3711 Mill Street, Wabash, IN, USA 46992-7778

Phone: 260-563-2111 • Fax: 260-563-8979

www.thermafiber.com

VIA EMAIL

June 30, 2011

Ms. Madeline Barch

Office of Policy

Regulatory Management Division

U.S. Environmental Protection Agency

Ariel Rios Building, Mail Code: 1806A

1200 Pennsylvania Avenue, N.W.

Washington, D.C. 20460

RE: SBAR Panel – Economic Impact of Draft Proposed Regulation Changes to Thermafiber

Dear Ms. Barch:

Thank you again for allowing me to speak at the June 16, 2011 SBAR Panel meeting and to convey my 

concern regarding the draft proposed regulation changes recently presented to us by EPA. This letter 

expands upon my presentation and provides more details specific to Thermafiber with regards to the 

financial burden that will increase as we attempt to meet the proposed emission limits.

Thermafiber, the company, was formed in 1996 when the assets of three mineral wool plants (i.e. 

Wabash, IN; Birmingham, AL; and Tacoma, WA) were sold from USG Interiors, Inc. to private investors. 

This was done in advance of the original MACT promulgation in 1999. The Birmingham plant closed in 

2000 and the Tacoma plant closed in 2002. Only the Wabash plant remains in operation and has been 

since its original start date in 1935.

Four private equity groups have owned Thermafiber within the last 15 years. From 1998 until 2002, 

Thermafiber operated in conjunction with American Rockwool, Inc., a privately held company with 

mineral wool plants in Spring Hope, NC and Nolanville, TX. The Spring Hope plant was closed in 2002 

and eventually the property was sold in 2009. The Nolanville plant was sold in 2005 and became 

Amerrock Products. Needless to say, navigating these changes and downsizings has been challenging.

In 2009 and 2010, gross sales for Thermafiber were $38.6 and $39.4 million. After 5 months 2011, gross 

sales sit at $18.6 million for an annualized projection of $46.1 million. The gain in sales can be largely 

attributed to two mineral wool competitors ceasing operations. Walter Fiber (formerly Sloss of 

Birmingham, AL) closed in 2009. Fibrex Insulations of Sarnia, Ontario closed in January 2011.

Once freight and sales adjustments have been factored out, net sales for the prior two years were $$33.5 

and $34.4 million. Net sales are projected to be $39.8 million for 2011.

Profitability has been dramatically impacted with the drastic decline in insulation demand and the steep 

increases in raw materials and fuel. As a percent of net sales, gross margin for the company declined 

from 27.8% to 20.5% from 2009 to 2010 and currently sits at 17.9%. Net income declined from 1.9% to 
3711 Mill Street, Wabash, IN, USA 46992-7778

Phone: 260-563-2111 • Fax: 260-563-8979

www.thermafiber.com

(1.4%) from 2009 to 2010 and currently sits at (3.2%). This means the projected net income for 2011 will 

be ($1.25 million). Steps continue to be made to regain profitability in a down economy with material 

costs trending upward and fierce competition vying for any available business.

Over the last 10 years, Thermafiber has invested more than $10 million to comply with new regulations 

and to curb emissions. Several thousand tons of pollutants each year have been reduced as a result of 

these improvements. Most recently in 2009, Thermafiber invested over $5 million to install incinerators 

on each of the two cupolas. Special waivers from our existing lenders to spend more than 5 times the 

annual capital investment limit for the whole company as spelled out in loan documents had to be 

secured. Also, additional equity investment from current shareholders had to be raised to help fund the 

project. This single investment was the largest seen for the company since the late 1970’s. Duplicating 

that effort for any further control equipment will be a challenge.

We have digested EPA’s proposal and obtained budgetary capital and operating funds required to meet 

the emission reductions. 

 Curing Oven – Thermafiber installed an incinerator (Recuperative Thermal Oxidizer or RTO) as 

part of the original MACT and got it running in 2003. No changes to Formaldehyde emission 

limits have been proposed and Thermafiber currently meets that limit. For Phenol, Thermafiber 

needs to reduce between 0.86 – 0.87 tons per year to achieve the proposed limits. Thermafiber 

has very limited stack test data for Phenol as it has never been a pollutant on the radar. To put the 

reduction another way, EPA is proposing that Thermafiber reduce emissions to 5.67 – 29.78 

pounds per year assuming full melt rate and a maximum of 8,760 hours per year. These are 

exceptionally low levels to even measure. I suspect one upset condition could ruin compliance 

for the year. For Methanol, again Thermafiber has very limited stack test data. Based upon that 

data, Thermafiber needs to reduce between 0.26 – 0.27 tons per year to achieve the proposed 

limits. To put the reduction another way, EPA is proposing that Thermafiber reduce emissions to 

11.69 – 35.29 pounds per year assuming full melt rate and a maximum of 8,760 hours per year. 

