Business Indiana 2015

Page 1

2 — Business Indiana, Friday, January 23, 2015

Inside While gas well drilling appears to be slowing down in Indiana County, jobs that support the industry are holding steady. Page 3 Three area men who are passionate about brewing beer are launching a company with plans to bottle and sell their suds. Page 7 Find a piece of local history at Roser Enterprises. Page 14

With a recent acquisition, Quintech Electronics continues to see strong growth. Page 15

The owners of Diamond Drugs hope a recent expansion of its facility will help its pharmaceutical packaging business grow significantly. Page 16

While high-density housing units continue to operate at near-capacity in Indiana, landlords are having a hard time filling smaller rentals. Page 18 County economic development leaders see good things on the horizon, and they hope the Windy Ridge development is the key. Page 22

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Chamber looks to year ahead By GREG SIPOS

Chamber of commerce chairman

A

s the Indiana County Chamber of Commerce looks ahead to 2015, I am confident the coming year will be one of great successes for Indiana County. Several projects and new developments, through the hard work and service of many in years past, will come to fruition this year. I am pleased to take the reins as the new chairman of the chamber’s board of directors. However, the shoes I have to fill left by outgoing chairman Bob Kane are large. Under Bob’s tenure in the past two years, the chamber made significant strides to improve, strengthen and grow. His dedicated service, effort and diligent commitment to the chamber and to Indiana County have made a tremendous difference moving forward. Thank you, Bob, for your outstanding leadership and passion for our community. Looking back over the past year, here are just few of the achievements that occurred within the chamber and business community: • Creation of the Business Hall of Fame

GREG SIPOS

• Creation of the Center for Internship • The addition of 89 new chamber members • The addition of several new member events, including Brains and Grains and Chamber Check-ins • The creation of a new Young Professionals Organization • A Corridors of Opportunity event with the Pittsburgh Business Times • The return of the KDKA Radio Morning Show to Indiana

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• The creation of a marketing video for Indiana County called “Think Opportunity: The Indiana County Story,” in partnership with the Indiana County Development Corporation. The video can be seen at the chamber’s new YouTube channel, www.youtube.com/indiana countychamber.com. The year concluded with one of our best chamber annual membership luncheons to date. More than 500 people attended the event Dec. 5 at the Kovalchick Convention and Athletic Complex. This year’s guest speaker was Maxwell King, president and CEO of the Pittsburgh Foundation. King gave a heartfelt speech about the importance of community and the unique character qualities in people that can only be found in our western Pennsylvania region. During the luncheon we also acknowledged the career contributions to Indiana County from retiring state representative and former Speaker of the House Sam Smith. In addition, we announced the first class of inductees into the chamber’s new Business Hall of Fame. The formal induction ceremony will occur this summer. The Hall itself will be housed at the Kovalchick Complex. The luncheon was a spectacular showcase for the chamber and Indiana County. The 2015 luncheon is scheduled for Dec. 4 at the KCAC. Now, as we look ahead to the coming year — the 103rd for the Indiana County chamber — many new initiatives, products and services are already underway. Some of the new efforts include: • Creating and distributing membership cards to all members. • Rolling out a more extensive member-to-member discount program. • Continuing to improve

our website. We realize many chamber members have not fully utilized the capabilities of the website. Call for any assistance you need related to the website or any member benefit. • Conducting the first Business Hall of Fame induction dinner. • Creating more member functions for networking, education and business-tobusiness connections. • Developing television public service announcements to market our member businesses and Indiana County. • Placing member promo videos on the chamber website and on YouTube. • Continuing to grow a strong regional presence for Indiana County through our marketing initiatives. The chamber will continue to work with the Indiana County Center for Economic Operations and the Indiana County Development Corporation to market and promote Indiana County toward the ultimate goals of job creation and improved quality of life. Additional pad-ready development sites are coming and we hope to hear major announcements in the year at the Route 119 Business Park in Coral-Graceton and the Windy Ridge Business and Technology Park near the Route 422 and Route 286 interchange. If you aren’t a chamber member, join now. New in 2015, we are offering a first-year introductory rate of just $199. You can enjoy the full benefits of chamber membership while helping us to enhance and grow Indiana County. Visit the chamber’s website, www.indianacounty chamber.com, to join today. And be sure to attend the chamber’s 2015 Business Expo on Jan. 31 from 10 a.m. to 4 p.m. at the Indiana Mall. We truly appreciate your support.

Business Indiana, Friday, January 23, 2015 — 3

Drilling on decline, but support jobs thriving You don’t have to drive far in Indiana County to see a natural gas well. That’s because there are more than 16,000 of them in the county. But in the past few years, drilling activity has slowed dramatically, a situation being watched closely by “gas patch� workers and the owners and employees of the many drilling support and service companies in Indiana County. Leaders of two trade associations for the gas and oil industry recently discussed the drilling slowdown, and gave some projections about when things may start to turn around.

L

ou D’Amico, president and executive director of the Pennsylvania Independent Oil and Gas Association, said the reason there is so little drilling activity in Indiana County now is natural gas prices. “Frankly, I don’t see a lot of increase for quite a while. ‌

I would say probably at least five years,� D’Amico said. In 2008, prices for natural gas were about $14 per 1,000 cubic feet. Prices in December were less than $4. The price has plunged in part because there is a tremendous oversupply of natural gas. “The problem in Indiana County is the conventional operations (shallow wells) are being hit the hardest, and that’s 99 percent of the drilling in Indiana County,� D’Amico said. “And it just doesn’t make economic

sense to drill at this point.� Some of the drilling activity has been migrating west into Ohio, in part because much of the natural gas there is “liquids-rich� in ethane, pentane, butane and propane, but also because the business climate is better there than in Pennsylvania, D’Amico said. But Indiana County remains a center for companies supporting the drilling industry. Many of those companies are focused on conventional shallow well drilling but D’Amico doesn’t anticipate those support firms will migrate west, too. “I don’t see that moving is going to help them much. Unfortunately, I think they’re going to be victims of these low prices for quite some time,� he said. Another problem is that the infrastructure — pipelines and compressor stations — needed to move natural gas to markets is far behind where it should be,

