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Specialty Pipe & Tube Rides Manufacturing Rebound
MINERAL RIDGE, Ohio -- For Specialty Pipe & Tube Inc., the flurry of oil and gas activity that’s swarming the Utica shale play in eastern Ohio and the Marcellus shale in western Pennsylvania is in many ways just icing on the cake.
In fact, the company has witnessed a steady increase in its business over the past 12 years, long before Big Energy began spending billions of dollars to tap into the vast repository of natural gas trapped in the two rock formations, says its president.
“We sell across so many different industries and markets, that it’s just a pleasant surprise,” remarks Steven J. Baroff, referring to the shale market. “We’ve seen steady growth since 2003 – the second half of 2008 and the first part of 2009 were off – but 2009 and 2010 were record years.”
And, 2014 is shaping up better than 2013, Baroff says, declining to provide specific numbers. “It’s more this year than last year.”
Specialty Pipe is a master distributor of pipe and tube products for suppliers that support the energy, mining, petrochemical, and original equipment manufacturer, or OEM, markets, Baroff reports.
“There are so many companies experiencing a renaissance of sorts, some of which is attributable to the shale plays, but not all,” Baroff says.
Specialty Pipe’s business, he relates, has risen with a general groundswell of industrial activity across the Mahoning Valley and the country.
The company processes and stocks select sizes of pipe and tube at its 16-acre site here.
Oil country tubular goods, or OCTG, pipe is generally a commodity product and is used by the major energy companies for shale exploration. Specialty Pipe, however, is not a commodity house, and keeps an inventory of hard-to-find sizes and grades that can fulfill a company’s needs in a pinch.
“There are always applications that call for something a little unusual,” Baroff says, “and that’s where we come in.”
Specialty Pipe carries seamless mechanical tubing and steel pipe sizes that range from 2.785 inches to 26 inches in outside diameter, and wall thickness that range from .375 inch to four inches. At any given time, 20,000 tons of steel pipe and tube are on hand, boasting the largest inventory in the country of heavy-wall steel pipe and tubing, Baroff says.
“These are convenience items for our customers,” he says. “We can ship in 24 hours.”
Baroff says his company fills an important niche in the pipe and tube industry. For example, say a petroleum pipe supplier has an order for 300 feet of a specific pipe but has just 100 in stock. “They call us, and we fill out the balance,” he explains.
The company also provides cut-to-length services through the use of high-speed saws at its Mineral Ridge site, which employs 23.
This processing consists of cutting tube and pipe to customer specifications then sending it out for any additional machining that might be necessary, Baroff reports. “End users want to do as little to the product as possible,” he says. “They want to take it off the pallet and put it into the component.”
Another location in Houston that employs seven was established in 1975 specifically for the deep-water energy exploration market, says Dianne Beck, the vice president who oversees the Houston office.
“The Houston operation was established to grab the energy business,” Beck tells The Business Journal from Specialty’s Houston office. Much of the product is tubing that finds its way on components used in the energy industry such as well heads and compressor parts, she says.
“If there’s any part of the business that is solid and really going, energy seems to be the best,” Beck reports.
The Houston division serves Arkansas, Texas, Louisiana, Oklahoma and Arkansas, and sells to companies that supply the deepwater market,.
Beck says that rigs are back into the Gulf of Mexico in full force, four years after the BP Deepwater Horizon disaster. “One of the things that we are seeing is that regulations are slowing projects down,” she observes.
As for the Mineral Ridge operations, Baroff says 80% of the company’s sales are outside the area.
“We’re uniquely positioned to handle this Midwestern industrial base as well as the energy industry, particularly oil and gas in the Gulf region,” he says.
Baroff’s father, Leonard, established Specialty Tube in 1964 in Warren. In 2001, the company moved to its present location on Union Street in Mineral Ridge. The company distributes pipe and tube for producers such as Vallourec, Timken Steel and Productos Tubulares.
“We get some pipe from Vallourec down the road,” Baroff says, referring to the Youngstown plant. However, that plant produces pipe limited to just 10 3/4-inch diameter.
“They also have limited wall thickness,” he says. “We try to buy domestically when we can,” he says, emphasizing that the latest high-speed saw the company purchased was manufactured in Michigan.
When domestic producers can’t supply the required dimensions and thickness, Specialty Pipe often turns to Vallourec’s operations in Western Europe, which carries the company’s entire size range.
“We located here 50 years ago because this is a hotbed of industrial activity,” Baroff says, noting that the business is cyclical and those in the industry can expect market swings.
But the recent uplift in manufacturing in this region, coupled with renewed interest in oil and gas exploration, has helped the industrial base prosper.
“This is a lucky break,” Baroff reflects, “being in the right place at the right time.”
This story was first published in the MidJune edition of The Business Journal.
Copyright 2014 The Business Journal, Youngstown, Ohio.
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