Specialty Metals Processing finds that, as it builds new lines, customers will come
July 8, 2011
Becky and Michael Miniea purchased processing company that was in dire financial straits in the months after 9/11, and with a commitment offerings and its customers, Specialty Metals Processing is now in a position to survive whatever this economy can throw at it.
Stampers aren’t the only ones that have had to reinvent themselves in this age of high-mix, low-volume work. Toll processors have had to rethink how to survive in these challenging times as well.
Michael Miniea, who has more than 40 years in the metals processing business, has seen such a company on its deathbed, waiting for divine intervention to wake it from its financial coma. In the months following 9/11, Specialty Metals Processing in Ohio watched all of its buffing work on stainless steel coil for the truck and trailer industry disappear; with 95 percent of its work being tied to that industrial sector, the toll proc-essor suffered a blow from which it could not recover without assistance.
Luckily for the company, Miniea was in a position to help. After selling his previous company, a toll processor of carbon steel, he was looking for another opportunity to jump into the metals processing business. Being only 52 at the time, he had a lot of life left in him.
So in late 2002, Miniea purchased the dying company with his wife, Becky, who was a vice president of sales for a manufacturing company before settling down with Michael during his hiatus from the metals business. The couple saw potential in Specialty Metals Processing, but it required additional equipment to be installed.
“The challenge was that we really had no customers coming in and didn’t have much to offer,” Becky said with a laugh, looking back on those early days.
That challenge soon fell in Becky’s lap when Michael asked her to take a look at the sales effort. That was the first of many decisions that have helped the company avoid the situation it was in when it was put up for sale.
Becky started making calls and getting a lot of rejections. The mills and service centers that were working with other toll processors really saw no reason to switch. Even with the dead ends, she was making headway. Specialty Metals soon started getting the jobs that no other metals processor really wanted—which was primarily secondary material that had to look like prime material.
“Really, it helped us a lot,” Michael said. “It made our operators really understand the difference between prime and secondary and the issues that came with running secondary material.
“Now when we are running prime material, it’s easier to understand what you are looking for,” he added.
In 2002 Specialty Metals Processing served a small niche in the metals manufacturing business—coil buffing stainless steel, polishing 48-in.- wide nonferrous sheet, and cutting material to length. That’s why the Minieas quickly added a 60-in. coil slitting line after purchasing the business. That was a very tight fit in its 45,000-square-foot leased shop.
When Michael purchased four more grinding lines in 2003 from a liquidation sale of a large OEM, they quickly leased another 50,000 sq. ft. down the street in Akron, Ohio.
“When we turned down jobs because we couldn’t handle something, I’d say to Michael that people were asking for this or that, and he would start to look for a piece of equipment to seize on the opportunity. We would start studying the market to see if anyone else out there was doing it. As a result, we started creating additional niches for ourselves,” Becky said.
“We were always pretty confident that if you build it, they would come—even before we ever purchased additional equipment,” she added.
Customers came because Specialty Metals Processing had built a reputation of taking on difficult jobs and maintaining tight turnarounds—typically three days—for processing nonferrous plate, sheet, and coil. Because the company was now able to slit, cut-to-length, grind, buff, and sheet polish, it had become a one-stop shop for those customers that weren’t interested in seeing their material shipped to one facility to be finished and then to another facility to be slit, for example.
Michael’s processing experience and mechanical aptitude aided the aggressive expansion of lines. He could engineer the line and rework the used equipment to get the best performance out of it. Specialty Metals Processing couldn’t have afforded the expansion any other way.
With the desire for more equipment came the need for more space. In 2008 the facility and its 30 employees moved into a 175,000-sq.-ft. building on 60 acres in Stow, Ohio. At that time the Minieas added a 36-in. slitting line and a cut-to-length line for coils up to 72 in. wide (see Figure 1).
As with most of the equipment, design and engineering are done in-house. Welding and machining of line components are outsourced. Cleveland Motion Controls provides the control and software expertise to ensure the lines can deliver the tight tolerances—±0.003 in. on the plate grinding lines, for example. Specialty Metals Processing takes care of the final assembly.
It’s important to point out that Michael doesn’t just set the lines up to run as they were intended. He has enough knowledge to tweak the technology to entice better performance.
