From time to time we have a close look at captive heat treat departments, in this case we are looking at Jones Metal in West Lafayette, Ohio, USA. Jones Metal is a 97 year old metal forming company whose customers are mainly in the aerospace industry. Many years ago the company brought their heat treating in house and currently they have vacuum and aluminum heat treating furnaces along with cryogenic capabilities. While originally the heat treat department was entirely for their own products this has evolved over the years to the point that the firm now does between $500,000 and $1 million USD in commercial heat treating. Almost undoubtedly one of the reasons the company has been successful at commercial heat treating is because of their approvals which include AS/ISO, NADCAP and ITAR Registration.
Jones is a medium size manufacturer and their heat treat department would be considered small to medium sized however all of the equipment is relatively new, in very good condition and the entire facility is clean and well organized. All in all this is a good example of a typical captive heat treating department as you can see in these photos.
Today we start off with a news item from ALD Thermal Treatment in Port Huron, Michigan, USA one of the largest commercial heat treaters in North America as ranked by “The Monty” https://themonty.com/articles/largest-north-american-commercial-heat-treats-august-2020/. “ALD Heat Treat Services, one of the premier heat treat organizations in the world specializing in distortion control through its specialization in Low Pressure Carburizing (LPC) and High Pressure Gas Quenching (HPGQ) announced this week that Kelly Peters has been appointed Vice President of Operations for the Port Huron Michigan plant. Kelly brings an exciting history and heat treat pedigree to this role. Not only has she worked her way to Vice President Operations from her first position as a production associate 12 years ago, but her father Robert Peters, was the Vice President of Operations who opened the facility in 2005. “I’m excited about taking on this role, although the timing of the promotion in the midst of a global pandemic certainly poses unique challenges” according Ms. Peters. She goes on to say that she inherits an excellent team In Port Huron, focused on success and growth in new and exciting markets.” In more people news we see that Mr. Lewis Lance, a very well known individual in the North American heat treating industry is looking for a change. Up until recently Lewis was General Manager of Diamond Heat Treat in Rockford, Illinois but things change. Diamond Heat Treat is part Thermal Process Holdings another company on our list of the 30 largest commercial heat treats in North America.
Bodycote, the worlds largest commercial heat treater recently released a trading update for the first 4 months of the year and it comes as no surprise that the company has been effected by the COVID 19. Profits are down and layoffs and plant closures have been announced (most of this information can be found on our website). In spite of that share prices are coming roaring back with this summary from a Wall Street financial firm; “Bodycote shareholders are no doubt pleased to see that the share price has had a great month, posting a 30% gain, recovering from prior weakness. The bad news is that even after that recovery shareholders are still underwater by about 9.1% for the full year. All else being equal, a sharp share price increase should make a stock less attractive to potential investors. While the market sentiment towards a stock is very changeable, in the long run, the share price will tend to move in the same direction as earnings per share. The implication here is that deep value investors might steer clear when expectations of a company are too high.”
Commercial heat treat Cascade Metallurgical out in Kent, Washington, USA is up for sale. Last year the company was looking at selling their land and building and the business however it didn’t happen. However after that first false start our understanding is that the company again is looking for a new buyer. The new facility at Virginia Metal Treating is slowly moving ahead as we can see in this picture. Virginia Metal is part of East Carolina Metal Treating Inc., another company which recently made our list of the largest commercials in North America.
From Paulo, the second largest commercial heat treater in North America we have this press release; Paulo is excited to announce that two divisions have been awarded Bell Textron approval. On-site audits (Pre-COVID19) of both the Cleveland and Kansas Divisions took place resulting in approval to process parts deemed “Primary”, “Critical”, “Flight Safety”, or “Fatigue Controlled” by Bell Textron. Both Paulo locations are eager to begin processing work for Bell and their suppliers. The two facilities hold Nadcap Merit Status and provide many types of Heat Treatment as well as Brazing and Hot Isostatic Pressing.” Euro Powdered Metal 2020 to be a virtual event. This comes as no surprise that the Euro PM event for 2020 will be a virtual event as HK20 the largest German heat treat exhibition which was to be held in Cologne, Germany in October is also going the same route. We at “The Monty” are still very curious about what a virtual event looks like-how do you have a few beers with your heat treat buddies when it is virtual? “The next physical edition of the Euro PM Congress & Exhibition will be held in Lisbon in 2021, while a virtual event will be held this year to enable the presentation of all papers originally on the programme for Euro PM2020. Following the recent announcement by the European Powder Metallurgy Association (EPMA) that the next Euro PM Congress & Exhibition has been postponed until October 17–20, 2021, it has confirmed that a Virtual Congress will be held in place of the 2020 event. In an official statement sent via email, the organisers wrote, “In recent weeks, we have all been following the uncertainty and spread of the COVID-19 virus worldwide. The pandemic impacts all business in different ways; and given the difficulties participants may have travelling to Lisbon, as well as the high safety and financial constraints of running a live meeting in 2020, the EPMA Board has decided to postpone the live Euro PM Congress & Exhibition event in Lisbon until 17-20 October 2021.” This new event will be held online as a webinar from October 5–7, 2020. The Virtual Congress is expected to allow all 300+ technical papers to be presented during a live webinar.