By RANDY WELLS according to D’Amico. “We have somewhere in the vicinity of 2,000 wells in Pennsylvania that have yet to be turned on line — they’ve been drilled and completed and are not on production yet because there is simply not sufficient pipeline capacity to get it out,â€? D’Amico said. “We think that will probably change around 2017. That’s the good news. The bad news is, until we create a far larger demand for natural gas in this country, that won’t necessarily help us. We need to get gas into New England obviously. That’s a huge market up there that’s definitely undersold. We just don’t have ‌ sufficient pipeline capacity to get the gas to New England.â€? It would also help if more residents converted their Continued on Page 4

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Continued from Page 3 heating systems to natural gas and if storage facilities for natural gas were expanded, he said. PIOGA has taken a proactive step to address the oversupply situation. “We have hired a full-time person just to work on natural gas market development,� D’Amico said. “PIOGA is the only state association in the U.S., to my knowledge, that has done that. We see that as a hugely important part of business and something that we need to be focusing on.� First and foremost among potential new markets for natural gas is the electricity-generating industry. “That’s going to be, I think, the largest market in the immediate future, in the next half a decade,� D’Amico said. He predicts there will also eventually be more of a demand for natural gas as some manufacturing returns to America from Europe and to Pennsylvania from southern states. Using natural gas to power vehicles could also be a large part of new markets when some infrastructure issues are resolved. “We still don’t have

GAS WELL PERMITS 600 500

•

400

•

300 200

• •

100

• 2008

2009

2010

2011

2012

•

•

2013 2014

Number of gas wells permitted in Indiana County, by year Source: Pennsylvania Department of Environmental Protection

enough refueling facilities in our state� for natural gas-powered vehicles, he said. “But where it’s happening it’s making a lot of sense,� for example, to power local delivery trucks and transit buses that return daily to a home refueling point. “One of the biggest challenges we look at right now is, frankly, from government,� D’Amico continued. “We have been hammered as an industry by ever-increasing regulatory costs and now we have a new administration coming in

swearing the best way to balance their budgets and cure all the problems they’ve created over the last five or six decades is by taxing us. The dollars aren’t there. You’ve heard estimates from Gov.-elect (Tom) Wolf that there’s a billion dollars he’s going to collect. Well, I don’t know where he’s going to find a billion dollars or anywhere near that out of this industry.� D’Amico said $300 million may be closer to “the absolute max� the Wolf adContinued on Page 5

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Drilling support jobs thriving Continued from Page 4 ministration can obtain from the natural gas drilling industry. “And that will be short term because when that happens, if it happens, you’re going to see a drastic decrease in activity in Pennsylvania,� and a loss of thousands of jobs, not only as drilling companies move west but also from layoffs in supporting industries and gas stations, convenience stores, restaurants and motels. “All those kinds of businesses are going to suffer if this industry has a major slowdown,� he said.

D

ave Spigelmyer, president of the Marcellus Shale Coalition, agrees the current slowdown in drilling is due to the supply and price of gas. “In 2008, we peaked at producing 182 billion cubic feet in Pennsylvania, about one-quarter of Pennsylvania’s natural gas supply. Today we’ll produce 16 bcf a day ‌ which is 20 percent of America’s natural gas supplies,â€? Spigelmyer said. “Pennsylvania has quickly become a leader in natural gas supply for the U.S. ‌ We do have a glut of natural gas in the market, and frankly, it’s a huge opportunity for us to focus on building demand here,â€? he said.

WELLS DRILLED 400 350 300 250 200 150 100 50 2008

2009

2010

Conventional wells

2011

2012

2013 2014

Unconventional wells

Natural gas well activity in Indiana County Source: Pennsylvania Department of Environmental Protection

“THAT’S AN area of focus for us, to try to get new infrastructure built, to be able to not only move gas to consuming regions but also to build market here in the commonwealth .� Dave Spigelmyer,

president of the Marcellus Shale Coalition Many of the things consumers use daily — steel, glass, plastics, chemicals, fertilizer, pharmaceuticals and electricity — are all produced through the use of natural gas, he said. And he agrees that

pipeline infrastructure is lagging. “That’s an area of focus for us, to try to get new infrastructure built, to be able to not only move gas to consuming regions but also to build market here in the

commonwealth for new manufacturing and new commercial opportunities for affordable energy,â€? he said. “It’s rewarding that we’re going into the winter of 2014-15 with natural gas prices half of where they were in 2008,â€? Spigelmyer said. “Consumers across Pennsylvania and our country are enjoying much more affordable energy as a result of shale being developed broadly ‌ across our country. That’s also creating enormous opportunities for manufacturing.â€? Compared to many foreign countries, “We have much more affordable energy now that provides us an opportunity, hopefully, to return manufacturing not only to Pennsylvania but to the U.S.â€? But, he added, the industry faces challenges in the commonwealth. “First of all, we need to make sure that Pennsylvania retains a position as a competitive place to park capital,â€? where exploration and production companies are willing to invest, he said. “That will be critical for Pennsylvania to be a leader in natural gas development long-term. “The impact fees today have already given skin in the game to nearly every municipality around PennContinued on Page 6

