters.

Precisely how composite cylinders react to leaks and fire is the subject of an upcoming research project by Battelle Memorial Institute under a grant from the Propane Education & Research Council. Battelle plans to study that issue this fall once it completes another portion of its study of composite cylinders on code and market acceptability.

Its report on the market potential, issued in January 2003, offers a promising look at how composite cylinders could transform the propane industry. In fact, nine out of 10 users of 20-pound cylinders said they would consider purchasing a composite cylinder for its many benefits. Many survey participants indicated they would pay as much as $50 for a composite cylinder. (For more on this market survey, see the related story .)

In the meantime, Battelle is studying codes and usage of composite propane cylinders in countries around the world to determine whether they can be applied in the United States. A report is expected this month, said Rod L. Osborne, Batelle’s associate manager of Applied Energy Systems and the project manager.

Even though the cylinder might not BLEVE, Worthington’s Gentry sees other safety issues. For example, he thinks Americans might have trouble with the European-style connections. He also thinks cylinders destined for indoor use should have unique connections that would not allow them to be interchanged with steel cylinders. In addition to preventing an indoor BLEVE, new valves could require specialized training, ensuring a more accurate fill and preventing accidents.

“I’m one of the believers that we might need to have multiple tees or things that happen in this connection so, potentially, every Tom, Dick or Harry can’t fill this thing unless they’ve been properly trained,” Gentry says. He also would like to see carbon monoxide detection and tip-over protection on cylinders.

Cavagna’s Edden agrees that precautions might be necessary. He says Europeans have few accidents with indoor use of propane because their cylinders are mostly control-filled on computerized, carousel scales that fill each cylinder by weight. He echoes Gentry’s call for unique connections to ensure that steel cylinders cannot be used indoors.

“To me, that’s the answer,” Edden says. “That will make the system safe.”

Moving indoors

Indoor use of propane might be the goal in the propane industry’s work with composite cylinders, but its approval could be as much as six years away. Neumann predicts the National Fire Protection Association could include codes for indoor cylinders as early as the 2007 edition, but Denise Beach, codes and standards engineer for NPGA, thinks that is premature.

Proposals for the 2007 edition are due to the NFPA 58 technical committee by this May, which is too soon for the various NPGA and PERC committees studying the issue, she says. It is more likely they will have proposals to submit by May 2008 for the 2010 edition.

When that happens, the industry is eager to break into markets previously cornered by electricity and natural gas. But until that date gets closer, many in the industry are containing their excitement.

“Generally we feel the market (for outdoor use) is not going to be overwhelming — certainly not what it’s going to be if we get indoor use approved and, connected to that, indoor appliances approved,” says Edden, of Cavagna. “Then we’ve got a different situation. Then we’re talking much, much bigger numbers.”