To round things out for today we have this press release from L&L Special Furnace about an order the company recently received; “L&L Special Furnace Co., Inc. has delivered three multipurpose GS2026 bench mounted box furnaces used to test high-temperature aerospace fasteners. The fastener manufacturer located in Pennsylvania now has a total of five GS series furnaces at its facility. The new model GS2026 has internal dimensions of 18” wide by 12” high by 24” deep. It has an operating voltage of 208, 220, 240 volts single phase, 60 or 50 hertz.”
McLaughlin Furnace Group in Avilla, Indiana, USA is getting closer to moving into their new facility. This photo shows the progress on their new building, a building which the company is moving into later this year. To find out more about the company we would point you to an interview we did with the owner and founder of the company, Jeff McLaughlin earlier this year https://themonty.com/project/j
The largest North American heat treat show of 2020, Furnaces North America (FNA) is scheduled to be held in Louisville, Kentucky, USA September 30th to October 2nd of this year. Due to COVID 19 the question on everybody’s lips these days is; will the show go ahead as planned or will it share the fate of virtually every other heat treat exhibition of 2020? Since early in 2020 every single heat treatment exhibition around the world has been cancelled or postponed with the most recent casualty being HK 2020 which was supposed to held October 20-22 of this year. This annual show, held in Cologne, Germany for the past number of years is the largest annual heat treat related event in Europe and just last week the organizers announced that this would become a “virtual “ show ( https://themonty.com/hk-2020-3/).
While the main reason for all of these events being cancelled is the fear of spreading the virus, economics is a very large factor also-how many exhibitors are willing to invest large sums of money when there are so many unanswered questions about what attendance will be like? Another unknown in the case of FNA is how many attendees will the state of Kentucky allow at the event? FNA is an excellent show and it would be a real shame to see it cancelled for this year but if I were a bookie I would give you odds of 50/50 at best of the show going ahead.
To this rather interesting press release from SECO/WARWICK we can add that Youngstown Tool & Die has some very big plans these days. The company is planning on investing at least $10 million USD in the near future and part of this expansion includes taking over another facility. Currently the company has 46 full time employees but the size of their workforce will probably double.
“Increased capabilities. Increased throughput. Increased customer quality. These are the attributes behind Youngstown Tools & Die’s decision to upgrade their existing atmosphere heat treatment capabilities to new high-pressure gas quench (HPGQ) vacuum furnaces from SECO/VACUUM, a SECO/WARWICK Group company. It’s all part of the company’s big upgrade and expansion plans. Youngstown specializes in manufacturing aluminum extrusion dies since 1961 and because of demand, is moving into a larger facility in their Ohio community to accommodate increased production needs. This is their first purchase from SECO/VACUUM, and proximity and fast delivery were both factors in the decision. Other tangible factors reflected Youngstown’s confidence in SECO/WARWICK’s core values, including the company’s commitment to fulfill obligations by responding quickly to customer needs, by meeting deadlines, and by contributing reliability in every process.
One of the 2 Vector furnaces ordered in January was made available as part of SVT’s VIP program for fast delivery, while the other is scheduled to ship later in the year. Dave Mrdjenovic, Youngstown Tool & Die’s General Manager, said, “The short lead time certainly made a difference to us. Our expansion has been facilitated by a localized government development program to expand employment and business development in our area, so we are moving quickly to take advantage of the program. Upgrading our existing atmosphere furnaces to high pressure gas quench vacuum furnaces will significantly improve our performance as we grow. Having worked with Vector vacuum furnaces at my prior company, I was already comfortable that it was the right technology for our needs.”
The link below will take you to the June 2020 issue of “The Monty”, the World’s Largest Heat Treat Industry News Source. In this issue you can read about the 30 largest commercial heat treaters in North America-a “Monty” exclusive, learn about the passing of a well known individual in the heat treat industry, see photos of the largest horizontal vacuum furnace in the UK and 88 more pages of heat treat industry news.