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Drilling support jobs thriving Continued from Page 5 sylvania where shale has been developed,â€? he said. The impact fee is paid to the state by drillers of unconventional natural gas wells. Through a complex formula, some of the fee money is retained and used by the state and some is distributed to counties and municipalities. Indiana County and its municipalities have received about $2.3 million in impact fee money. “Everyone’s talking about ‌ a need to do a severance tax,â€? Spigelmyer continued. “I would tell you that we need to get that competitive equation right. Our neighbor to the west in Ohio is certainly ramping up development. They ‌ don’t have a large severance tax on the books. In fact, our impact fee is about a 2 percent higher tax levy than their severance tax. ‌ We raise $60 million more a year than the West Virginia severance tax raises. So when folks say the industry is not paying its fair share, we pay the same taxes that every other business pays.â€? He predicts Indiana County’s key role in the drilling industry will continue to be as a center for drilling support companies. “There have been a ton of jobs developed through a

By RANDY WELLS

rwells@indianagazette.net

James Martini, an economist with the Pennsylvania Department of Labor and Industry, said that, according to first-quarter data for each year, drilling industry employment in Pennsylvania increased from 2008 to 2012. For the Tri-County Workforce Investment Area (Indiana, Butler and Armstrong counties), drilling industry employment peaked at a little more than 3,400 in first-quarter 2012, dropped to about 3,100 in firstquarter 2013 and was just under 3,300 in the first quarter of 2014. L&I economists do not yet have the data on what has happened to the employment numbers since April 2014. Martini said the core activities used in the data comparisons include actual well-drilling jobs and supporting activities such as site preparation jobs. The numbers are open to some interpretation, Martini said, because companies sometimes get more efficient at what they do and need fewer workers. “So there could be more economic activity with the same amount of people,� he said.

number of the companies that are active in your region and they’ll continue to grow as long as we continue to be an attractive place to grow this business,� he said. “That’s where the real opportunities are. I don’t see, in the next year or so, Indiana County receiving a large chunk of capital for drilling for natural gas development.�

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While drilling is down from 2012 in terms of the number of rigs in operation, the state has continued to grow production. In December there were 78 rigs active in Pennsylvania, down from almost 140 in 2012. “But we’ve actually increased rig count over the last two years or so,� in part by focusing on high-value gas, he said.

“There are wonderful opportunities that are budding as a result of shale,â€? Spigelmyer said. “I think we’re still very foundational in the development of the Marcellus. The Department of Labor has done analysis on the number of Pennsylvanians now working either directly in this industry or supporting this industry, and there’s over 230,000 Pennsylvanians engaged there. ‌ I think the opportunities are enormous. “I think it’s fair to say that Pennsylvania is going to be a leader in natural gas supply for generations to come, not just decades to come. I’m very confident that what we’ve found here is that special.â€? Spigelmyer said he often hears that the gas drilling industry is made up of “outof-staters.â€? “Around my board table nearly everyone is a Pennsylvanian,â€? and most of them enjoy recreation in the outdoors, he said. “Our focus is to make sure this gets done ‌ with rigor to the rules in Pennsylvania. ‌ Pennsylvania’s regulatory framework is one of the most rigorous in the country for oil and gas development.â€? The Marcellus Shale Coalition represents about 50 producer and pipeline companies and about 230 supply chain members.

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Aspiring beer masters brewing up batch of Levity By HEATHER BLAKE

hblake@indianagazette.net

L

ooking to serve the people of Indiana County with fresh, locally produced brew, three area residents are in the stages of opening the county’s first craft microbrewery in Indiana. For Jared Herman, Erich Walls and Luke McKelvy, of Indiana, co-owners of Levity Brewing Co., homebrewing has been a hobby, whether together or on their own. Herman and McKelvy started about 10 years ago, and about five years ago, Walls joined them. Now, they want to turn that passion into their dream business. “I guess all three of us have always dabbled in sort of entrepreneurial pursuits and things like that,� said Herman, Levity’s head

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PICTURED, from left, are Luke McKelvy, Erich Walls and Jared Herman. brewer and chief operations officer. “And it never really dawned on us to turn our love of beer and brewing beer into a business until about 2½ years ago.â€? They started to explore

that option, and, during a trip to Pittsburgh to get ingredients to ferment wine, McKelvy said he and Walls started talking about “how awesome it would be to Continued on Page 9

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Aspiring beer masters brewing up batch of Levity Continued from Page 7 start brewing.� “We talked about starting a business but we really liked the idea of the business not just being anything that would just get us to business quicker, but actually doing something that we loved to do, which was brew beer,� Walls said. “It seemed like a natural fit.� So the trio decided in August 2013 to “dive in,� Herman said, and formed Levity Brewing, which operates out of McKelvy’s garage in Indiana. They purchased the necessary equipment and started “tinkering and building different things to outfit� their setup, Herman said. Their operation still technically is homebrewing, but on more of a high-end scale — a “pretty elaborate setup,� Herman said. “We knew from the beginning that we wanted to buy

a system that would enable us to start brewing like pros on a really small scale,� McKelvy said. “That’s why we invested money in brewing it and kegging equipment, so we can really learn the craft itself.� “We are still homebrewers that are about to go pro,� he added. Ultimately, their plan is to provide local people with a local product. “That’s the idea: Brew lots and lots of beer in Indiana. We love Indiana, we want to stay local,� McKelvy said. “It seems like a matter of time before someone would move one of these (microbreweries) in,� Herman added. “It should be Indiana folks brewing for Indiana folks.� Herman said he told Walls and McKelvy, “Somebody from Pittsburgh is going to come here and build one of these.�

Herman, Walls and McKelvy can’t yet operate Levity Brewing as a business — they don’t have the licenses to sell their product — but they hope to be operating by June, McKelvy said. They gained visibility in the community by serving at last year’s Oktoberfest in downtown Indiana, offering samples to potential customers. “I’ve participated in Oktoberfest from both sides of the table, and it’s just as fun to pour beer for people and watch them enjoy it,� Herman said. They also have partnered with a friend who operates Trade for Freedom, a social business that sells goods to help provide freedom to men, women and children from exploitation. “Those sorts of events we’re very open to doing,� Herman said. “We can’t sell Continued on Page 10

