“The Monty Heat Treat News” has launched a series of articles about the well known global supply chain issues, a series which will include comments from many of the industry’s suppliers. Our first response of many comes from Mr. Steve Thompson, CEO of controls company SSi of Cincinnati, Ohio, USA.
“Supply Chain Issues & The Heat Treatment Industry
I don’t believe I am overstating it when I make the unconditional statement that the global heat treatment industry is seeing unprecedented challenges and changes these days. We all know the root cause, disruptions caused by the COVID 19 pandemic and we see on a daily basis how it has effected the worldwide supply chain. There can be no better example of this than the auto industry and the “chip” shortage which has caused a dramatic slowdown in vehicle production (“The Monty Heat Treat News” has covered this topic in the past, an article entitled “Automotive Slow Down to Significantly Hurt Captive & Commercial Heat Treaters” can be found at Automotive Slow Down to Significantly Hurt Captive & Commercial Heat Treaters | The Monty).
So what are these supply chain issues and how have they challenged the industry in terms of pricing and deliveries? Over the course of the next few weeks “The Monty Heat Treat News” is going to look at some of these issues and with the help of a number of industry suppliers we are going to see what we can expect in terms of price increases and longer deliveries. Subjects we will be looking at include;
- commodity pricing
- shipping costs
- delivery times
- labor challenges
- energy pricing
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Thank you, Gord. I stepped into the role of President of Accurate Brazing at the beginning of 2021 as our founder, Steve Francis retired.
I came to the heat treat industry as a kid. I grew up in it and there is probably not a job within our organization that I haven’t done at some point in my career. Back when I was growing up, my sister and brother-in-law, Terry Profughi, were part of a family business in Cleveland, Ohio – it was called Technical Metal Processing. I would go visit them in the summers and it started with little trips down to the shop. I would go with them to work and push brooms or hang out with the guys in the shop. As I got older and through high school, I would work there in the summers making big bucks – $2.10 an hour! Wow, I was “somebody.” If they needed “somebody” to do this or that, I was that “somebody” – unloading trucks with a pallet jack; loading and unloading the furnaces; running to fetch tools; arbor presses; learning how to do little assemblies; learning to drive a forklift. I worked my way through college there. I would go to school until I ran out of money and then I’d come back and work a semester until I had enough to go back to school.
After college I went to work for K-C Aviation in Dallas, TX. I was working at Love Field on corporate aircraft designing full interiors. But after a couple of years, I got pulled back into the heat treat industry with Hi TecMetal Group. My first job coming back was in Quality. I worked under a great metallurgist and a couple of engineers in the lab, cutting up and doing evaluations – tensile testing and reports – and talking to customers. It was a good learning curve. Tearing up braze joints to figure out what was wrong. Listening and learning to the older guys that knew the business. I was a sponge. It was fun. I worked with Bob Peaslee on a lot of programs. Everybody knows him as the father of nickel brazing. I was lucky to work with him at AWS on a lot of program development and problem solving. And I was running the AWS Brazing 101 seminar for one event. Having that one-on-one mentoring and hands-on tutoring from him was huge. So many in the brazing industry learned their skills on the job, but I was lucky enough to learn straight from the source.
Then I moved into more of the engineering side working with the plant managers doing development – routers, procedures, travelers, documentations, and improving processes and improving braze joints which I had learned from the metallurgist and engineers. And from there I entered management, running the assembly department. And it just evolved from there learning from Terry Profughi how to run a business, interact with customers and strategically think as a businessman. From managing one division to overseeing two divisions. And just before I left, I took over four divisions as Regional Operations Manager.
In the early 2000’s I moved south to Greenville, SC. We had two divisions here and I acted as the Regional Sales Rep. But the economy crashed and the divisions were sold. I took a brief pause from the industry and started a company for some investors. I worked for Ionbond for a couple of years.
Then I made a connection with Steve Francis through an article that ran in The Monty. He was looking for someone to start a planned facility in Florida, but it did not come to be, due to a change in strategy by the customer and I ultimately came over to Accurate Brazing to run the Garlington Road plant in Greenville. And here we are.