Again this is an exceptionally low amount. It is unsure whether additional temperature within the 

oxidizer is enough to achieve these reductions. Even so, operating costs would increase as 

natural gas feed increases. The capability of existing equipment and the associated operating cost 

increases have not been quantified.

 Collection Chamber – Thermafiber presently controls particulate emissions from the chamber by 

use of a mechanical filter (screen house). Based upon limited stack testing, Thermafiber would 

have to reduce up to 7.59 tons per year of Formaldehyde to meet the proposed lower limit. For 

Phenol, Thermafiber would have to reduce 17.24 – 22.57 tons per year. For Methanol, 

Thermafiber would have to reduce 16.32 – 16.97 tons per year to achieve the proposed limits. 

Collectively, this means between 33.56 and 47.14 tons per year must be reduced. A budgetary 

quotation obtained last month from a company skilled in pollution control devices for a large 

enough incinerator to handle the high volume of exhaust air was $1.772 million. This was strictly 

for the incinerator. An additional $0.400 million is estimated for a pre-filter and exhaust stack. 

Annual operating and maintenance expenses were estimated at $1.043 - $1.084 million. The 

equipment costs equate to $37,585 - $52,794 per ton reduced. Funding the capital will be 

challenging and the annual impact to the financials will further drive profitability in the red.
3711 Mill Street, Wabash, IN, USA 46992-7778

Phone: 260-563-2111 • Fax: 260-563-8979

www.thermafiber.com

 Cupola – Thermafiber installed bag houses for particulate control as part of the original MACT. 

As previously mentioned, Thermafiber voluntarily installed two incinerators in 2009 to further 

reduce emissions and cut operating costs. Based upon the proposed emission limits for COS, 

Thermafiber would have to cut emissions on one cupola by 4.10 tons per year and on the other by 

4.58 tons per year assuming full melt rates and maximum operating hours per year of 8,760. 

Whether or not the incinerators have the capability to further destroy this pollutant is unknown. 

EPA is also proposing that Hydrogen Fluoride emissions be reduced. Based upon limited stack 

testing, Thermafiber would have to reduce 5.63 – 5.95 tons per year of HF. EPA is also 

proposing that Hydrochloric Acid emissions be reduced. To meet the proposed levels 

Thermafiber would have to reduce 9.97 – 10.27 tons per year of HCl. On EPA’s website, they 

list the optimum control technology for HF and HCl as a wet scrubber. To add a wet scrubber on 

the current pollution control train if incinerators, flue gas desulfurization systems, and bag houses 

is estimated to cost $1.0 - $4.0 million. Annual operating expenses are anticipated to be $0.5 -

$2.0 million. The equipment costs equate to $64,103 - $246,609 per combined ton reduced. 

Funding the capital will be challenging and the annual impact to the financials will further drive 

profitability in the red.

On behalf of the 140 employees of Thermafiber, the shareholders, the customers, and the community, I 

urge you to reconsider the stringency of these regulations. Should you want to speak with me, I can be 

reached at (260)563-2111 extension 214 or via email at sedris@thermafiber.com.

Best regards,

Steve Edris

President & CEO

Cc: Mr. David Rostker

Office of Interagency Affairs

Office of Advocacy

U.S. Small Business Administration

409 Third Street, S.W., 7th Floor

Washington, D.C. 20416
3711 Mill Street, Wabash, IN, USA 46992-7778

Phone: 260-563-2111 • Fax: 260-563-8979

www.thermafiber.com

Ms. Cortney Higgins

Office of Information and Regulatory Affairs

Office of Management and Budget

725 17th Street, N.W.

Washington, D.C. 20503

Mr. Alex Cristofaro

Director

Office of Regulatory Policy and Management

U.S. Environmental Protection Agency

Ariel Rios Building, Mail Code: 1803A

1200 Pennsylvania Avenue, N.W.

Washington, D.C. 20460

Ms. Susan Fairchild

Sector Policies and Programs Division

Metals and Minerals Group (D243-02)

Office of Air Quality Planning and Standards

U.S. Environmental Protection Agency

109 T.W. Alexander Drive

Research Triangle Park, NC 27711