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Continued from Page 9 our beer yet, so everything would be donated.” Currently, Herman, Walls and McKelvy usually brew only about 10 gallons at a time, though they could do 15, or a half-barrel, Herman said, “but we purchased a 10-barrel system, so we’ll be able to make 20 times what we could make here.” So far, they’ve developed 24 different recipes, 13 of them since July, including saisons (a type of pale ale), IPAs and stouts. They plan to refine those down to a top 10 list. Herman, who tries to “keep my finger on the pulse of what’s going on in craft beer,” said their ginger saison is probably going to be, “for sure, a flagship.” “Last year was the summer of saison. I tend to think that that’s going to continue, but I ... think we’re going to see a lot more spiced beers, and I think ginger is going to be one of the very popular spices used in brewing,” he said. They also have a stout that has judged very well in competitions, Herman said, and they hope to have that always available. Other beers in the works are a brown ale and a smoked licorice porter. Their IPA, “Confliction,” in November won a bronze

award at the 2014 Butler Homebrew BASH, organized by the Butler Area Society of Homebrewers. Herman said they plan to have it available all the time as well. Right now, the men are in the process of finding space where they will be able to operate on a commercial level. “Our plan and what we’re working at right now, is to find a location to lease, have our equipment delivered there, have a real, live brewing operation where we’re putting it into kegs and serving pints, putting it in bottles, and eventually a canning line,” McKelvy said. “We’re really shooting to go big with the microbrewery,” he said. The three are looking at having a tap room “where people can come sample and have a pint, and pick up beer to take home,” Walls said, adding that they hope to offer a range of varieties of beer “that’s going to meet everyone’s palate.” They also plan to offer wines from local vineyards. “It should be kind of a cool place where people will come and spend an hour very easily,” with possibly some live music every now and then, he said. “It’s going to be unique in the way, too, that it’s going to

bring something to the people of Indiana that they’ve never had locally here before,” Walls said. He said it’s hard to say how the interior décor is going to end up, but they’re looking at it being a “cool, rustic, possibly hip, trendy.” “It is about the experience, not only for the people who enjoy craft beer to come in and try something different, something seasonal, but it’s going to be unique in the way that it’s going to give people of Indiana a different experience that they can enjoy once a month, once a week, however often they want to show up,” Walls said. “We want to be a really fun place for Indiana folks to hang out, get great beer,” McKelvy said. And fun, literally, is in their name. “Levity means ‘lighthearted,’ ‘enjoyment,’ ‘humorous, in a sense,’” McKelvy said. “We thought about this a lot — what are you doing when you typically are drinking a beer? Often you’re with friends, sitting around the kitchen table or at a restaurant or at a bar, and you’re enjoying everybody’s company and enjoying fun conversation. We’re going for the celebration of life, the lighthearted enjoyment of Continued on Page 11

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Aspiring masters brewing up Levity Continued from Page 10 life.â€? “And the community aspects of it, too,â€? Walls said. “We’re pretty lighthearted guys,â€? Herman said. “There’s things, I think, I say that probably push the boundaries, but they usually bring people some sense of joy, I hope. ‌ Beer does that too. “It lightens people’s mood, and it opens people up to communicating. And I think humor does that.â€? “It’s kind of disarming and allows people to connect,â€? McKelvy said. One thing they are very serious about, however, is the quality of their product, as their slogan attests: “Serious beer for the light at heart.â€? The other is the business end of things. “We’ve been really serious about rigorously evaluating the business idea, not just ‌ running into this with our eyes closed,â€? McKelvy said. They’ve spent a lot of time with the Small Business Development Center at Indiana University of Pennsylvania, testing their idea, writing a business plan and “really challenging our assumptions about what we think it could be and how it’s actually going to work.â€? “So we’re taking a realistic approach to it; we don’t want to just rush into it and find ourselves in a really bad situation down the road,â€? McKelvy said.

“It’s been a sober, serious consideration, but we’re convinced that this is a great business opportunity, and it’s going to do great, and we’re going to really thrive in Indiana. We’re excited about it.� They have also gotten tips and pointers along the way from the Indiana Homebrewers Club, to ensure they were going about their endeavor the right way. “Those guys have a wealth of knowledge, and they are brewing good beer,� Walls said. “We appreciate those guys.

“OUR PLAN and what we’re working at right now, is to find a location to lease, have our equipment delivered there, have a real, live brewing operation where we’re putting it into kegs and serving pints, putting it in bottles, and eventually a canning line.� Luke McKelvy,

co-owner, Levity Brewing Co. They’ve embraced us.� Another facet of Levity Brewing is that the men want it to be a source of enlightenment about the beer their customers are enjoying. “The craft beer movement is pretty huge in America right now — and honestly, there’s an excellent variety of craft beer in town that one can get at any of the bars,� said Herman, a science teacher in Pittsburgh. “But we approach it as, this is our art, this is what we do. “As an educator myself, I’m really excited to educate people about what they’re tasting, what they should be looking for in their beers, how it’s made — you know, what is it that gets that flavor, that aroma. Just a lot of different things.� “There’s excellent beer in town, but no one’s making their own,� Herman added. “And fresh beer is the best beer.� “It’s like fresh-baked bread,� McKelvy notes. “No substitute.� Tying in to the education aspect for their customers, Herman said one idea might be to offer 80 beers from around the world, sort of a play on “Around the World in 80 Days.�

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“There are so many different beer styles. There are beer styles that are being rediscovered, that have kind of been lost to history,� he said. “It would be cool to take our customers through 80 different beer styles from around the world, our interpretation of those styles.� And the guys are always educating themselves on what’s going on in the beer and brewing industry as far as what’s trending, and keeping up on new brewing styles and techniques through reading up on the latest news, listening to podcasts and communicating among themselves. Twenty hours a week — some weeks more, Herman said — are devoted to thinking of and developing recipes, brewing, talking to their equipment manufacturer and discussing business ideas. “We’re always tinkering, exploring,� he said. While their plan is to initially self-distribute, the three do have growth on their mind as they gain contracts, intending to employ a lot of people and eventually branch out to serve western Pennsylvania. A company website is in the process of being developed, and they have created Facebook and Twitter accounts, both of which can be found by searching LevityBeer.

