Entrepreneurs

Local economy starts ‘long road back’

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New report by well-known Louisiana economist predicts slow recovery after four-year oil bust.

A new forecast from a well-known Louisiana economist presents one of the most optimistic forecasts for Houma-Thibodaux’s economy since an offshore oil bust began four years ago.

Loren Scott’s annual economic forecast, which he delivered Wednesday to members of the South Louisiana Economic Council and other local business officials, does not predict a return to boom times anytime soon. Instead, it describes the area’s oil-based economy as beginning a slow climb from the bottom of the latest downfall.

“After much bloodletting, the corner appears to have been turned,” the report says. “Fabricators and shipbuilders are making a reasonably successful shift to non-extraction-related-customers. An oil price of $80 a barrel by 2020 is expected to start a serious revival in the Gulf by 2020.”

Scott projects the metro area, comprised of Terrebonne and Lafourche parishes, will gain 700 jobs, 0.8 percent, next year. It will add another 2,100 jobs, 2.4 percent, in 2020, driven largely by gains in oil and gas.

A rebound has already begun, the report suggests, defying his prediction last year that the area would lose another 1,800 jobs in 2018. Instead, he now predicts the local economy will end the year with a net gain of 200 jobs.

“The numbers obviously do not show great growth,” the report says, “but at least they are up.”

‘LONG ROAD BACK’

Houma has a “long road back” to anything akin to the vibrant economy it enjoyed before a global crude glut caused oil prices to plummet and local jobs to vanish, the report suggests.

The area has lost roughly 16,000 jobs -- about one of every six -- since mid-2014 as low crude prices sparked layoffs and work slowdowns throughout the oil industry.

“This is more than 2 1/2 times worse than what U.S. employment declined during the Great Recession over 2008-09,” Scott says in the report.

Here, according to the report, is how some local companies have dealt with the downturn:

Edison Chouest, a Galliano-based company that builds and operates oilfield supply boats, cut the number of workers at its LaShip yard in Houma in half to 500. One hundred of the company’s 250 boats are are docked, and its mariners are working about half the time they did before the collapse. Employment at Chouest’s North American Shipyard in Larose has declined from about 500 to 200. Its North American maintenance facility at Port Fourchon remains open with about 300 workers.

Chett Morrison, a Houma-based fabrication company, cut its workforce from 515 to 320.

Baker-Hughes closed its 50-person oil services office in Houma.

Hercules Offshore, which operated a fleet of oilfield service boats, declared bankruptcy, closed its Houma yard and laid off 50 people there.

National Oilwell Varco, which builds oilfield equipment, closed its Houma facility at a cost of 80 jobs.

CCHI Aviation closed its Galliano base, laying off 74 pilots, mechanics and support staff.

Offshore Specialty Fabricators began layoffs in May 2016 that cost 67 jobs.

“The bloodbath was obviously not confined to the direct oil and exploration companies but also to tangentially connected companies,” the report says.

KEY TO A COMEBACK

Scott cites several developments as evidence the local economy has hit bottom and is on the path toward slow improvement. The area has posted several months of year-to-year job gains, truck traffic to and from the Gulf oilfield hub of Port Fourchon is picking up, and service companies along the Louisiana coast are planning for growth through 2020. Gulf oil lease sales, though far below historic highs, are on the rise. And many companies are beginning to diversify the kinds of work they do to become less reliant on the oil industry’s boom-or-bust cycles.

But the key to any comeback is the same thing it has been for decades: the price of crude oil.

It’s notoriously difficult to predict long-term crude prices because so many variables affect them -- political and regulatory decisions, production activity by major suppliers like the U.S. and OPEC, economic conditions or unrest in far-flung parts of the world, and global supply and demand. As a result, analysts’ and predictions vary significantly.

Scott predicts oil will rise from an average $65 a barrel this year to $80 a barrel by 2020. Whether that happens will have major implications not just for Houma-Thibodaux but for all of Louisiana.

“Because Louisiana is the country’s second-largest producer of crude oil, if offshore crude is counted in the number, movements in oil prices can often dramatically impact the state, as Louisiana has learned with a vengeance since late 2014,” Scott says in the report. “The huge decline in oil prices from late 2014 through much of 2017 hammered Louisiana’s oil patch so hard that it sent the state into a 28-month recession and a loss of 23,300 jobs (-1.2 percent). Louisiana desperately needs oil prices to both rise and stay high for an extended period for a drilling recovery in the Gulf of Mexico and a revival of the state’s oil-centered metropolitan areas.”

-- Executive Editor Keith Magill can be reached at 857-2201 or keith.magill@houmatoday.com.

Houma shipbuilder lands two major contracts

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A Houma shipbuilder has landed two new contracts as it works to rebound from a four-year offshore oil bust.

Gulf Island Fabrication will build a 245-guest riverboat for the American Steamboat Company, officials said Friday. The new paddle-wheeler, called the American Countess, will be built using the existing hull of the Kanesville Queen, a former gambling boat built in 1995. It’s expected to sail the Mississippi River starting sometime next year.