Tell us about Accurate Brazing, what technologies you have available, size of the company, number of employees and the history of the company.
Accurate Brazing’s leading technologies include vacuum brazing, heat treating, and HIP’ing.
Accurate Brazing currently has divisions located in Goffstown, NH; Manchester, CT; and Greenville, SC where we have two facilities. A brief history of Accurate Brazing:
- Steve Francis founded Accurate Brazing with his brothers in 1989 in a garage as a side business.
- 2001 Expanded south and began operating new facility in Greenville, SC
- 2005 Acquired by Aalberts Industries
- 2010 Manchester, CT greenfield start up begins operations
- 2016 Added second facility in Greenville, SC to add capacity to support local customer
- 2018/2019 Expanded/renovated Greenville facility to accommodate HIP
- 3Q 2020 Added HIP services
- 2Q 2021 Second HIP unit commissioned
Accurate Brazing is part of the Aalberts group of companies based in the Netherlands which is one of the largest commercial heat treaters in the world. Can you please tell us the organizational structure of Aalberts and where Accurate fits? Perhaps a little about how many facilities Aalberts has in total?
Accurate Brazing is part of the Aalberts surface technologies group in the US, which includes sister companies Applied Process, Ionic Technologies, Roy Metals, Aalberts surface treatment, Ushers, Precision Plating, and newly acquired Premier Thermal.
Our niche within Aalberts, is that we are the leader in brazing and HIP’ing technologies. Aalberts wants to continue to invest in and grow these services and technologies.
Aalberts NV has 134 locations worldwide and is a €3.2 billion publicly traded company.
Accurate is part of the North American group which I am assuming includes Applied Process and fairly recently Premier Thermal both based in the US. Do you work closely with the other US divisions?
We do work closely with our US sister companies. We are always looking for opportunities to cross-sell services, collaborate, and share ideas and information.
Out of curiosity have you had the chance to visit many of the Aalberts locations in Europe?
A few years ago I helped start a facility in Poland with Hauck Heat Treating and Meyer Tool but have not been able to make a return trip.
And lately, due to COVID restrictions we have not been able to interact with our European divisions as much as we would like to, but there is an open invitation both ways for plant visits, like we have had in the past. The last year and a half, most of our collaborations have been locally within our groups and Teams Meetings with our counterparts in Europe.
Brent I am going to ask you a question which you may or may not want to answer. Aalberts really surprised the North American commercial heat treatment industry when they acquired Applied Process and Premier within the past few years-can we expect any more surprises in the form of more acquisitions?
Aalberts is an entrepreneurial company and is always looking for strategic acquisition and growth opportunities within North America.
I regret that to date I have not been able to visit your facility, however I have seen a number of photos and what I see is an immaculate location with quite new equipment. This prompts the question as to what the Accurate philosophy is, is your aim to be always pushing the envelope on new technologies or is it more to be able to say that you are a steady, dependable supplier who will always work with your customers? You could rephrase this question by asking why your company has been successful.
You are welcome to visit us anytime Gord.
I would say we aim for both.
We are technology driven, innovative, and always pushing the envelope for great customer service – this has always been Accurate Brazing’s as well as Aalberts’ philosophy.
Our success has come from being entrepreneurial, customer focused, and technology driven.
One of the main questions I have been itching to ask you is-why HIP’ing? Accurate has made a very substantial investment in hot isostatic pressing over just the past couple of years, an investment which must be in the millions of dollars which tells me you see a very substantial, profitable market. Why invest in HIP’ing as opposed to lets say Plasma Nitriding or Vacuum Carburizing?
Aalberts is a technology driven company and wants to stay at the forefront by investing in new technologies.
Hot Isostatic Pressing was a request from our customer base to add capacity in the region. We saw it as an easy bolt on to the thermal processing capabilities and services we already offered. We brought HIP’ing under one roof with other key services in Greenville, SC. This is something our customers like because they can get multiple processes in one location, it minimizes handling of parts, and can reduce turn times dramatically.