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14 — Business Indiana, Friday, January 23, 2015

Roser Enterprises marks 35th anniversary By ELLEN MATIS

ematis@indianagazette.net

HOMER CITY — Thirtyfive years ago, Chuck Roser started selling items out of the trunk of his car. Now, celebrating the anniversary Roser Enterprises, the business has expanded, selling worldwide. It evolved from a used furniture and fixture store to a “respected dealer” in vintage truck parts, demolition salvage, architectural antiques and historical relics. “It was just something I

had an interest in,” Roser said about the start of the business in December 1979. “It mainly started out in antiques (sales) … then expanded to used furniture, then to used store fixtures.” And it kept evolving — to the destruction of buildings and the salvage of the items within them and the sales of antique truck parts. The items Roser sells — from Mack B model parts to collectible toys to vintage and salvage items —

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HOMER CITY — The warehouse of Roser Enterprises along West Elm Street in Homer City is home to many local reclaimed pieces. Owner Chuck Roser said that some of the pieces are “unusual” and are just “waiting for the right buyer. Online or by appointment, find: • Ornate pressed tin vent covers salvaged from a Johnstown church in “as-found” condition. The vent covers have multiple layers of paint and some edges have small bends that can be straightened. • An antique oak door from the former Homer City Bank. It’s a 1910-era door with 1930s lettering on the textured privacy glass. It has brass hardware. • Also from the former Homer City Bank, the warehouse holds the bank’s night depository unit. The unit dates to the late 1930s and features a heavy brass faceplate and brass rotary drum built into a cast-iron housing. It has a functional key and is operable. It weighs between 200 and 300 pounds. • A cast iron coal bin door from C.S. Kunkle Lumber Co., circa 1887 from Homer City. According to the website, it is possibly a one-of-a-kind prototype that was never put into production. It was salvaged from a Montgomery Ward kit house built in 1912 in Homer City. • The last remaining signage from Coyne’s Pub, a former landmark restaurant in White Township. The plexiglass panels stood in the lighted parking lot entrance at Stutzman Road and they date to the 1980s.

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Business Indiana, Friday, January 23, 2015 — 15

Quintech big player in electronics By ELLEN MATIS

ematis@indianagazette.net

Y

ou’re watching the big game on your TV or mobile device. Maybe you’re streaming it live through your television provider while you’re on the go. While you’re watching, that data is being sent from the field, received by a satellite, collected and distributed — probably (almost certainly) with a transmitter (through a matrix switch) developed, designed and manufactured by Quintech Electronics in White Township. And that’s the case for virtually anything you use with data that comes from a satellite for the distribution of content: radio, television and Internet. “Quintech Electronics and Communications Inc. is a worldwide leader in satellite RF (radio frequency) distribution products for broadcast, satellite, cable and government purposes,” according to CEO G. Daniel Prushnok. Quintech was founded in 1989 in the Indiana County Small Business Incubator on the Indiana University of Pennsylvania campus and incorporated that same year in Indiana. It is now located along Airport Road in White Township. According to its website,

the company is a controlled systematstate-of-the-art deic environment. signer and manuQuintech sells to facturer of RF signal more than 100 counmanagement comtries worldwide and, munications equipin 2013, acquired a ment and globally company outside of distributed. Frankfurt, Germany Prushnok said — DEV SystemtechQuintech provides nik GmbH & Co. solutions to “virtuThe company alG. DANIEL ally every broadlows Quintech to PRUSHNOK caster, satellite disnow offer a range of tributor and major fiber-optic products, network operator,” such as Prushnok said. With the acquisition, DirecTV, NBC, ABC, ESPN and Comcast. And, he said, Prushnok said in a press reQuintech sells satellite lease that the company can switches and other products provide a full suite of radio to wireless telecommunica- frequency products, includtions companies such as ing matrix switches, routing AT&T, Verizon, Nokia and switches, splitters and combiners, amplifiers, LNB Erikson. The company’s RF Matrix power supplies, RF over fiber Switches make up about 60 transmitters and receivers, percent of its sales, Prush- and optical splitters and combiners. nok said. With the acquisition of A Quintech matrix switching system can be used DEV, Quintech has about 115 by broadcast cable and satel- employees, 60 of whom lite companies to distribute work in Indiana. Prushnok said that an oncontent. The matrix switch is also line presence is very imporused by network equipment tant for the company. “Due to the nature and managers and mobile device makers while they develop type of products that we and test their solutions. The make … (sales) usually start device allows the switch of online,” he said. Then, the an input to any outputs in a sale is usually negotiated.

“We do a lot of commerce via our Quintech web page,” which can be found at www.quintechelectronics. com. Quintech is a unique business in that it does not recirculate money in the local economy. “A big benefit to the community is that, since we don’t sell hardly anything locally … every dollar Quintech brings in … is a dollar that came from outside to Indiana.” As time goes on, technology will continue to change, and Prushnok said Quintech will continue to look for growth areas. “A big growth driver is 4G LTE, LTE Direct — new platforms being rolled out by the major wireless service providers to improve quality of service and improve data speeds by incorporating new technologies such as DAS (Distributed Antennae Systems) and other small cell technologies,” he said. “As more and more content flows over a smaller phone, more and more (of Quintech’s products) will be needed to handle the amount of data.” In addition, Prushnok said that the company will continue its growth in fiber optics, “given the superior ability for fiber optics to handle larger and larger data,” with the addition of DEV products and technology.