This issue is sponsored by “Fluke Process Instruments”.
As always we appreciate your thoughts and comments.
Sincerely, Gord, Jordan and Dale Montgomery
https://themonty.com/wp-content/uploads/2020/06/themontyjune2020.pdf
www.themonty.com
905-271-0033
Today we are pleased to present to you a first for us at “The Monty” a video interview with Mr. Peter Kerbel, Vice President of Sales at furnace builder Ipsen. In this interview Gord Montgomery of “The Monty” and Pete Kerbel discuss a number of topics including how the COVID 19 virus is changing the way the world does business and what Ipsen brings to the market.
Our Monday Morning Briefing for June 1, 2020 starts off in Italy at a commercial heat treater by the name of Grupo TTN. The company is in the news today as they are just installing a very large batch IQ furnace built by Italian furnace builder Meapforni. The furnace has a capacity of 3,000 Kg (6,600 pounds) and is part of a modernization by the company. By way of background we have this summary of Grupo TTN from when we visited 1 year ago; “Gruppo T.T.N./Italy. Last week we had the chance to visit commercial heat treater Gruppo T.T.N., at their headquarters in Nerviano, Italy which proved to be a rather interesting experience. The family owned group consists of 9 locations, all in northern Italy with a total of 500 employees-now 9 plants and 500 employees would rank the company as one of the largest commercial heat treaters in Europe and even the world for that matter. As far as we can tell there are no processes the company does not have-Induction, Vacuum, Salt, Gas & Plasma Nitriding, annealing, Quench & Temper, Vacuum Carburizing-there is literally not a process we can think of that the company does not have.”
Dana Corporation in Lima, Ohio, USA suffered a small fire in their heat treat department last Thursday. This facility operates 6 batch IQ furnaces and a couple of continuous furnaces. “Employees of Dana Corporation evacuated the building after a fire broke out Thursday morning. No employees or fire department personnel were injured. The Bath Township Fire Department responded to the plant at 777 Bible Road, Lima, at 9:45 a.m. Upon arriving, firefighters observed light smoke coming from the building through doors at the ground level. Employees already evacuated the plant before the fire department arrived. Firefighters, Dana maintenance employee sand the Lima Fire Department got the fire under control within 30 minutes. The fire was located in a furnace used as part of the manufacturing process. The plant sprinkler system also activated. A damage estimate wasn’t available Thursday afternoon, pending an investigation by Dana officials. The cause of the fire was determined to be accidental and not suspicious. Firefighters were on scene for about two hours.”
Darrell Manente, Director of Vac Aero Furnace Manufacturing in Oakville, Ontario, Canada has retired. Darrell worked for Vac Aero for 33 years and led the Furnace Manufacturing division for 14 years. Vac Aero is a manufacturer of vacuum furnaces as well as a commercial heat treater. The company recently made our list of the largest commercial heat treaters in North America https://themonty.com/articles/largest-north-american-commercial-heat-treats-august-2020/
In other people news we see that Shelley Lusas have been appointed to Director of Marketing for Hubbard-Hall Inc. (their banner ad can be found on this page). “Hubbard-Hall Inc., the oldest independent chemical distributor in the U.S., announced the promotion of Shelley Lusas to Director of Marketing effective May 14, 2020. Lusas joined Hubbard-Hall in 2017 as a Marketing Manager and during her tenure, has shifted the company’s marketing efforts from a traditional approach to a more modern, digital and fully integrated approach that prioritizes Hubbard-Hall’s strategic product lines. In this newly created role, she will report directly to CEO Molly Kellogg and continue to manage Traci Conroy, Marketing Communications and Content Manager. “Since coming to Hubbard-Hall, I have been able to leverage all of those experiences to create integrated marketing campaigns and analyze the data for continuous improvements. I am excited to collaborate with our Sales and Technical Teams and promote their deep expertise in cleaning, finishing and treating chemistries and ultimately, help our manufacturing customers be more efficient,” stated Lusas. “During Shelley’s three years with the company, she has expanded the role, impact and reach of marketing and has proven herself to be an excellent marketer and effective team leader along the way, said Molly Kellogg, President/CEO of Hubbard-Hall. “I can’t wait to see what she does next.”