Our plan is to have three HIP presses in Greenville. The first HIP press was delivered in early 2020 just as COVID hit. COVID was not part of the plan, but the second press was already on order. We knew we needed a second press and even in a down economy we proceeded with our plan. Strategically we knew the economy would pick back up and we would be ready when it did. Press #3 for Greenville is coming. It is being built right now in Sweden. While our plan has been delayed some due to COVID and the aerospace slowdown in, we are proceeding, and we see a strong future for HIP’ing and HPHT.
And why HIP’ing as opposed to Plasma Nitriding? We already offer Plasma Nitriding in conjunction with our sister company, Ionic Technologies.
Perhaps I am being very melodramatic, but I have to say that the world is a very challenging place these days, I personally can’t remember a time when so many changes were going on. For manufacturers it is especially challenging because of supply chain disruptions, longer deliveries, difficulties in even obtaining some items vital to production and price increases which seen to be growing by the day. What are you seeing and how are you coping?
This is not unusual. If you’ve been around long enough you have seen these types of challenges. The only thing unusual is having them pile on all at once – whether labor or materials issues or the cyclical dynamics within individual industries or a global pandemic. We are a very diversified company and can ride out times like these knowing there will be a turn around. Aalberts and Accurate Brazing take advantage by investing in our equipment and people during these times.
As if supply chain issues were not enough to keep heat treaters awake at night there is another issue which many in the industry consider even more pressing-finding good people. Is this a concern at Accurate and if so what is the solution?
We have a very stable and mature workforce that we continue to train and retrain based on customer requirements. The need for bringing youth into the organization is a challenge but we are engaging in a lot of the academic arenas on a local, regional, and global level looking to cultivate new people coming in.
We are engaged with AWS and the Brazing & Soldering Manufacturers Committee. The BSMC committee is a tremendous resource for senior management providing them with a wealth of industry resources. It promotes programs that benefit the understanding of brazing & soldering technology and development of the industry. I sit on the C3 sub-committee, which promotes, through Ohio State and the Weld Engineers, welding courses and brazing handbooks for young talent entering the industry.
You probably didn’t know that I am quite jealous of your location in SC. Not only do you have great weather you are also in one of the fastest growing areas for manufacturing in all of North America. Would that be a fair statement and do you expect it to continue?
Yes. I think it is both a fair statement and we expect to see continued growth.
We are not in the rust belt where a lot of our competitors and customers are clustered together, but this is a growing area because of the automotive and aerospace industries. We are starting to see firearms manufacturers moving south as well.
What is lacking is a lot of the machining and casting guys who are still located up north. A lot of what is being done here is assembly.
The southeast is a business-friendly environment and the cost of doing business is very favorable.
Now for a completely unfair and unreasonable question-where as a commercial heat treater are you going? Do you expect commercials will increase their share of the total heat treating market? Are commercials looking at a bright future in the near and long term even with all of the challenges? What heat treatment technologies are going to be in the forefront going forward? My very unfair question would be; can you give us a glimpse into the future? What are your personal thoughts?
My personal thought is that we are always battling companies trying to in-source our services whether it be braze or heat treat, thinking it is commodity, an easy bolt–on process to get lean and bring in–house. Unfortunately, the companies that are large enough to do that don’t understand the real cost of what it takes.
We see the future of the market in Additive Manufacturing, Aerospace, Defense, Automotive, IGT and Oil & Gas.
Accurate Brazing and Aalberts will continue to grow by adding people, equipment, and technologies based on customer requirements locally, regionally, nationally, and globally. Aalberts will continue to invest in customer needs.
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View our recent magazines and podcasts by clicking the following link. https://themonty.com/magazine/
L&L Special Furnace Co., Inc., has delivered a high-uniformity box furnace to Soil Lab, a community-based workshop based in Chicago, as part of the 2021 Chicago Architecture Biennial. The furnace was provided with a fast-track shipment of four weeks to be able to be part of the biennial workshop program where local community groups will experiment and gain knowledge of ceramic production and various processes.
