Outokumpu Makes Commitment to
Stainless Plate Production in the U.S.
This Finnish specialty metals producer recently completed $58 million worth of upgrades at its facility in Indiana, its only
quarto plate operation in the Western Hemisphere.
By Dan Markham, Senior Editor
When the economic crisis of 2008 started bearing down on the metals industry, the first reaction of most mills was to put the brakes on capital investment. Expansions and upgrades were shelved, temporarily or permanently, to improve liquidity in a suddenly moribund market.
|Outokumpu's $58 million investment in New Castle included a new annealing, shot blast and leveling line at the facility.
Outokumpu faced similar choices, and made similar decisions, at many of its facilities. But when it came to its New Castle, Ind., quarto plate facility, the Scandinavian specialty metals producer opted to press forward with its capital improvement plans. The company recently completed a $58 million upgrade at the operation, one of four production facilities it maintains in North America, but the only one producing the individually rolled wide and thick quarto plates.
“At the end of 2008, when we saw this enormous change in the business environment, we had to consider all of our investments and make decisions on which ones would continue and which ones would be postponed. This one in New Castle is one we decided to continue,” says Juha Rantanen, CEO of the Outokumpu Group. “We believe the markets are coming back—no one knows when—but when they do we will be ready.”
“We see tremendous potential in the specialty steel being produced at New Castle,” says Michael Stateczny, company vice president and general manager of plate products. “The investment program impacted nearly every phase of the operations and will yield best-in-class manufacturing capabilities for products in which Outokumpu already has a very strong market position.”
Steelmaking in New Castle has a long history, dating to the early 1900s when Charles Mouch erected the first rolling mill to produce carbon steel for shovels and other agricultural equipment. Several fires and one tornado curtailed production on a few occasions, but the Indiana Rolling Mill Company continued to churn out steel products. In 1927, a five-ton furnace was installed at the facility. Two years later, the mill and a sister operation in Galesburg, Ill., were acquired by Borg-Warner Corp. to provide automotive and agricultural steel.
During World War II, the mill produced carbon steel to be used in armor plate and tanks, and also rolled out its first stainless steel for canteens and other kitchenware. The mill’s stainless operations continued to grow with a 1964 expansion that allowed the company to cast stainless steel in slab form.
In 1971, Borg-Warner sold its cold-rolling operations on the north side of the highway to Allegheny Ludlum, and the rolling mill on the south side to Swedish company Axel Johnson. Another Swedish company, Avesta, later owned the property before its 2001 merger with Finnish steelmaker Outokumpu.
While the many production changes and ownership shakeups gave New Castle a rich past, they also left it with significant drawbacks in the here and now. Improvements at the 100-year-old facility were necessary for the plant’s continued usefulness, Stateczny says. “It was an old facility, and our material flow was not very good, quite frankly. This investment has allowed us to correct a lot of those sins.
“The demands of our customers were not getting any less, and the grades produced are extremely difficult to make, so we needed state-of-the-art equipment,” he adds.
Among equipment upgrades funded with the $58 million investment was a new in-line annealing, shot blasting and leveling line. The shot blasting removes scale left on the plate after the annealing process.
At New Castle, slabs acquired elsewhere are passed through the company’s hot-rolling mill multiple times to reduce thickness and increase width and length. The rolling mill there is particularly well-suited to rolling special grades, the company says.
At a Glance
Outokumpu New Castle
549 West State Road 38
New Castle, IN 47362
Key Personnel: Mike Stateczny, senior vice president, plate products; Chris Streit, vice president, operations.
Products: Stainless plate in duplex grades LDX 2101, Outokumpu 2304, 2205 Code Plus Two, Outokumpu 2507.
Processes: Hot-Rolling, Annealing, Shot Blasting, Stretcher Leveling, Roller Leveling, Pickling, Shearing, Plasma Cutting.
Markets: Distribution, Food and Beverage, Pulp and Paper, Industrial Tanks, Water Distribution, Coal, Nuclear and Petrochemical Energy, Architecture.
After annealing, the company levels the plate using stretcher or roller leveling equipment. All standard-grade plate at sizes through 3/8-by-96 inches is stretch-leveled, providing superior flatness. Plate too thick or too strong to be stretched is roller leveled. Outokumpu claims to be the only domestic plate producer to guarantee that all of its plate mill plate through 2-inch thickness and 96 inches wide will meet half-standard ASTM A 480 flatness tolerances.
In addition to the new annealing-shot blasting-leveling line, the company made other upgrades to its existing 120-inch-wide annealing and pickling line, including a new plate up-ender, plate grinder and environmental controls.
Other improvements were designed to increase flexibility and efficiency outside the production process. Notably, Outokumpu added a 16,000-square-foot shipping bay with a 70-ton crane and staging and shipping areas large enough to accommodate three trucks under roof.
“The improvements to the shipping area will help us get more trucks loaded and out to our customers faster than before,” Stateczny says.
Those upgrades include a truck tarping area to allow shipments to be secured on-site and indoors, while not holding up the loading process for other trucks. “With the smaller warehouse, we had trucks getting loaded outside, or getting tarped indoors while another truck was waiting to pick up an order,” Stateczny says.
Outokumpu’s main customer segment is service centers, which account for about two-thirds of its volume. “Service centers are of paramount importance to us because not much of what you see going out of this plant gets used in the form it’s shipped. It’s profiled, it’s bent, it’s edge-prepared. We’re not set up to do that here. We’re a manufacturing facility that wants to produce full-sized product,” Stateczny says.
The recent upgrades allow the mill to work on 20 different stainless grades, widths, thicknesses and surface requirements, one after another. Specialty grades produced at New Castle include lean duplex LDX 2101, Outokumpu 2304, 2205 Code Plus Two and super duplex Outokumpu 2507. “Shortening the production time for material is one big request we hear from service centers,” Stateczny says. “These improvements will allow the New Castle mill to help address that need.”
Work on the mill was not designed to greatly increase capacity, which remains roughly 70,000 tons annually. For Outokumpu, it’s more about capabilities. “The notion of operational agility is critical to us, because when you’re in a niche business like this, you don’t get a lot of orders for thousands of tons of the same stuff. We’re making one piece that’s six inches thick. It’s the ability to handle product diversity that we’re most focused on,” Stateczny says.
The company’s quarto plate, which is also produced for the European market at its facility in Degerfors, Sweden, has been used in such high-profile projects as Chicago’s bean-like Cloud Gate sculpture and the United States Air Force Memorial in Arlington, Va. While those photogenic projects are nice in the marketing brochures, they are not the material’s bread-and-butter application.
“We like to show the sculpture in Chicago and the beautiful memorial in Washington, but very little of our material goes into those applications,” Stateczny says. “Most of it is found in chemical plants, refineries and smoke stacks—very aggressive environments.”
Outokumpu sees particular strength in these types of markets in the coming years. Leif Rosen, senior vice president, Outokumpu Special Coil & Plate, says societal trends justify the company’s investment in its quarto plate facilities. “The drive to get rid of coal and other high-emitting types of energy sources, for sources such as nuclear, is an opportunity for a plant like this. There also will be more investment in water treatment and water facilitation in the next 20 years,” he says.
“It’s an investment that was timely and will pay dividends in the mid- to long-term based on the world’s need for fresh water, clean air and renewable sources of energy,” adds Stateczny.
Outokumpu Group CEO Rantanen says the timing was perfect for the project, despite the lousy economic conditions. “The best investments are the ones you make when the market is down because then you are ready when the market is up again.” n