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Sharon Tube Is Back with $45 Million Expansion
WHEATLAND, Pa. -- A massive investment at Sharon Tube Co. will double the plant's capacity and make more efficient the process to manufacture precision tube used mostly in agricultural equipment, off-road vehicles and Class 8 trucks, its principals say.
"It's to provide our customers with a bigger, broader basket of goods and to grow our business," said Barry Zekelman, executive chairman and CEO of JMC Steel Group, the parent of Sharon Tube. "The expansion has made our facility the best, not only in North America, but the world."
New equipment, coupled with a knowledgeable and skilled workforce, makes the plant among the most efficient of its kind in the business, Zekelman told employees and guests at a ribbon-cutting Tuesday.
"This was the right place to do it, the right time to do it," he said of the $45 million expansion.
About 100 gathered outside the 250,000-square-foot plant under a tent to celebrate the investment and a formal rechristening of the Sharon Tube name.
The Carlyle Group, then the parent of JMC Steel and nearby Wheatland Tube, purchased Sharon Tube in 2007. The Sharon Tube plants – one in Wheatland, the other in Sharon – were then renamed Wheatland Tube.
In 2011, Carlyle sold its majority stake in JMC to the Zekelman family, who then embarked on a strategy to reinvest in its holdings here. One of these moves was to reinstate the Sharon Tube brand name, Zekelman said.
"Sharon Tube has always been recognized as the highest-quality producer of DOM tubing," Zekelman told guests. Zekelman also introduced the new president of the division – Bill Perrine, who served as president of the company from 2000 to 2007.
"It feels great to be back," Perrine said after a tour of the plant. "Lots of relationships between many of the guys that I hired or worked with their fathers on the floor when they worked here, to the customers. They're all friends."
Moreover, Perrine noted that he and the Zekelman family share the same vision of continuing the success of Sharon Tube.
"This truly is a world-class facility," Perrine said. "Barry and the folks who built this place went all over the world and picked the finest equipment to be had."
The plant was constructed during the late 1990s on a brownfield once used as a slab yard for the former Sharon Steel Corp. "This is the first official reuse of a brownfield in the state of Pennsylvania," he noted.
"At that point in time, I think we guaranteed that we would employ 35 people here," Perrine recalled. Today, the operation employs about 160. "I think we kept that promise. We're getting stronger every day."
Perrine, who began his 32-year career with Sharon Tube as a laborer, reports that the expansion allows the plant to produce larger-diameter pipe, and new opportunities arose in the market that prompted the $45 million investment.
"One of our major competitors was purchased by U.S. Steel [Corp.] a few years ago, and they mothballed that plant," Perrine explains. That left a void in a market that JMC felt it could fill. The Zekelman family recognized that and had the foresight to add on to this facility."
Sharon Tube's plant on Church Street uses the drawn-over-mandrel, or DOM, method to process tube, Zekelman said. The new equipment includes a new, fully automated doping and lubrication line, which prepares the tube for drawing – a process that essentially stretches the tube.
"It's all automated," Zekelman reports. "It's all run in a pulpit by one guy." The process enables the plant to move more products more efficiently and quickly through this phase of the operation.
The draw bench, which stretches a piece of tube to a particular length and diameter, today can process three tubes at a time that are much heavier and with thicker walls, he reported. "It's very efficient,” he said. “The cycle times in it are very quick and precision is excellent."
Also, new automated inspection lines and cutting lines allow for high-tech finishing of the product, while a newly installed annealing furnace with increased capacity helps to cut production costs by using less energy.
"All of these combined make this a very efficient, flexible plant," he stated.
Such efficiency is paramount in a very demanding industry that is being swamped by foreign product that Zekelman says violates U.S. trade laws.
Customers prefer precision DOM tube because it doesn't require any additional machining once it leaves the plant, Sharon Tube's Perrine said. "We produce a tube that can be almost used, other than cut-to-length," and some final machining to pair the tube with a particular part, he noted.
Sharon Tube does not manufacture oil country tubular goods, so it isn't directly feeling the impact of shale exploration in eastern Ohio and western Pennsylvania, Perrine added. However, the company is witnessing indirect benefits.
"Our product gets used in the equipment side – the drill rigs, the heavy trucks, hydraulic cylinders – those sorts of things," he said.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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