By Andrea Svendsen, Managing Editor.
Editor’s Note: This is a slightly extended version of an interview that first appeared in April 2017 issue of Light Metal Age, as part of a longer article on the the current status and outlook of the aluminum billet industry in North America. The original article included interviews from executives at Alexin, Hydro, Matalco, Nanshan America, UC Rusal, and Service Center Metals, each of which will appear online over the coming weeks.
Robert (Bob) Convery has been with Matalco Inc. since August 2014, serving as manager, Sales and Marketing. Prior to this, he has worked in the aluminum industry for over 20 years, beginning his career with Alcan Aluminum in Montreal, QC, Canada. Thereafter, he held several sales and marketing management positions with Metallurg, Inc./MCL (now AMG Advanced Metallurgical Group), a global producer of high quality products for the ferrous and non-ferrous metals industries, including aluminum alloying ingredients. Metallurg was one of the first suppliers of alloying products to Matalco when it started production in 2005.
What is the current status of Matalco’s aluminum billet business? What are the main geographic markets that the company serves?
Matalco, owned by the Giampaolo Group, supplies billet to the extrusion and forging industries, the later representing approximately 15% of sales volume and where the aluminum billets we supply are forged into truck and trailer wheels. The company has three plants — Brampton, ON, Canada; Canton, OH; and Lordstown, OH — and supplies high-quality billet to the extrusion and forging (truck and trailer wheels) industries. The Brampton plant was Giampaolo’s first foray into the aluminum industry. The greenfield project involved an initial investment of $75 million, made its first cast in December 2005, and had a rated annual capacity of 200 million lbs (currently producing +250 million lbs/yr). Matalco purchased Thakar’s aluminum plant in Canton in 2010, injecting nearly $20 million to bring it up to speed. Canton is a major supplier of forging stock, producing 130 million lbs/yr. Their system is ideal for handling large volumes of aluminum chips and turnings. And of course, our $100 million state-of-the-art Lordstown facility, which was commissioned in 2016. Volume is being ramped up, with a third shift added in early March. Their expected daily output at full capacity is ~1 million lbs.
North America is our main geographic market, typically focusing on areas within 500 miles of our plants. With the majority of our customers we have tolling arrangements and bring back their generated scrap for further processing. From a logistics perspective, it would not make economic sense to bring scrap back from locations outside the 500 mile range. However, Matalco has the benefit of having a rail spur on site in Lordstown, and we’re exploring the logistics of shipping material greater distances using rail.
How much of the company’s aluminum billet is made from prime versus remelt/recycled material?
Primary aluminum usage is 25-30% depending on the availability, type of scrap consumed, and the grades of alloys produced. Our objective is to minimize the addition of alloying ingredients by sourcing the hardeners through the scrap. Some of the new alloys, especially those in the automotive sector, contain higher levels of hardeners (Cr, Mn, Si). When consuming this type of scrap, additional primary aluminum is required to dilute the melt to meet the required chemical levels in the typical 6xxx soft alloys that we produce. Also, in June 2016, there was tightness in the scrap market, and as a result we were forced to consume more prime. Due to its process and alloy mix, primary use at Canton is typically very low.
How does the company add value to its aluminum billet operations?
Number one—by listening to and working with our customers to meet or exceed their expectations. Tolling/converting is definitely a big feature that we provide as a remelter. The extrusion and forging processes generate significant quantities of scrap, which must be collected and removed efficiently, otherwise it becomes a problem, even a health and safety issue. Matalco has a fleet of over 200 aluminum trailers to both deliver billet and return the scrap. The trailers are stationed at our customers’ plants and, once full, are removed and replaced.
We’re also very focused with our customers in defining their expectations. Having two metallurgists on staff and experienced people in the casting, production, and extrusion side of the business, we’re able to bring this experience and knowledge to our customers. In addition, the close working relationship we have with our sister company, Triple M Metal LP, is a great strength of our Group.
Having three strategically located plants, Matalco provides our customers security of supply, with some of the industries’ best lead times. Our customers know that we’ll bend over backwards to help them. They’ll call us first, knowing that somehow we’ll be able to bail them out. It’s a good reputation to have, and something we are continually looking to improve.
Another thing, in regards to our trailer fleet, we made a conscious decision to purchase aluminum trailers. We could have gone with less expensive and easier to maintain steel trailers, but we wanted to support the extrusion industry. A lot of our customers make extrusions for the truck trailer industry, so, we went with aluminum for our over 200 trailers.
Has the company implemented any new technology developments recently to improve production efficiency, quality, and specification of the billet produced?
Matalco’s Lordstown facility is the most technically advanced remelt and billet casting plant in the world. Work is ongoing with our equipment suppliers to implement equipment that is unique in the world. With today’s advanced technologies, significant programming and ongoing tweaking of the PLCs is required. This technology, along with our management and production teams, is providing some great aspects in productivity. Each cast is 100,000 lbs. To put that into perspective, a single cast of 7 inch diameter billets yields ninety 288 inch logs. Given the size of the casting table, it’s physically impossible for our production crew to reach over and plug off a leak, should one occur. So, we’re working on a robotic plug off system that provides additional security for our employees—health and safety is number one! Technologically advanced controls can be found throughout the plant. Once the logs are removed from the casting pit and placed onto the handling table, there is no physical human intervention until it comes out of the packaging area. It’s fully automated from the inspection station, homogenization furnaces, cooling chambers, through to the saws and packaging. To survive in today’s world, you have to have the latest technology.
How has the manufacture and supply of billet changed over the past decade? What do you predict for the future of the worldwide aluminum billet industry?
Aluminum extrusion applications continue to grow, especially in the automotive, building and construction, and transportation sectors. Automotive manufacturers must continue lightweighting their vehicles to adhere to 2025 CAFE targets, therefore the need for increased usage of aluminum castings, sheet body panels, and extrusions, some of which are used to support the panels. We can also expect to see continued growth in aerospace, equipment, solar, etc. Architects and engineers are continually developing interesting designs and applications for the use of extrusions. Aluminum is the most abundant, affordable and versatile metal in the world. It can be anodized, cast, recycled, extruded, machined, and welded. New alloy development to add strength and reduce weight is ongoing. In other words, there are things to come that we don’t even know about yet. The future for the aluminum industry is bright, and Matalco is bullish on its future!
How will the company’s aluminum billet business thrive in years to come?
The addition of the Lordstown plant has made us a very different company and we’ve reorganized our sales and marketing efforts accordingly. While we’re constantly looking at how to grow organically within our existing industries, at the same time we must investigate other potential industries as well for future growth — there are opportunities out there. That might be as other alloys, forms, processes, etc. We shall see, but these are some of the ideas that we are considering.
And is it possible that you will add more casting capacity in the future?
Matalco is fortunate that our owners are bullish on the aluminum industry. Given the projected continued future demand for aluminum, and the need to handle and process generated scrap, there is always a possibility that additional growth might be in our future. This would undoubtedly require additional capacity, but whether that be at our existing plants or the addition of new facilities, only time will tell.