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The surprise
revelation that brushing hot-rolled steel can give it almost magical
corrosion-resistant properties has transformed The Material Works
mission from just toll processor to metals innovator.
By
Tim Triplett,
Editor-in-Chief
Six
years of research, trial and error are finally starting to pay dividends
for The Materials Works, Ltd., Red Bud, Ill., whose development
of its patented SCS process has brought a dual focus to the companys
strategy.
TMWs mission is two-pronged: to be a toll processor
and an innovator of new processes, says President Kevin Voges.
Both parts have very good synergy and feed off each other.
TMW
began as an offshoot of Red Bud Industries, a maker of metal processing
equipment. Kevins father, Kenneth Voges, a pioneer in coil
processing technology, founded RBI in 1959. In 1992, he spun off
TMW as a separate, independent entity. In 2000, TMW expanded from
its original 90,000-square-foot facility in Red Bud to a 216,000-square-foot
processing center on the Kaskaskia River a few miles outside of
town. Including a Granite City, Ill., joint venture with Heidtman
Steel, TMW operates facilities totaling about 400,000 square feet.
Its 150 employees process 350,000 tons of steel annually, offering
conventional slitting, blanking, cut-to-length and leveling services,
in addition to the companys proprietary SCS brushing process.
TMW
has created considerable buzz in the industry in the past two years
with its strip-cleaning system for brushing both cut-sheet and coiled
steel. SCS brushing gives hot-rolled black commodity-grade steel
a clean, dry, cold-roll-like surface that inhibits rust without
the need for oil or coatings. The process is economical, kind to
the environment and should make a majority of pickling and oiling
operations obsolete, Voges claims. To date, he adds, 55 percent
of SCS applications have replaced pickled-and-oiled, 35 percent
have replaced conventional hot-rolled black and 10 percent have
replaced cold-roll.
The
original SCS system, launched in 2003, was designed to brush stretcher-leveled
cut sheets. In August, TMW commissioned its first coil-to-coil SCS
line in a joint venture with Heidtman Steel, Toledo, Ohio. TMW operates
the line for Heidtman out if its Red Bud processing center.
Finding a way to brush a continuous ribbon of coil rather than cut-sheet
blanks opened up a huge new market potential, Voges explains. A
lot of applications need steel in coil, he says, such as high-volume
stampers and tube producers. Once its in sheet form,
you cant run it through a coil slitter.
Each
line is custom built by Red Bud Industries, TMWs former sister
company. The original sheet line was designed to brush the metal
with a 3M Scotch-Brite pad. TMW has since developed an alternative
brush using nylon-coated silicon carbide bristles that follow the
contours of material that is not perfectly flat. Both type of brushes
are used, depending on the needs of the system. The brushing process
removes all but a microscopic layer of scale, which inhibits rust
and provides a clean, paintable, regular-bright surface comparable
to cold-roll steel, but at a much lower cost, Voges says.
The
Heidtman-TMW coil-to-coil line is made up of an uncoiler, crop shear,
roller leveler (built by Butech Inc.), edge trimmer, SCS brush machine,
which brushes and rinses the steel, a drying table and recoiler.
It has a capacity around 20,000 tons per month, but is currently
producing about 2,000 tons as customers, and potential customers,
test the SCS materials performance in their particular applications.
This is a very new product and companies are proceeding carefully,
Voges says, though customers are already seeing great results.
He forecasts that the line will be running at full capacity by mid-2006.
SCS
generates other toll processing opportunities, he notes. When
you get an order for SCS material, that coil goes over to the slitter
and then to the stretcher leveler. Its one order, but we get
all three processing jobs because of SCS.
Though
the sheet line has been in operation for less than two years, and
the coil line for only a few months, the technology is already beginning
to proliferate. In addition to the two lines housed at TMWs
facilitythe original sheet line and the first coil lineHolvoet,
a service center in Ghent, Belgium, is producing SCS cut sheets.