Gulf Island officials said they will report revenue and man-hours associated with the project in the company’s public financial statements for the quarter ending Sept. 30.

“We continue to break sales records and incredible demand remains for more capacity on the river with each of our boats continuing to sail full,” American Queen Steamboat Company Chairman John Waggoner said in a news release. “We look forward to collaborating with Gulf Island’s team of skilled workers and craftsmen to deliver a riverboat that will once again exceed expectations of our guests and continue raising the bar on domestic river cruising.”

The latest contract follows Gulf Island’s announcement late last month that it has finalized a deal to build a second 3300-horsepower towboat for an unnamed customer. Delivery of the second vessel is estimated two months after delivery of the first.

“We are pleased to be awarded this option for the second newbuild towboat,” Kirk Meche, Gulf Island president and CEO, said in a news release. “This work will be performed at our shipyard in Houma. ... This is yet another indication of confidence from our customers as it relates to our ability to perform and provide quality vessels.”

Gulf Island, based in Houston, is a leading fabricator of oilfield structures, including offshore platforms and ships. It also builds structures for the petrochemical and alternative energy industries. Its Houma fabrication and shipbuilding operations in Houma employ about 600 workers.

Like many oilfield service companies, Gulf Island’s business has been impacted by a four-year offshore oil bust that has stripped an estimated 16,000 jobs from the Houma-Thibodaux economy.

Meche cited some improvements in an Aug. 9 report on the company’s second-quarter financial results. The company reported net income of $500,000 on revenue of $54 million for the three months ended June 30. That compares to a net loss of $10.9 million on revenue of $45.9 million for the same period in 2017. And it’s up from the first quarter of this year, when the company posted a net loss of $5.3 million.

He cited strong performance from Gulf Island’s services division in Houma, as well as income from the sale of a fabrication yard in Ingleside, Texas, for part of the gain.

On June 6, the company landed a contract to build a second marine research vessel for Oregon State University for $67.6 million. And in March, it received a $63.6 million contract to build the first in a new class of Navy salvage, towing and rescue ships. Both projects are being built in Houma.

The company’s reported a backlog of work totaling $347.6 million as of Aug. 8, including projects through 2022.

“As of today,” Meche said in the report, “our backlog is the largest it has been in four years.”

-- Executive Editor Keith Magill can be reached at 857-2201 or keith.magill@houmatoday.com.

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Congratulations to two Houma companies for being recognized on Inc.com's 5000 Fastest-Growing Private Companies list -- 5-year-old Pelican Waste & Debris, LLC ranked #318 and JJR Construction ranked #1824! Also a shout out to Walk-On's Bistreaux & Bar as the Baton Rouge-based company with a Houma location made the list as well (#1756).

CORTEC, L.L.C. wins state award

 CORTEC, L.L.C. Founder Bobby Corte, Jr. accepts the Lantern Award from Louisiana Economic Development Secretary Don Pierson with Stephen Corte (left), Thomas Chauvin and Larry Chauvin on June 5, 2018 at the Louisiana Governor’s Mansion in Baton Rouge.

CORTEC, L.L.C. Founder Bobby Corte, Jr. accepts the Lantern Award from Louisiana Economic Development Secretary Don Pierson with Stephen Corte (left), Thomas Chauvin and Larry Chauvin on June 5, 2018 at the Louisiana Governor’s Mansion in Baton Rouge.

HOUMA, June 4, 2018 – Houma-based CORTEC, LLC, was recently honored for its excellence in manufacturing and outstanding service to the community with the State of Louisiana’s Lantern Award for the Bayou Region.

“Manufacturers drive Louisiana’s economy in the most important ways,” Louisiana Economic Development Secretary Don Pierson said. “They provide good-paying jobs and have a strong multiplier effect, creating even more jobs outside their facilities. Harnessing our talented workforce, they compete in and win in a global economy as they produce vital products that are in demand by companies and consumers.”

Award nominees are judged on contributions to the community, including investment in employment growth and facility expansion, as well as sustaining and growing operations at least three years prior to the award. The 15-year-old CORTEC is undergoing expansion at both its Port Allen and Houma facilities.

CORTEC’s 156 employees design, manufacture, sell and service valve and manifold products for the oil-and-gas industry through the company’s two divisions: Cortec Fluid Control in Houma and Cortec Manifold Systems in Port Allen. From engineering to assembling, through coating to shipping, CORTEC handles the entire process for quality control. Its valves, chokes and flow-line component products are shipped to the Gulf of Mexico and shale plays in the United States as well as internationally to Canada, Mexico, South America, Europe, Asia, Africa and the Middle East.

Since launching the Lantern Awards in 1979, LED has recognized more than 300 Louisiana manufacturing businesses with its partners, Louisiana Industrial Development Executives Association and the Louisiana Quality Foundation. Award winners receive lanterns handcrafted and donated by Bevolo Gas and Electric Lights of New Orleans.

