Mark Koerting, service manager for Spencer Fluid Power, relaxed in the hydraulic repair company’s Gillette shop.
Photo by Walter Cook
‘Daddy had it right’
Nelson Brothers in for long haul
It may have been the innovative brothers Dugan and Olen Nelson who founded the blasting company Nelson Brothers Inc. more than 50 years ago, but it’s their respective two sons and nephews, Bill and Tony Nelson, who have managed the company the longest.
“It’s humbling for both of us,” said Bill, speaking for himself and his brother.
There’s a sound basis for the evident pride Bill and Tony take in what the founding brothers of the Nelson company started and what the managing brothers have accomplished.
From two brothers with a single truck, Nelson Brothers Inc. has grown to more than 550 employees working through eight major facilities in 10 states and today is the country’s largest suppliers of ANFO (ammonium nitrate fuel oil) explosives and ANFO services to the North American coal mining industry.
From the base laid and developed by their father and uncle, in the 26 years since their father’s death, the two brothers — Bill as chief executive officer and Tony as president — have overseen a company that has grown more than 10-fold in size.
50 years, divided by two
“The history of the company can be divided into two 25-year periods,” Bill said. “The first 25 as development under our father, and the second 25 as growth and expansion under the sons. Prior to ammonium nitrate (AN) explosives, the explosive of choice was nitro dynamite, manufactured by the ‘big guys’ — DuPont, Hercules, Atlas, Austin Powder and others.
“In the mid-late 1940s, there was the Texas City disaster, a terrible disaster. As unfortunate and tragic an incident as it was, having seen what nitrate could do, people became interested in ammonium nitrate explosives.”
In surface mining during this pre-ANFO period, sticks of dynamite up to five inches in diameter and weighing up to 30 pounds per stick were stacked by the ton into boreholes. Dynamite was both dense and waterproof, two things that early AN-based explosives were not.
“Around the time we are talking, Daddy had been a welder on pipeline construction jobs, causing our family to move three or four times a year as he followed the work,” Bill said.
Alabama breakthrough
“In 1953 or so, when I reached school age the family settled down in Parrish, Ala., and he worked as a mechanic. In 1956, small coal mines were trying to use AN instead of dynamite. They would mix AN with diesel fuel, making ANFO.
“Small operators in Alabama who were doing this kept telling Daddy that this was going to change the whole business into something else and that he should get involved in it somehow.”
At this time, ANFO was about 20 percent the cost of dynamite, so operators had a real reason to have it work, according to Bill.
The “big guys” said it wouldn’t work. But all across the country, entrepreneurs strove to make it work.
“At that time, Daddy wasn’t interested in considering the manufacturing end of the business, but he was interested in getting involved in the delivery end of it,” Bill said.
“Problem was, he didn’t have the money for the down payment on his first truck, but his brother, Olen, did. And that year, 1956, they formed Nelson Brothers.”
Initially, that business was with Spencer Chemical Company, strictly delivering the ammonium nitrate in bags to a mine’s storage building or trailer.
Miners would take the AN bags to the boreholes, tear off a corner and, using a dipper, measure out so much diesel fuel for each bag from a five-gallon can, creating ANFO.
As Bill described it, it was a very crude operation in the beginning.
“In 1960, Monsanto ap-proached Daddy to haul for them, as well as warehousing AN from their large plant in Luling, Louisiana.
Spencer, which later was purchased by Gulf Oil Chemicals, got wind of the deal and fired Daddy and Uncle Olen, so they came to an agreement with Monsanto.
“Monsanto would ship boxcars of bagged AN, Daddy would warehouse it and then truck it to the mines as needed. The way they were adding fuel to the AN at the mines was haphazard at best. They were adding so much fuel to each bag and, if they began running out of fuel toward the end, well they would just adjust the amount they were adding.
“When the mines asked why someone didn’t build a plant and do the mixing there, Daddy and Uncle Olen did.”
That was in 1962 in Parrish. As it turned out, they couldn’t have picked a better location, dead center to the Alabama coal business.
“At the job site, all the miners had to do was put a primer assembly into the borehole, open the bag and load the hole with ANFO,” Tony said.
“This was 10 times quicker and gave the exact amount and quantity of ANFO the customer needed. Everything the company has done since has been central to how more cost effectively AN-based explosives can be used.”
To solve problems of low density and no water resistance, they took the AN out of the bags, ran it through an agricultural mill, and ground the prills into almost a powder. They then took the crushed prills and carefully measured-in fuel oil and then repackaged it as ANFO in ‘Nelson Brothers’ burlap bags with plastic liners, making them water resistant, but still not waterproof.
“Packaging the ANFO in Nelson Brothers bags, I believe, was the No. 1 strategic move early in the company,” Bill Nelson said. “But, at that time, we were filling those bags with peanut scoops, literally. You wouldn’t believe how many peanut scoops it takes to fill a bag. But that didn’t last long. Very soon we went to bulk delivery and began delivering ANFO either to a customer’s trucks or storage bins or, as a new service, loading it directly into boreholes. People began doing that all over the country, but Nelson Brothers was the first to do it in Alabama.”
