Metal Center News
Minimize
  
July 2014
Minimize


New Chapter for Old Mill

Nearly three years free of its Chapter 11 bankruptcy filing, this 166-year-old copper producer has new leadership—and a new lease on life.

By Tim Triplett, Editor-in-Chief

For a brief time, it appeared Hussey Copper would rank among the many casualties of the Great Recession. Following an unexpected intervention, the venerable copper mill now stands strong among the survivors.

Faced with heavy debt in an economy too slow to recover, the Pittsburgh-area producer of copper products, whose roots date all the way back to 1848, was forced to file for Chapter 11 bankruptcy protection in 2011. Five suitors showed up for the court-mandated bankruptcy auction that September, according to published reports, including Revere Copper Products, KPS Capital Partners, Nehoshet Enterprises and KHC Acquisition. In the end, Libertas Copper, a unit of Patriarch Partners, outbid the others, paying $107.8 million for the company.

Unlike an expected strategic buyer such as Revere, Patriarch Partners was a relative unknown in the copper market. The interest from the New York-based private equity firm and its outspoken principal Lynn Tilton brought an element of surprise to the proceedings. Shortly after acquiring the mill, Patriarch named Joseph Mallak its president and chief executive officer. Mallak formerly held executive positions at Aleris International, Century Aluminum and Ford Motor Co.

"Lynn Tilton is a brilliant, dynamic lady. She saw the value proposition. Like with many of her other acquisitions, she felt that under the right situation this could be a good long-term investment," Mallak says.

Founded by Wall Street veteran Tilton in 2000, Patriarch Partners’ holdings include about 75 companies with annual revenues of more than $8 billion. Tilton's personal mission is to save American manufacturing jobs by saving American companies. "She is very passionate about her charter to help get American manufacturing back on its feet," Mallak says.

Hussey was one of many victims of the nation's financial collapse, which was exacerbated by wildly fluctuating copper prices. "It was an old world company that had continued to operate in the same manner without a lot of vision to change to fit the more global economy," Mallak says. The support of a high-profile investor like Patriarch Partners helped the mill shed the stigma of bankruptcy fairly quickly. "Having the backing of Lynn Tilton, with her leverage in the banking world, is a huge benefit to us," Mallak says.

He gives Hussey's service center customers considerable credit for their ongoing support. "Any time you go through a bankruptcy like we did, people are concerned and hesitant to do business with you. It took us a little while to build the relationships with our distributors back up. They have worked with us and been patient with our changes. They now understand who we are and the value proposition we bring to the table. They’ve been great partners in rebuilding our business over the last few years," Mallak says.

Hussey operates two mills, its main melt house and rolling mill near Pittsburgh, which produces copper and copper-nickel sheet, plate and bar, and a facility in Eminence, Ky., which primarily produces copper bus bar. It also runs a fabrication plant in Eminence, making parts for various corporations, as well as a distribution and fabrication facility in Puerto Rico, and third-party distribution centers on the West Coast and the border of Mexico. All total, it employs about 570 workers and claims annual revenues in excess of $500 million. About one-third of Hussey’s business goes through distributors.

While Hussey has cut costs and instituted lean processes, it has not downsized. In fact, the company has grown considerably, Mallak says, particularly on the fabrication side. "Our bread and butter will always be in commodities--we are the largest bus bar producer in North America--but where we are really focused is on expanding our downstream fabrication business. We want to make more parts for people."

He sees another major opportunity in the marketing of antimicrobial copper. Hussey now has its own branded line of EPA-registered antimicrobial products, including door handles, push plates, switches, railings, counters and plumbing fixtures designed for commercial, home and healthcare use, dubbed MD-Cu(29).

Studies have shown that copper has the natural ability to kill 99.9 percent of the bacteria that comes in contact. Customers, especially health care facilities, are starting to buy into the inherent infection-fighting benefits of copper on touch surfaces, even if it costs a bit more than conventional stainless or chrome-plated hardware, Mallak notes. "We are actually making end products that are going into hospitals and schools. We have also launched an engineering service to work specifically with hospitals to help them cover as many surfaces as is economically possible with antimicrobial copper. We’re starting to make some nice penetration into those markets."

Mallak does not know how long Patriarch will maintain its investment in Hussey, but Tilton and Patriarch are not in the business of buying companies just to pull out cash and spin them off. "Hussey has done very well. If the right situation came along, I think she would consider selling. But it’s not all about the money. She's made her fortune. It's about when she feels the time is right for a company to go out on its own."

Indeed, with Patriarch's backing, Hussey might even become an acquirer. "It would have to be the right situation, but if you look at the current players and their owners, it is only a matter of time until more consolidation happens," Mallak says.

Where Hussey has survived, many others have failed. The red metals market has experienced a major shakeout of both producers and distributors in the last two decades. Mallak sees room for even more. "To be globally competitive, I believe there needs to be additional consolidation in North America. We need a couple of big, strong players that dominate the copper and brass industry."

As for the current conditions in the copper market, and the direction of the copper price, Mallak is as mystified as anyone else. "I have no idea where it's going. I wish I did. We are pretty well hedged. We are making our money off delivering good quality products to our customers, not off being a trader."


At a Glance

Hussey Copper
100 Washington St.
Leetsdale, PA 15056-1000
Phone: 724-251-4200, 800-733-8866
Fax: 724-251-4243
Email: info@husseycopper.com

Facilities: Mills in Leetsdale (Pittsburgh), Pa., and Eminence, Ky.; fabrication plant in Eminence; distribution center in Puerto Rico.

Products: Copper bus bar, construction copper sheet, transformer winding, copper tape, copper-nickel alloy sheet and plate, and copper strip, sheet and plate. Also, MD-Cu(29) branded antimicrobial solid-surface copper products.

Fabrication Capabilities: CAD, CNC milling, drilling, turning, bending, forming, punching, die making, extruding, finishing, polishing, machining, silver and tin plating, waterjet cutting, welding.


From the Editor's Desk
Minimize
October 2014: It's Your Job to Help Fill the Skills Gap
More...
 
Pause
Business Practices and Technologies
Minimize
October 2014: Mixed Outlook for Global Metals Prices
More...
The Cutting Edge, a service center technology supplement to Metal Center News
More...
Summer 2014
More...
 
Pause
New Products
Minimize
Trumpf Expands Range on TruMark 5000 Series
More...
Koike Aronson Debuts New Plasma Cutter
More...
Miyachi Unitek's Sigma XY
More...
New TMC is Messer's Largest Cutting Machine
More...
Laserdyne 795 XLZ Designed for 3D Parts
More...
Mazak's STX Champion Cuts Thick Sheets
More...
 
Pause
Directories
Minimize
Metal Center News 2014 Directories: Print or Digital copies are available for $85 U.S. for each copy.
 

 
2014 Metal Distribution Directory  
(Not Published on This Web site)
Metal Center News' Spring Metal Distribution Directory is your on-line guide to Metal Producers, Equipment Manufacturers and Software companies.  



 
2014 Directory of Master Distributors
(Not Published on This Web site)
The Metal Center News Directory of Master Distributors—distributors who sell to other distributors—is an invaluable tool for service centers seeking new sources for special or hard-to-find products. Master distributors play an important role in the marketplace, giving service centers an alternative to buying in mill quantities and helping to remove redundant and excess inventories from the distribution channel.



 
2014 Directory of Toll Processors
(Not Published on This Web site)
Metal Center News' annual toll processing directory is a simple-to-use resource to help companies locate service providers that can meet their specific processing needs.


Privacy Statement  |  Terms Of Use
Copyright by Metal Center News



Sunday, November 23, 2014