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16 — Business Indiana, Friday, January 23, 2015

Expansion will help Diamond Drugs grow By MARY ANN SLATER news@indianagazette.net

D

iamond Drugs officials have high hopes that a recent expansion project will lead to a big boon for their drug repackaging business. This past fall, an 11,000-squarefoot building was renovated for RemedyRepack, a wholly owned subsidiary of Diamond Drugs Inc., on the campus in the Indiana County Commerce Park along Kolter Drive in White Township. Most of RemedyRepack’s operations have now moved from their original 1,500-square-foot site into the remodeled quarters, said the subsidiary’s president, Mark Zilner. The new space was once the home of Biocontrol Technology. “This is very exciting for us,” Zilner said about the $1.2 million renovation project. “Currently we distribute 1.5 million packages (of pharmaceuticals) a year. Our thought is that we will quadruple that in the next few years.” RemedyRepack, which is registered with the United States Food and Drug Administration, is a repackager of pharmaceuticals.

TOM PEEL/Gazette

SAMANTHA JOHNSON opened bottles of pills and put them into a machine before they are boxed for delivery at Diamond Drugs. In business since 2006, the company packages and distributes stock medications to nursing homes, state correctional institutions, clinics, state agencies and sports teams on both the professional and collegiate levels. Typically, these stock medications are

taken from bulk packaging and distributed into smaller containers that can be more easily used by the clients RemedyRepack serves. While pharmacies must package pharmaceuticals for a given patient, RemedyRepack can package, for example, a month’s supply of a

given drug in a stock bottle for a clinic or nursing home or doctor’s office. In turn, those offices can distribute the medication to patients without having to maintain their own pharmacy. The genesis for RemedyRepack actually came in the early 2000s, as Diamond Drugs officials were evaluating the way the company did business. At that time, Diamond Drugs was already selling to state correctional institutions and nursing homes across the region but it was not doing its own repackaging. Instead it contracted out to a third party that would package the company’s drugs for sale to various offices. It could not do its own repackaging because those operations required licensing approval from the FDA, approval that Diamond Drugs didn’t have at that time. After using a middleman for five years, company leaders decided a change was in order: “We would become our own repackager,” Zilner said. “At our volume, we decided it would be financially beneficial for us to package on our own. Some of the third parties we were working

with had a hard time keeping up with our volume.” Becoming a drug repackager is no easy task, however. “It took us four years,” Zilner said. “(The process to become a repackager) is very structured according to FDA regulations. “You are required to have approved practices and procedures, repacking techniques and quality controls that meet FDA specifications.” “It puts you in the same (FDA) classification as a drug manufacturer, and that is more than a pharmacy has.” The FDA gave its final nod to RemedyRepack in 2006. From then until last fall, its repackaging operations were staged in 1,500 square feet of space. Zilner said the enlarged quarters will spur business growth in several ways. “The new location will allow us to have more capacity to grow our current market and to open new ones. It will allow us to go after larger accounts.” Currently, RemedyRepack ships drug packages to 44 states via Continued on Page 18

Business Indiana, Friday, January 23, 2015 — 17

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18 — Business Indiana, Friday, January 23, 2015

EVERLAST INSULATION CELEBRATES 10 YEARS The once two-person business is now the area’s only Owens Corning Certified Energy Expert HOMER, Penn.—In just 10 years, Everlast Insulation, Inc. has grown from a father and son operation to two full crews, and the area’s only Owens Corning Certified Energy Experts. “In the beginning, my dad, Dan Steffey, Sr., and I installed during the day, and I spent the evenings visiting homes for estimates,” said Dan Stefffey, Jr, founder. “Now we have two crews and our installers are certified by Owens Corning.”From the beginning, Everlast Insulation has been a member of the Blow in Blanket Contractors Association, and the company’s employees are trained and certified by the Blow-In-Blanket Contractors Association to be experts in installation. Everlast is the area’s leader for retro-fit and new construction insulation installation with plans to add another crew to match demand. “We’re a family business, and we’ve always put the families we serve first, so quality is a priority,” he said. “That philosophy has helped us grow.” Everlast Insulation is the only business in the area with the Owens Corning Certified Energy Expert distinction. As CEEs, they receive extensive training to insulate for the local climate as well as identify energy problems and solve them with Owens Corning products. “We are the only ones in the area able to offe er a guaranteed combination of money-saving energy expertise, backed by a 10-year warranty on products and installation. It’s the best warranty in the insulation industry,” Steffey said. Among the newest products offered by Everlast are Owens Corning products, including Ecotouch™, dense pack insulation, and blown in blanket insulation. Each product offers high R-Values, the measurement used to determine the efficiency of insulation. Everlast Insulation offers homeowners free estimates. “Energy prices are rising and will continue to do so, therefore the sooner you improve your home’s energy performance, the sooner it pays for itself,” Steffey said. About the Certified Energy Expert Program The Owens Corning Certified Energy Expert Program focuses on thermal performance, moisture prevention, air filtration, ventilation and energy auditing for maximum energy efficiency. By gaining a thorough understanding of building science, Owens Corning Certified Energy Expert professionals can identify the unique and complex ways air, moisture, heat and cold interact within a home’s walls, roof and interior space. Certified Energy Experts offer an exclusive 10-year limited warranty covering products and installation. The Owens Corning Certified Energy Expert® program received the Gold Award for “Best Customer Support Program” in the Hanley Wood 2014 Brand Builder Awards. Hanley Wood is the premier inffor o mation, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. The Brand Builder Awards recognize the most innovative and effective marketing campaigns throughout the residential and commercial design and construction industries.