The L&L model XLE 3636 is a front-loading, refractory-lined box furnace and has an effective work zone of 34” wide by 34” high by 32” deep. There is a horizontal double pivot door with a safety power cutoff switch. A ceramic hearth and standoffs are provided as a workspace for various ceramics and ceramic-based products.
The furnace has a series of inlets on the side and an outlet on the top. These can be capped off when not in use to preserve heat, and can provide a “candling” effect where various ceramic byproducts can be removed from the furnace. Some of these byproducts can be corrosive and need to be removed from the system. The XLE 3636 is equipped with solid-state relays for fast, quite cycle times to offer good control. These are housed in a NEMA 1 control panel with single-point power connection. All required fusing and interconnections are included.
The control system is driven by a Bartlett program control with an overtemperature control to prevent the furnace from overfiring. The Kanthal Iron Aluminum Chrome coiled elements located on the sides, back and door are controlled in two zones for balancing of temperature gradients from top to bottom.
All L&L furnaces can be configured with various options and be specifically tailored to meet your thermal needs. We also offer furnaces equipped with pyrometry packages to meet ASM2750F.
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I don’t believe I am overstating it when I make the unconditional statement that the global heat treatment industry is seeing unprecedented challenges and changes these days. We all know the root cause, disruptions caused by the COVID 19 pandemic and we see on a daily basis how it has effected the worldwide supply chain. There can be no better example of this than the auto industry and the “chip” shortage which has caused a dramatic slowdown in vehicle production (“The Monty Heat Treat News” has covered this topic in the past, an article entitled “Automotive Slow Down to Significantly Hurt Captive & Commercial Heat Treaters” can be found at Automotive Slow Down to Significantly Hurt Captive & Commercial Heat Treaters | The Monty).
So what are these supply chain issues and how have they challenged the industry in terms of pricing and deliveries? Over the course of the next few weeks “The Monty Heat Treat News” is going to look at some of these issues and with the help of a number of industry suppliers we are going to see what we can expect in terms of price increases and longer deliveries. Subjects we will be looking at include;
- commodity pricing
- shipping costs
- delivery times
- labor challenges
- energy pricing
Nickel Pricing; We start off with a commodity which has historically always effected the bottom line of heat treaters and furnace builders-nickel. All high temperature alloy components used in furnaces have some % of nickel, this can be as high as 72% in some types of Inconel material (alloy supplier Cronite offers a chart showing the composition of various materials used in heat treating heat_treatment.pdf (cronite-group.com). Currently spot nickel prices stand at slightly over $9.00 USD/pound which by historical levels is not tremendously high, however as can be seen in the chart below this represents a price increase of over 30% in the past year (interestingly enough nickel pricing peaked back in 2007 at levels almost twice what they currently are. Pricing came back to earth during the 2009 recession).
So while pricing has always been rather volatile it has been steadily climbing during the Pandemic and with warehouse stock inventories steadily decreasing over the past year there is no reason to think pricing will go anywhere but up.
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In this weeks suspense filled edition of “The Heat Treat Podcast” in which our articulate, knowledgeable host, Mr. Carlos Torres talks to well known individuals in the global heat treatment industry we feature a friend of “The Monty Heat Treat News”, Mr. Nathan Wright, CEO of C-3 Data, a supplier of data systems to the heat treatment industry.
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“Nadcap history; Prior to Nadcap, aerospace companies audited their own Suppliers to their own process requirements to verify compliance. As the processes the Suppliers were providing to their customers were often similar or identical, the customer requirements were comparable. Consequently, these duplicate audits were redundant and simply added to everyone’s workload, without adding value. For the aerospace Prime contractors, conducting their own audits similarly meant duplication of effort, redundant audits, unnecessary administration and, ultimately, higher cost for no added value. Then, in November 1989, a US Government/Industry Equal Partners Conference recommended a consensus solution to the duplication of Supplier process control system audits and in July 1990, the Performance Review Institute was incorporated to administer the Nadcap program.”
