What's hot—What's not

August 7, 2008
By: Vicki Bell

This post isn't about the dog days of summer, nor is it a list of Paris Hilton's "that's hot" endorsements. Rather it's a glimpse of one metal bending company that has a $7.4 billion backlog of projects—now that's hot.

It also is about the hottest manufacturing sectors in the U.K. And it touches on something that definitely is not hot.

Aug. 4, Barron's, a publication for investors, profiled Chicago Bridge & Iron, a company that has been in business for more than a century and not only has survived, but is poised for significant growth. Why? Because the company specializes in energy-infrastructure projects, including liquefied-natural gas (LNG) projects, which account for 55 percent of its revenue; refining, nuclear, and petrochemical work; and steel plate structures, like water- and oil-storage tanks. And infrastructure spending is projected to continue for decades.

According to Barron's, the company traces its history to 1889, when a wooden bridge builder, Horace Horton, joined forces with a Kansas City business to form a metal-fabricating company on Chicago"s South Side. The company now is based in the Netherlands, but its operating headquarters is located in Texas. It still maintains more than a dozen facilities in the U.S., including one almost in my backyard.

Infrastructure is a hot sector for fabricators worldwide, but it didn't make the list of the U.K.'s fastest growing manufacturing segments, as reported in the Financial Times. What did?

No. 1 with a bullet (pun intended) is the weapons sector. Reportedly, the output of weapons—a subset of the much broader military equipment industry—has grown by an average of 12.4 percent a year in the five years from 2002 to 2007, the best showing of any segment of manufacturing, and well above the average annual growth in U.K. manufacturing of 0.6 percent over this period.

No. 2 is the motorcycles/bicycles sector, which has grown by 8.6 percent a year over the reported period.

Completing the list in descending order are aerospace (6.9 percent), industrial equipment (6.0 percent), concrete products (5.4 percent), domestic appliances (4.9 percent), metal tubes (4.8 percent), iron and steel (4.6 percent), fish processing (4.4 percent; the British do love their fish and chips), and instruments (4.3 percent).

Is it too much of a stretch to think that the metal tube and iron and steel growth is due in part to metal theft creating the need for replacement material? Metal theft in the U.K. and elsewhere was illustrated in a recent blog post on thefabricator.com. It also was the topic of an article in the Atlanta Journal-Constitution Sunday, Aug. 3, that began by saying:

"The pews are empty at Calvary Temple Holiness Church on Atlanta's scorching summer Sundays. Scrap-metal thieves have stripped the East Atlanta church of its air conditioning.

"'They just completely destroyed them beyond repair,'" church board chairman Richard Bradford said. The thieves caused more than $30,000 in damage getting at less than $50 worth of copper."

Hot has many meanings. The church's parishioners are hot—both from the heat and under the collar because of the crime.

The stolen metal is hot.

Metal theft is a hot topic, but the crime is not at all hot in the coolest sense of the word.

Vicki Bell

Vicki Bell

FMA Communications Inc.
2135 Point Blvd
Elgin, IL 60123
Phone: 815-227-8209