The sons sign on
In 1970, Bill graduated from Auburn University as a mechanical engineer, and began working for Shell as a drilling engineer in Louisiana, moving back to Alabama in 1972. “Naturally, I had all these great ideas for Daddy,” Bill said. “Finally, he said I should come home and implement some of them.”
A few days later, Dugan bought out Olen, and Bill began working with his dad. Six years later, Dugan was diagnosed with cancer, and Tony left his studies at Auburn to help with the business.
Almost exactly 25 years later, Dugan Nelson died, leaving the business to his three sons. Randy, two years younger than Bill, sold his share of the business to Bill and Tony in 1984. The second 25 years would be centered on emulsions and emulsion/ANFO blends. It was in 1981 that Nelson Brothers first developed the emulsion side of the business.
“We took the AN”, Tony recalls, “and dissolved it in a little water so that it became an aqueous solution. Mineral oil is mixed with AN solution to form the emulsion explosive. In way of reference, cold cream is an emulsion. That is what an emulsion is — mixing water and oil, chemically kept together and mechanically controlled. It’s the emulsifier, a surfactant, that allows you to mix the two components. The surfactant allows the oil and AN solution to chemically bind.”
ANFO’s two major problems — density, now available up to 1.34 g/cc, and waterproofing — had been completely resolved, according to Tony.
Beyond Alabama
The company’s first national direct sales outside Alabama came in 1992 and their first international shipment was to Columbia in 1994. Along the way, the Nelson Brothers management team has headquartered the company in Birmingham, Ala., built plants and distribution centers strategically located in the Powder River Basin and Central Appalachia and extended their services to include manufacturing, delivery, loading and even shooting blastholes for their customers.
Beginning in 1999, the Nelson brothers reorganized the company through joint ventures with Orica USA, Inc. first creating Nelson Brothers Mining Services LLC centered in the Powder River Basin and, in 2000, Nelson Brothers LLC to service customers east of the Mississippi River.
That same year the two companies formed Orica Nelson Quarry Services Inc. for the quarrying and construction industries.
In their day-to-day operations, as CEO Bill said he spends 75-80 percent of his time looking beyond one year and, as president, Tony spends 75-80 percent of his time looking within a year.
Happy anniversary
To mark the company’s 50th Anniversary, during October 2006, Bill and Tony traveled to all of the company’s places of business to host employee and spouse anniversary celebrations.
“We wanted it that way, us going to our employees and their spouses because that’s what got us where we are, our family of employees”, Bill said.
“Tony and I and our families certainly have a lot for which to be grateful, especially for Daddy. When he died, we were three kids still wet behind the ears.
“The competition expected we wouldn’t last six months. Guess they were wrong, and Daddy was right.”
High times for hydraulics
Booming coal activity keeps Spencer Fluid and others hopping
By Walter Cook
Staff Writer
It’s a good time to be in the hydraulics business in Gillette, according to Spencer Fluid Power’s Mark Koerting, as many of the big mining machines in the coal-rich Powder River Basin are equipped with one hydraulic part or another.
And, with coal mining in the area not likely going away any time soon, Koerting is optimistic about the future of his company.
“As long as there’s mining out here, there will be hydraulic work to do,” said Koerting, who serves as the service manager for Spencer’s Gillette branch.
Spencer’s Gillette branch provides parts and on-site and in-shop service for a clientele made up of mostly those involved in the coal mining and coal-bed methane industries.
Koerting stressed the coal mining industry provides, by far, most of his clients. That seems a natural fit, as all of the several hundred haul trucks, with hauling capacities primarily ranging in size from 240-360 tons, operating in the Powder River Basin utilize hydraulic components to power their massive dumps.
“Most of the components are pretty large,” Koerting said. “We will work on just about anything.”
Some big pieces of mining equipment — like electric shovels — may not rely on hydraulic technology, but, Koerting said mining would be all but impossible without hydraulics.
Many big machines that make modern construction marvels possible are also powered by hydraulics, such as excavators, he said.
Hydraulic machinery offers a very large amount of power and force with relatively small components, Koerting said. Hydraulic power is made possible by pumps and fluid, he said.
“It’s simply a way to transmit power,” Koerting said.
Hydraulics are most easily described through the theory of fluid pressure, which basically states: “A force acting on a small area can create a much larger force by acting on a larger area by virtue of hydrostatic pressure.”
Thus, when pressure is applied to a small reservoir in a particular hydraulic component, that same pressure goes to work in a much larger reservoir elsewhere in the component, where it is used to power heavy pieces of equipment.
Spencer’s Gillette office employs 22 people, most of whom are technicians who perform service both in the facility’s shop and out in the field.
Spencer, founded in 1945, is a subsidiary of Applied Industrial Technologies, a $1.7 billion company.
Spencer has numerous facilities throughout the country, including one in Billings, Mont., which Koerting said serves as the Gillette facility’s “sister shop.” The Billings shop regularly services Spencer’s customers in the Powder River Basin, Koerting said.
In addition to replacing and repairing hydraulic parts, Spencer also provides hydraulic training to mining employees, Koerting noted.