“The Performance Review Institute (PRI) has announced the appointment of Jay Solomond to the role of Executive Vice President and Chief Operating Officer. Mr. Solomond will lead and manage all aspects of PRI’s strategy, continuing to add value for the global stakeholder base and supporting PRI’s continued global growth, operations and programs.
David L. Schutt PhD, CEO and President of the SAE Group said: “Jay is a highly successful global executive with over 25 years of leadership across various industries. He is a transformative and forward-thinking leader, which is exactly what’s needed at this pivotal time. We are excited to have Jay’s involvement, and his passion for quality and safety, to lead PRI into the future.”
Throughout his diverse professional career, Mr. Solomond has led teams and projects in multiple countries, with responsibility for strategic decisions and delivering ever richer value and confidence to all stakeholders, including the general public. Customer- and quality-focused, Mr. Solomond has an innovative mindset, holding four patents, and a strong commitment to continuous improvement.
Jay Solomond said: “PRI is known and trusted worldwide as the steward of quality in critical industries such as aerospace and medical devices through its unique collaborative supply chain oversight programs, world-leading quality management systems approval program and expert professional development programs. I look forward to working with the PRI stakeholders, and leading the transformation, towards the provision of ‘next generation’ services.”
About PRI; The Performance Review Institute (PRI) is a not-for-profit trade association started in 1990. PRI is the world leader in facilitating collaborative supply chain oversight programs, quality management systems approvals and professional development in industries where safety and quality are shared values.Learn more at www.p-r-i.org”
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Since 1999 “The Monty” has been publishing annually a list of the largest commercial heat treaters in North America based upon annual sales, our 2021 list can be found at https://themonty.com/articles/50-largest-north-american-commercial-heat-treats-2021-2/ This year readers will see we became much more ambitious and expanded the list to the 50 largest. In our 50th spot we have Commercial heat treater Crio.
Commercial heat treater Crio is the third commercial heat treater in Mexico to make our list. The company founded their first location in Queretaro, Mexico in 2004 and since that time it has never looked back. CRIO now has 3 locations in Mexico which feature batch IQ furnaces, car bottoms, rotary hearth furnaces and press quenching systems. While the company does do a reasonable amount of aerospace work the backbone of the company is automotive work which means that the company achieved CQI-9 certification a number of years back.
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Well we can’t speak for every manufacturer but ZF Wind Power in Coimbatore, India is pretty typical in that they are using large pit, gas carburizing furnaces. In this particular case Aichelin Unitherm of India is providing the company a total of 7 electrically heated pit furnaces each with an operating temperature of 850C to 970C and a load capacity of 12,000 KG. The facility is equipped with advanced automation with customized software for the entire heat treatment process and complies with CE certification standards. While “The Monty Heat Treat News” has seen facilities using large batch IQ furnaces for heat treating of gears and shafts for the windmill industry, pit carburizing furnaces remain the choice of most manufacturers.
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While there is always a strong demand for commercial heat treat companies the pandemic has drastically reduced the number being sold over the past 18 months (the only one which comes to mind is the acquisition of Premier Thermal by Aalberts earlier this year). The reasons are many and varied and include the fact that face to face meetings have been difficult, sales figures for many have dropped making owners reluctant to sell and buyers facing the uncertainty of what future sales will be are equally as cautious.
With that backdrop we mention a small commercial heat treater in the USA which recently went on the market. Located in Southern California the company dates back to 1942 with the current owner purchasing it in 2007. The 15 person firm specializes in small high volume parts which are processed in rotary retort and batch IQ furnaces. While sales have declined slightly over the past 4 years and now stand at $1.755 million in 2020 cash flow is respectable at $459,000 USD. The end result is that the asking price is $1.95 million USD which is about where it should be.
“The Monty Heat Treat News” has no affiliation whatever with this company and is not involved in the sales process. Our interest begins and ends with the fact that this gives a good indication about what a profitable commercial heat treat is worth.
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