Heidtman has ordered a second SCS coil line in a joint venture with
Fulton County Processing in Delta, Ohio, and plans to install a
sheet line at its Butler, Ind., facility next year. Layhill Processing
in Knoxville, Tenn., will commission its new SCS sheet line in January.
TMW has also received an order from Servosteel, a British toll processor.
TMW is likely to invest in another line soon through a joint venture
with an unidentified Portage, Ind., company, he adds.
Borrowing
the term from a popular business book, Voges calls his SCS process
a technology accelerator. Though its an exciting
new venture for TMW, as well as Red Bud Industries, which supplies
all the equipment, Voges vows his company will not lose its focus
on serving toll processing customers of all types.
Our
SCS technology is a wonderful process that will most definitely
help to drive TMW, but it wont become TMW, he says.
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QUICK
FACTS
The
Material Works, Ltd.
101 S. Main St.
Red Bud, IL 62278
Phone: 618-282-4200
Fax: 618-282-4201
Web: www.thematwks.com or www.scsprocess.com
Key
Personnel: President Kevin Voges, Vice President of Engineering
Alan Mueth, Vice President of Operations Eric Fritsche, Director
of Sales Chris Liefer
Size:
150 employees; annual processing 350,000 tons
Facilities:
400,000 square feet including three facilities in Red Bud
area and joint venture in Granite City, Ill.
Services:
Slitting, blanking, cut-to-length, stretcher leveling, brushing
Equipment:
One slitting line, three blanking lines, three cut-to-length
lines, two stretcher-leveler lines and two patented SCS processing
lines
New
SCS Coil Line Specs: 48 feet wide by 90 feet long, throughput
20,000 tons of hot-roll black per month, 60,000 psi, thickness
0.030- to 0.250-inch, coil width 24 to 75 inches, maximum
coil size 60,000 pounds
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The
Economics of SCS
Through
its patented SCS strip-cleaning system, TMW has essentially
created a new class of steel productone that no one
else can sell without paying TMW a royalty.
TMW
hopes to profit from its patent in two basic ways: by selling
licensing fees or through joint ventures, explains TMW President
Kevin Voges. In order to produce SCS, a company must pay TMW
a licensing fee of $1.75 million before Red Bud Industries
is authorized to build it a new SCS processing line.
TMW
would prefer to set up joint ventures with processors, in
which it waives the licensing fee in exchange for an ongoing
percentage of the profits from each line. In some cases, TMW
will reinvest revenues from the licensing fees to help a joint
venture partner cover the cost of the equipment, in exchange
for a larger percentage of the business.
The
cost of an SCS sheet line is about $1.4 million, or $3 million
for an SCS coil-to-coil line, Voges estimates.
TMW
envisions a far greater return on its patent by helping other
companies establish SCS processing businesses, which will
produce an ongoing revenue stream, vs. simply licensing the
process. In fact, it will restrict licenses to companies in
secondary markets that are unlikely to compete with joint
venture partners in major markets.
TMW
is taking great care to position and maintain SCS as a quality
brand. We keep the quality consistent. We are very critical
about the companies that are going to be SCS-ing to make sure
they are doing it the right way, Voges says.
TMW
estimates the cost to produce SCS material at about $3.50
per ton, while the finished SCS product sells for $20 a ton.
In two years, at half capacity, we would make as much
on a joint venture as we would from a licensing fee. The difference
is that after two years, it (the venture) continues to generate
money from the operation of the SCS equipment, Voges
says.
TMW
expects to license or partner with mills, toll processors,
service centers, tube producers and OEMs of many types, who
all stand to benefit from the inherent efficiencies and environmental
benefits of SCS steel. Running at full capacity, an SCS coil
line can process roughly 20,000 tons a month at a cost of
less than $75,000. To pickle and oil the same tonnage would
cost around $350,000. That $275,000 savings enables a processor
to pay off the cost of an SCS line in less than a year, Voges
says.
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