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Valmont sees boost from Tennessee Valley deal



The Tennessee Valley Authority, the massive
federal project fathered by U.S. Sen. George W.
Norris of Nebraska that revitalized a large part of
the southeastern United States, is also playing a
crucial role in the success of a company in the
late lawmaker's home state.

Inc., based
in Omaha,
has been a
supplier of steel transmission
poles to the TVA for more than 10
years. That relationship, which
gained strength this week with the
announcement of another $100
million contract, has contributed to
Valmont's becoming the world
leader in the manufacture of utility

Under the latest contract, which
was awarded on a negotiated
rather than bid basis, Valmont will
supply about 5,000 steel poles a year, many of them 120 feet high, to the
TVA through 2011.

For the Omaha-based company, it's a landmark deal.

"We've had individual orders that would be larger than TVA's order in any
given year," said Richard Sampson, vice president and general manager
of the company's utility market. "But for a long-term contract, this is
certainly the biggest one we've had."

News of the contract gave a boost to Valmont
shares, which closed up 43 cents Wednesday
at $16.13, a three-month closing high.

A number of the polls are replacements, and
others are pegged for new construction. All
will be used to serve the seven-state TVA
region, which includes Alabama, Georgia,
Kentucky, Mississippi, North Carolina,
Tennessee and Virginia.

The agency was created in 1933 as a Franklin
Roosevelt New Deal program. It grew out of
an idea championed in the 1920s by Sen.
Norris, a liberal Republican who was a strong
advocate of government power development.

The TVA went beyond even Norris' dreams. It
not only brought cheap electricity into homes formerly lighted by kerosene
lamps, but it also tamed the flood-prone Tennessee River and made
navigation possible.

And for Valmont, the TVA and its 17,000 miles of transmission lines have
proved to be a boon for the company's utility pole business.

The poles division has been a major contributor to Valmont's revenues for
more than a decade. That continued to be the case for 2001. Of the
company's overall sales of $872.4 million, Valmont had $354 million in
revenue from poles. That was a 14.2 percent rise over sales of $310.1
million in 2000.

Excluding the latest contract, the company has sold poles to TVA at
various times over the last 10 years that are worth another $100 million.

Poles destined for the TVA will continue to be made at Valmont's Tulsa,
Okla., plant, one of 15 company plants throughout the world.

That plant also will produce poles for an Oklahoma utility that was hard hit
earlier this year by an ice storm. The Oklahoma contract is worth another
$8 million to $10 million, about the same amount as the company's
Alaska project.

The poles in Alaska are for an
85-mile-long electric transmission
line that runs from Fairbanks to
Nenana to Healey. And closer to
home, Valmont recently was
awarded a $1.3 million contract by
the Omaha Public Power District
for a new transmission line near

Of Valmont's 5,400 employees,
1,500 work in the
pole-manufacturing business.
About 590 employees at the
company's Valley, Neb., plant work in the pole sector, or slightly more than
half the overall work force in Valley.

Mark Richards, president of Valmont's global poles division, noted that
Valmont has operated - since January 2001 - a plant near Jasper, Tenn.,
in the heart of the TVA region.

Although the plant doesn't provide the TVA with any products, it increases
overall capacity, which frees up service to the TVA from Valmont's other

Locating a plant there also doesn't hurt Valmont's relationship with the
TVA. "Their mission is also economic development," Sampson said of the
TVA. "So it's important for them to be able to bring into their area people
who can help develop the (region.)"

He said that Valmont's utility pole business protects the company
somewhat when it experiences sluggishness in its other manufacturing
operations - communications towers and mechanized irrigation
equipment - as is now happening.

Sampson said that even after the irrigation and communications markets
improve, the utilities pole business is expected to grow, especially
elsewhere in the world.

Valmont has said that in the next 10 years it expects $500 billion in new
electricity generation capacity to come on line, with Asia, Europe and
South America ranking as the fastest-growing markets.

Countries can't develop their economies until their infrastructure is in
place, Sampson said, "and the most basic part of that infrastructure is
electric power.

"That was (Sen.) Norris' dream. He realized that you couldn't bring
prosperity to rural Nebraska or rural Tennessee until you had cheap
power. If you can bring the cost of power down, you bring jobs. It was true
in Tennessee 50 years ago, and it's equally true today, whether you are in
China or Chile or Peru or Morocco."
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