It was a number of weeks back that we mentioned Metex Heat Treating in Brampton, Canada had ordered another mesh belt furnace line. Here is the official press release; “CAN-ENG Furnaces International Limited has recently been contracted to design and commission a 6,600 lb/hr Continuous Mesh Belt Atmosphere Furnace System for Metex Heat Treating Limited of Brampton, Ontario, Canada. This new system will be commissioned for the hardening and tempering of high-volume automotive critical fasteners, stampings, and assembly components. The system includes a computerized loading system, mesh belt controlled atmosphere hardening furnace, oil quench system, mesh belt tempering furnace, pre and post wash systems and CAN-ENG’s PET™ System. This contract will represent Metex Heat Treating’s 6th CAN-ENG Furnace System, providing Metex with over 400,000 lbs./day of continuous atmosphere processing capacity in addition to batch and Induction services, which are provided to customers across Canada and USA.”
In a sign that things are finally getting back to normal we see that commercial heat treater Paulo is re opening their Monterrey, Mexico facility. This facility was shut down for approximately a month for the very good reason that their customers in the auto industry were also closed down.
Last week we mentioned the very upsetting passing of Don Robbins, President of Cambridge Heat Treating in Cambridge, Canada. This release tells us how Don will be remembered. “Don Robbins, 50, of Cambridge, passed away at home in the early hours of Friday, May 22, 2020. Don was the loving husband for 20 years to Tracey (Vincent) and amazing dad to Mikaela, Madi and Mack; whom he loved with his whole heart. Don was born in Cambridge on November 30, 1969 to Bob and Eleanor Robbins. Don and Tracey made a home together at Puslinch Lake where they raised their three children. Donny was a true family man. He was known for his quick wit, quirky grin and his kind and generous spirit. He was so passionate about his work at Cambridge Heat Treating (CHT), starting his fulltime career at the age of 15. He and his siblings took over the family business in 2000 and he became President of CHT in 2011. The company has just celebrated its 38th anniversary in business. Don was an active member of industry organizations and was a graduate of Metal Treating Institutes Young Executive Management Training Program. A hardworking man, Don also liked to play hard. He loved riding his Harley, taking trips to Silver Lake Sand Dunes to ATV and boating at the cottage. He also loved to fish and enjoyed fly in fishing trips. He held the world record catch and release for a 20 lb. test in 1994. He enjoyed spending time with his family whenever he could. Don was predeceased by his father Bob, nephew Chris and Bassett Hound Freddy. He is survived by his wife Tracey, his three children Mikaela, Madi, and Mack and his four legged son Murphy, his mother Eleanor, mother-in-law Karen Jessup, his brothers Peter (Lisa) and Randy (Barb), sister Cheryl Mortimer (Bob), brother-in-law Rob Vincent (Jill), nieces and nephews Michele, Stephanie, Brad, Jodie, Sawyer and Holden, as well as several aunts, uncles, cousins and friends. Due to COVID-19 restrictions, there will not be a funeral service. A celebration of life will be held at a later date in true Donny style. Donations in memory of Don can be made to the Grand River Hospital Renal Program accessed through the GRH website at www.grhosp.on.ca/help.” The photo below shows Peter and Don Robbins in the atmosphere portion of their facility.
Earlier this week we mentioned how HK 2020, the annual heat treat exhibition in Cologne, Germany will have a different format this year because of COVID-19. We spoke with Sonja Mueller of AWT who is head of the organizing committee for the event and this is what she has to day.
“The executive board of AWT has decided, that HK 2020, the yearly big trade fair and congress event in Cologne on materials technology issues will not take place as a physical event. The trade fair is cancelled this year and the congress will be held as an online event.”
Dear Sonja, this must have been a very hard decision for you.
“Yes, and with a heavy heart. So far, we are aware of only some of the conditions imposed by the Federal State of North Rhine-Westphalia which will apply to the staging of events and trade fairs after 31 August. But these conditions are sufficient for us to draw up a scenario for the event and decide that we do not want exhibitors, visitors and also us as the organizers to meet under these circumstances. Can you imagine an exhibition hall with individual stands distributed throughout the hall? With distance rules of 1.5 meters from person to person around and on the stands? A reception without buffet and music? In addition, we expect that there will still be travel bans in companies and statutory travel restrictions for foreign countries in autumn.”
What are the plans for the congress this year?
“We did not want to cancel the congress with its high quality on lectures with information about the current state of science and technology. The program is already complete. So, the congress will take place at the scheduled time as an online conference. The participants of the congress can meet and chat at the online platform. A situation with home office or short-time work could also be used for further training. At the moment we create the technical basis for it. The program with 32 lectures includes two days. On 21 October a scientific congress will be held and on 22 October a practioners congress. The final program will be published on hk-awt.de at the mid of June.”
What information could we get about the exhibitors?
“The website of HK with a detailed exhibitor directory will be updated currently and the exhibitors can publish product information and press releases on the “marketplace”.