For instance, a newly installed coil-to-coil polisher for up to 62-in. coils is being installed now and is going to work with gauges that the marketplace hasn’t seen before, according to Michael. Most appliance customers assume that metals processors can polish coil down to 0.024 in. thick, but can’t handle anything thinner; Specialty Metals Processing is confident that it can handle coil that’s 0.015 in. thick, perhaps even 0.013 in., once the shop floor gets enough experience in working with the surface-sensitive stainless steel material.
“It’s kind of a new mousetrap versus a normal machine in the marketplace,” he said.
He won’t reveal what exactly he has changed, but Michael did say that it’s all related to the way the abrasive approaches the metal. Get the tensioning just right, get a result not many expect.
So Specialty Metals Processing can polish very thin gauges, as can be seen, but also work with plate up to 24 in. thick. That range of offerings, along with its sheet grinding and coil processing capabilities, catches the attention of customers.
The quality results keep them.
“The quality portion of the business is the most important thing out there,” Michael said.
That’s why the lines at Specialty Metals Processing don’t run at 1,500 feet per minute like a typical slitting line might. The company is dealing with a different beast—smaller coils, usually around 22,000 lbs., of surface-sensitive material.
For instance, a blanking line could run up to 300 FPM, but it is more likely to run at 100 to 150 FPM so that material inspection can take place or paper can be inserted for material protection.
“With quality issues, it never ends. You are always chasing it and trying to do better,” he added.
Titanium is particularly challenging for Specialty Metals Processing. When grinding alloy titanium plates for the customer, the company has to hit a specific gauge, which the mills are unable to do. This calls for grinding off the alpha case—the top of the plate where the titanium surface has come into contact with the atmosphere to create an oxide layer—and then grinding the plate to the specified tolerance and with a tolerance as tight as ±0.003 in. It’s a slow and tedious process.
Also, titanium grinding produces titanium dust—an potentially explosive byproduct. If the titanium dust hangs in the air or is allowed to accumulate in a layer on the ground, it becomes a bomb waiting to blow. The presence of a spark or even intense heat can create a flash fire that can engulf the immediate area very quickly. Obviously, this makes housekeeping a top priority on the shop floor (see Figure 2).
Specialty Metals Processing only jumped into titanium grinding at the suggestion of its customers. After the toll processor purchased its first large grinding lines for stainless steel, customers thought it should try to grind titanium plates. The request was selfish in a way because large titanium plate processors are few in number and mostly located on the West Coast.
“Our suppliers helped us and educated us. But I’m a quick learner too,” Michael said.
By embracing titanium processing, the company has positioned itself for what looks to be an exciting future. Even though the aerospace manufacturing business stalled like everything else around 2008, it’s expected to take off because of the emergence of a global middle class with a desire to travel. Michael said he expects plenty of titanium plate to be sent his company’s way when manufacturing gets into full swing. And that’s not just Boeing that he’s talking about; it’s aerospace companies from all over.
The toll processor is so bullish about its future that it just installed a gantry grinder (see Figure 3). The grinder enables the company to tackle oversized sheet and plate material—up to 12 ft. wide by 100 ft. long by 24 in. thick. The grinding head can handle any type of stainless, titanium, or nickel alloy.
“Adding that equipment—that is really what drove our success,” Becky said. “Because every time you add a new piece of equipment, it allows you to go back to the old customer to tell them about your new capability and seek out new customers as well.”
Specialty Metals Processing is now up to 16 processing lines, and the current building is filled to capacity. The Minieas said the company will spend 2012 not acquiring new equipment or expanding the building, but working on internal issues—enhancing the IT systems, investing in the physical plant, and charting a course for the future. It can handle almost any grinding and polishing request from a mill, service center, metal former or fabricator, and its customer base is now spread over more than 10 industrial segments. The job now is to properly service the current customers and find new ones to fill up the shop floor’s extra capacity.
“The reason that we got the opportunity to buy this company is because truck and trailer died out after 9/11. Anytime you hang your hat on one industry, you are in trouble,” said Michael.
The Minieas believe that the company is diverse enough now to survive almost anything that a bad economy can throw their way. The Great Recession provided the toughest test to date, but Specialty Metals Processing survived. It’s a fast learner and doesn’t forget the lessons of the past.S