Expansion will help Diamond Drugs grow Continued from Page 16 FedEx and United Parcel Service, and delivers some packages within Pennsylvania with its own vehicles. In the past, RemedyRepack had done limited repackaging of liquid and injectable pharmaceuticals, but Zilner hopes the new building project, and some added new technology, will help the company expand those markets. He is also eyeing a possible increased distribution of penicillin for RemedyRepack. Under FDA regulations, pharmaceutical repackagers must maintain a separate physical space, with its own separate airhandling unit, for processing penicillin. Zilner said the FDA mandates that penicillin be processed apart from other drugs because of concerns with contamination or cross-allergens. So while most of its repackaging procedures have moved to a new locale, RemedyRepack will now use its old smaller site for repackaging penicillin. “There aren’t many that repackage penicillin. It will give us an edge in the market.” With its expanded facility, RemedyRepack has hired about 10 new workers for its operation, bringing its total workforce to 37.

“THE NEW location will allow us to have more capacity to grow our current market and to open new ones. It will allow us to go after larger accounts.” Mark Zilner,

CEO of Diamond Drugs

“As we grow into additional markets, it will allow us to add more employees in Indiana County,” Zilner said. Diamond Drugs is a family business, owned by Joan and Gilbert Zilner for more than 40 years. The business began as a pharmacy in downtown Indiana and eventually moved to its White Township location as it began to sell medicine to state correctional facilities and nursing homes in the late 1980s. It now has about 950 workers, making it one of the county’s largest employers.

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Business Indiana, Friday, January 23, 2015 — 19

High-density housing finds appeal with students By SEAN YODER

syoder@indianagazette.net

T

he student housing market in Indiana continues its trend toward high-density apartments that took off in 2006 with the introduction of zoning changes in the borough and the groundbreaking for Indiana University of Pennsylvania’s residential suites. Dick Clawson, executive director of the ArmstrongIndiana Homebuilders Association, said this swing from traditional neighborhoods to more modern, high-density housing has taken its toll on owners of the older houses in the borough. “A lot of the older dwellings within, let’s say, a four- or five-block radius of IUP were single-family dwellings. People would buy those and rent them to students. And that was the population of student renters.� He said when the first twoand three-story buildings went up, starting with Wyoming Hall along Oakland Avenue, students started becoming more selective. Now, he said, amenities such as workout facilities and pools have made the older houses unattractive, often causing them to remain vacant. And, with these high-density buildings, students don’t have to cut the lawn or shovel the sidewalks. “I think students today feel privileged.� “I’ve had parents pay double so a kid could have a room by himself. The kids are expecting a lot more now. The parents are demanding a lot more now.� Clawson is the volunteer manager of the Sigma Chi fraternity house, which he helped to found when he was a student at IUP in the late 1960s. He said construction of the suites on campus — with nicer, more spacious living areas — have further reinforced the notion that students now expect more and that parents will pay more.

“That whole thing has changed the dynamics of student rentals,� he said. Construction of IUP’s $245 million housing project started in 2006. But despite the student population stagnating for a few years and the brand-new on-campus suites, business still appears to look good for the private apartment developers. About 35 apartment buildings exist for IUP students in Indiana Borough and White Township, not counting houses that have been converted into multiple units. Representatives for University Square, with locations near campus on School and Grant streets, reported they generally see 100 percent capacity. Officials for Crimson Court Townhouses, at the corner of School and South Seventh streets, reported that they had 100 percent capacity last year and are already at 100 percent for this year. Officials at Philadelphia Square and The Apartment Store did not return calls for comment. Developers of the Copper Beech apartment complex, owned in part by Campus Crest, plan to add 96 beds in four buildings in the coming

year at their location behind Regency Mall. The plan also includes an additional 103 parking spaces. Campus Crest is also the parent company of The Grove apartments along Medlar Drive, built in 2013. Indiana is one of only six locations in the U.S. where Campus Crest has built multiple housing complexes. Campus Crest will be building another set of The Grove apartments in Slippery Rock and has already built a set of apartments near State College. High-density living space developers were given a boost in 2006 when the borough enacted the nowabandoned traditional neighborhood development overlay zone. The goal of the TND zone was to condense student rentals to areas immediately surrounding the university campus. Some residents said this resulted in “spot zoning� and that traditional families caught in the zone were unhappy living next to highdensity apartments. Others said the overlay zone was ruining their property values. Councilman Richard Thorell, who chaired Indiana Borough’s community develContinued on Page 21

“I THINK students today feel privileged. I’ve had parents pay double so a kid could have a room by himself. The kids are expecting a lot more now. The parents are demanding a lot more now.� Dick Clawson,

executive director, Armstrong-Indiana Homebuilders Association

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High-density housing finds appeal Continued from Page 19 opment committee when the TND zone was repealed, said it was a “gigantic failure.� Borough council voted to lift the TND overlay zone in July 2013. Inside the campus boundaries, out of reach of borough ordinances and zoning, IUP’s housing is divided into two categories: suites and traditional residence halls, though the latter is now nearly extinct. In IUP’s long-range facilities master plan, the university intends to demolish University Towers and McCarthy Hall, which sleep about 130 and 150, respectively. University Towers is IUP’s sole apartment building. In the six- to 10-year range, IUP intends to renovate the older Elkin and Whitmyre halls. The suites contain 3,500 beds in eight buildings, giving the school the ability to house about 25 percent of the entire undergraduate student body. The other residence halls account for another 1,000 beds. Michelle Fryling, director of communications at IUP,

said IUP’s housing has been above 98 percent capacity since 2002. Currently, the university is managing its capacity in a way that reflects their enrollment, Fryling said. There are plans to explore the possibility of nontraditional student housing on campus, but there are no details on what that may look like. As for the older student rentals, Clawson said their future is uncertain. “They’ve been beat so badly that an investor is going to have to spend a lot of money to bring them up to speed. If they can’t make it a family-friendly neighborhood, who’s going to live there? Students aren’t going to live there.� H. Pat McDonald, former president of the now-dissolved Indiana County Board of Realtors, said it can be difficult to place a family in a traditional home, but wasn’t convinced that more homes were sitting vacant than in the past, she said. “It changes so much,� she said, referring to student population. “We have people

who are always coming and going.� She said there is always a need for properties. McDonald has been working in the region for about 20 years and made a permanent switch to Indiana in 2010 when she transferred to the local Howard Hanna

branch. “Our experience has been when you are looking to find a three-bedroom or fourbedroom (house in the borough) for a family that wants to move here that doesn’t have the money, or is deciding where to live, it’s difficult to find a house for them.�

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22 — Business Indiana, Friday, January 23, 2015

Officials: County thriving amid economic growth By SEAN YODER

syoder@indianagazette.net

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ocal officials and organizers are optimistic about Indiana County’s future, saying the county has the ability, through quality of life, and opportunities, with the development parks, necessary for economic growth. “From a business perspective, I think Indiana County is doing very well,” Jim Struzzi, president of the Indiana County Chamber of Commerce, said in a recent interview. He said storefronts in downtown Indiana fill up very quickly, and the space Furniture World once occupied in the Indiana West Plaza along Philadelphia Street near Shelly Drive didn’t stay vacant very long. “I think even if you look at some of our other small towns in Indiana County, they’re doing very well,” Struzzi said. “A lot of people are moving to Indiana County because of our quality of life and our opportunities here.” He said the quality of life in the county isn’t something you can necessarily get in more urban places, that the small-town atmosphere and sense of community is important to a lot of people. Public parks such as Yellow Creek State Park also provide a draw as businesses look for healthy places for their employees can live. He said the video the chamber of commerce produced will show people that “Indiana County is open for business.” “To let them know, if you come here you will be supported and you will have the opportunity to be successful. You’ll have a county team that’s behind you 100 percent.” Struzzi and Byron Stauffer, executive director andthe Indiana County Office of Planning and Development, both touted the Windy Ridge Business and Technology Park along Route 286 in White Township as an opportunity to attract busi-

Top 10 employers The 10 largest employers in Indiana County: 1. Indiana University of Pennsylvania, Indiana: 1,655 2. Indiana Regional Medical Center, White Twp.: 1,300 3. Diamond Drugs Inc., White Township: 923 4. Peoples Natural Gas Co., White Township: 700 5. First Commonwealth Bank, Indiana: 675 6. Indiana Area School District: 545 7. S&T Bank, Indiana: 503 8. Indiana County Court House, Indiana: 482 9. Blairsville-Saltsburg School District: 435 10. Walmart Super Center, White Township: 360 Source: Indiana County Chamber of Commerce

“WE’RE STILL placing a focus on job retention. It’s the companies that we have here that are going to be the main thrust of our economic growth.” Byron Stauffer Jr., planning office

“A LOT of people are moving to Indiana County because of our quality of life and our opportunities here.” Jim Struzzi, chamber president nesses to the area. Stauffer said his mantra with Windy Ridge has been, “if you build it, they will come.” The 200-acre site, which is owned by the Indiana County Development Corporation and whose only current tenant is Creps United Publications, was divided into eight lots in December. Plans for a final site plan that would establish the development’s streets and sewer system were approved by the White Township Planning Commission on Jan. 13. Already the ICDC is working on grading the next phase of development. A large water tank and waterlines have already been installed.

If and when the site plan is approved, bids for the development of lots 1, 2, 3, 4 and 9 could be put out as early as February, Stauffer said. The work will call for the creation of a private road on one contract and underground utilities and stormwater on another. Work could commence as early as March or April. Stauffer said it is imperative that the Windy Ridge development have lots that are ready to attract businesses. Already, though, the county is “aggressively” marketing the site, and the county as a whole, at trade shows and through marketing materials to target companies. Stauffer said he is guided by two Continued on Page 23

Business Indiana, Friday, January 23, 2015 — 23

Officials: County thriving amid economic growth Continued from Page 22 principles: to create family-sustaining jobs, and to increase capital investment and the tax base. He said they have declined some business prospects in the past because they don’t meet both of those criteria. The county is also cooking up a new real estate website that will allow local landowners to post their properties. That site will then connect to external websites to give the county a national presence. “We’ve had some inquiries from our efforts,� Stauffer said. He said he hopes to begin negotiating with some of the prospects, which he declined to name, as soon as construction is finished on the development sites. “We’re encouraged by the level of interest we’ve had so far,� he said. With the possibility of private development by Mario Luther across Route 286 from Windy Ridge, Struzzi said, “I think you could see that area out there really blossom.� But Stauffer and Struzzi are concerned with more than just attracting new business to the county. They want to make sure that current local businesses are thriving and getting the resources they need. “We’re still placing a focus on job reten-

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tion,� Stauffer said. “It’s the companies that we have here that are going to be the main thrust of our economic growth.� Stauffer said he wants to work with startups and grow them into mature companies. One way the Center for Economic Operations does this is the revolving loan fund, designed to advance projects that will create or retain jobs, according to the CEO website. The Small Business Incubator in the Robertshaw Building along South 13th Street is a way for startups to get low rent and access to other resources to help them survive their first few tumultuous years. Some improvements to the Jimmy Stewart airport could also open up more economic opportunity by attracting clients who want to fly in on smaller aircraft. The area around Airport Road has been dubbed a Keystone Opportunity Zone. Currently the airport lacks GPS-based landing equipment necessary for landing in inclement weather. Work finished up there on a new 5,500-foot runway in 2013. Next, some trees must be removed. “All of these things are kind of coming together now. It’s going to be fun to see where we are five years from now,� Struzzi said.

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More Information: Join us for our annual Day of Dance celebration to laugh, play, and learn on Saturday, February 28th at the Indiana Mall. Learn about the latest advances in the prevention, diagnosis and treatment of heart disease, as well as other leading women’s health issues. Important screenings and health assessments for women will also be offered. Log onto www.indianarmc.org to find out more about Indiana Regional Medical Center’s Day of Dance!

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