What are your plans for the upcoming events?
“We all learn a lot about new event techniques at the moment, which will also offer new possibilities for the coming years. I think, we will become more international in the future because we can integrate more and more tools for virtual meetings into our traditional “physical” concept of HK. Our colleagues at Cologne trade fair this year present the first virtual fair.”
You can’t really imagine this as a concept for HK?
“Of course, I know, that a virtual meeting does not replace direct contacts from person to person, it’s more a kind of additional information. In addition to the presence event in the exhibition hall, we can perhaps also design a virtual exhibition hall next year. It offers a platform for companies from abroad to take part at a German event at manageable costs. We will hopefully celebrate a lively and healthy reunion in Cologne next October at HK 2021!”
The world’s largest commercial heat treater just released a trading update for the first 4 months of this year. This is a condensed version with the full version available at https://www.bodycote.com/
“Bodycote, the world’s leading provider of heat treatment and specialist thermal processing services, is issuing a trading update covering the four-month period from 1 January to 30 April 2020 (“the period”), ahead of the Company’s 67th Annual General Meeting, which will be held at 12.00pm today. COVID-19
Bodycote’s primary concern remains the safety and well-being of our employees, customers and the wider community. We have taken action to provide a safe working environment for our employees and prevent the spread of infection, generally exceeding locally mandated requirements. Where necessary, we have made changes to our processes to maintain social distancing and we have also facilitated technology enabled remote working where possible. At the request of our customers, some of our facilities have been refocussed to provide support for production of tooling for PPE or the production of ventilator and other medical equipment components. This activity has been undertaken as part of the company’s ESG responsibility and without regard to its profitability. Indeed, almost all of our facilities provide some designated essential services and have been operating throughout the period during which restrictions have been in place.
Trading; Activity levels were relatively normal through to the third week of March with the exception of China, where there was significant disruption in February with business since returning to pre-COVID-19 levels. From the third week of March, the business outside of China has been severely impacted by COVID-related lockdowns across a wide variety of geographies. In terms of our market sectors, since the COVID-19 related crisis has taken hold, we have seen the biggest immediate impact in our automotive and civil aerospace businesses, as many OEMs have had extended production halts. Bodycote’s diversification by market sector and geography has been a benefit. It is worth a reminder that Bodycote holds no inventory and supplies directly into our customers’ inventories. Accordingly, when customers are running down their inventories, Bodycote tends to see a sharp revenue decrease that is typically more pronounced than the revenue falls our customers see themselves. Once they stop destocking Bodycote revenues rebound to the ongoing levels of production at the customers’ facilities. When our customers restock the rebound of Bodycote’s revenues tends to be strong. At this stage, it is too early to reliably predict the trajectory of end market demand and our customers’ production, destocking and restocking patterns.
Total Group revenue for the first four months was 12% lower at £216m (down 11% at constant currency and 13% excluding the impact of acquisitions). The month of April experienced constant currency revenues 30% lower than in April last year (35% lower, excluding the impact of acquisitions). By swift and decisive action, we have significantly mitigated the impact of the revenue decline on the Group’s profitability, with the Group having positive Headline Operating Profit and generating net cash in each of the first four months of the year, including April.
Management actions; The pre-COVID-19 restructuring plan announced in March focused on our Classical Heat Treatment activities in Western Europe. With the onset of the COVID-19 pandemic, this restructuring plan has been extended in both scale and geography. Manning levels have been permanently reduced at facilities where the level of business is not expected to return to previous levels in the medium to longer term. Some facilities are being eliminated, with equipment redeployed to other sites. Overall, the production capacity in the Group will be largely unaffected but will be situated where there is greater long term demand and where it can be more efficiently utilised. The restructuring activities underway will reduce full-time employees by more than 700 – some 13% of total headcount. Together with savings in infrastructure from closed plants, c.£45m of annualised costs will be permanently eliminated from the business. Savings from the restructuring program will be realised progressively through 2020, with most being completed by year-end and the full annualised savings in place from Q2 2021. The cash cost of the expanded restructuring program is now expected to be c.£25m, versus the c.£15m announced at the Full Year results. The restructuring activity is designed to right-size our business, so that we will emerge from the current downturn in a strong position, with good, sustainable profitability and cash flow generation, as well as healthy margins and returns. Bodycote has also looked to contain costs by a further temporary reduction in full-time employees and careful management of ongoing expenditure on utilities, consumables and other overheads. The current level of cost containment measures represents savings of c.£7m per month, which is over and above that achieved so far through the restructuring program.”