This year’s award to CORTEC, L.L.C., continues a family tradition, as the Corte family previously received a Lantern Award when it owned and operated COR-VAL, Inc., founded by Bobby Corte, Sr.

 

Houma Main Street Seeks Grant Applicants

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The old City Court building in downtown Houma was renovated in 2011 with help from Louisiana Main Street grants.  

Efforts to revitalize downtown Houma could continue this year with the opportunity for restoration grants from Louisiana Main Street.

Each year, the state program offers grants ranging from $2,500 to $10,000 for commercial building and business owners in historic downtown areas. Houma Main Street is once again offering its services to local businesses and property owners downtown who are interested in applying.

“Over the years, Houma Main Street has received nearly $80,000 in redevelopment grant funds from the Louisiana Main Street program, initiating $500,000 in local projects costs, plus associated jobs and economic stimulation,” Houma Main Street Manager Anne Picou said.

To be eligible, a building must be in the historic downtown Houma district and be at least 50 years old. The grants have a 50 percent match with the applicant, meaning that if a project is awarded a $5,000 grant, the business or property owner must also invest $5,000, Picou said.

Only one grant can be awarded for each Main Street district. Once applications are submitted to the Houma Main Street, the organization’s board will choose a project to submit to the state program.

In her 17 years with Houma Main Street, Picou said, the agency has helped secure grants for projects by Fakier Jewelers, the renovation of the former City Court building by Lori Davis, new signage at People’s Drug Store and the renovation of Rubicon Salon.

The grants are intended to preserve the historic character downtown, she said.

For example, if someone submits a project to change the facade of a historic property, that could undermine the outlook or integrity of the building. Instead, Main Street wants to work with business owners to keep the original integrity of the building, while modernizing it for new use, Picou said.

Even a simple sign project can promote economic development, she said.

“The Main Street program totally agrees with signage as a way to do economic development,” she said.

Having a large, attractive sign can draw in business and make a building recognizable.

Years ago, grants could be awarded for as much as $25,000, but budget cuts have reduced funding for the program, Picou said.

In the case of Rubicon Salon, when a tire store abandoned the building to move to a new location, the property left Main Street organizers wondering what to do.

“By grace of god, (Rubicon Salon) turned it into upscale salon,” Picou said. “It’s a genuine project, keeping the essence of historical building ... but still modernizing the inside elements.”

The old City Court building has a similar story. The parish was considering tearing it down and converting it into parking before Davis purchased the property and turn it into a commercial and residential property, Picou said.

“More and more people living downtown,” she said. “I try to explain that to people. Don’t give up.”

Several downtown businesses have already expressed interest in the program, which has become simpler over the years, Picou said.

The application deadline is 1 p.m. June 18. Applications can be obtained by calling Picou at 873-6408.

By Julia Arenstam, Staff Writer, can be reached at 448-7636 orjulia.arenstam@houmatoday.com. Follow her on Twitter at @gingerale214.

LED'S STEP GRANT OFFERS TRAVEL EXPENSE REIMBURSEMENTS FOR OFFSHORE EUROPE - SEPTEMBER 5-8, 2017 - ABERDEEN, U.K.

About Offshore Europe 2017

Offshore Europe features over 56,000 attendees and offers Louisiana companies an opportunity to engage directly with international market leaders and innovative technology companies. As Europe’s leading energy and petroleum event, the conference attracts global audiences of engineers, technical specialists and industry leaders. The 2017 conference will be held at the Aberdeen Exhibition and Conference Center and is organized by the Society of Petroleum Engineers. 

STEP Grant Opportunity

LED’s STEP Grant will offer travel expense reimbursements of up to 75 percent for new-to-export companies and up to 50 percent for market-expansion companies, for total assistance of up to $2,500 per company for attending Offshore Europe.

Learn more about utilizing the STEP Grant for Offshore Europe by clicking here or by calling

Sheba Person-Whitley - Senior International Trade Manager
International Commerce Division - Louisiana Economic Development
T     225.342.2537
C     225.772.2981
Sheba.Person@la.gov

617 North Third Street
Baton Rouge, Louisiana

Your Pie: Craft pizza and beer eatery coming to Houma

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A new casual craft pizza and beer restaurant will open in Houma late this summer offering pizza and panini, as well as gelato and craft beer.

Your Pie is set to open Aug. 1 at 1378 W. Tunnel Blvd. Aug. 1, across from the Plantation Inn, but Ricky Reaves, the owner and local entrepreneur, said he’s aiming to open a bit sooner.

Tulane to honor Buquet and Gleason as Entrepreneurs of the Year

Freeman News

Business executive J.J. Buquet, left, and ALS activist Steve Gleason, right, will be honored as Tulane University’s 2017 Entrepreneurs of the Year at the Albert Lepage Center for Entrepreneurship and Innovation Awards Gala on April 20 at the Audubon Tea Room. . (Buquet photo courtesy of the Buquet family; Gleason photo by Jackson Hill)