A company’s self-investment proves to be worthwhile
July 2013 - Austerity, a solution deemed necessary when resources are scarce, stymies growth. The idea is first to square all accounts before rebuilding. This approach’s harsh frugality often comes at the loss of government funding for public programs as well as high unemployment rates, evident in the current woes of EU countries such as France and Greece. As the manufacturing industry rallies after the economic slump that still plagues much of the globe, some U.S. companies are reinvesting in themselves, promoting growth with the intention to go beyond breaking even.
One such company with its sights set on moving forward is American Tube Manufacturing Inc. Its mills are located in Birmingham, Ala., and it offers square tubing in 1 ⁄ 2 inch through 5 inch, rectangular tubing in 11 ⁄ 2 inch by 1 inch through 6 inch by 4 inch, with wall thicknesses ranging from 16 gauge (0.65 nom) through 1 ⁄ 4 inch (0.250 nom). ATM offers pipe sizes ranging from 1 ⁄ 2 inch through 6 inch with corresponding round tubing in wall thicknesses ranging from 0.065 inch through 0.330 inch.
Material is stocked according to industry standard lengths with custom lengths available. Mechanical tubing is produced to ASTM A513 standard with structural tubing dual certified to ASTM A500 grade B/C. The company sells primarily to service centers and a few large OEMs.
ATM recently acquired a new cutoff saw for its second mill from MTM and a new packaging line from Mair Research. Both suppliers are headquartered in Italy. The new equipment was installed to streamline and improve operational efficiency. “It was a question of efficiency,” says Horace Sellers, operations manager. “Among the benefits, the new equipment offers faster mill speeds, improved length tolerances and a cleaner end finish.” The company also added a Signode automated banding machine. In addition to these equipment upgrades, ATM also acquired a new EFD 600-kilowatt welder, an EFD 500-kilowatt welder, a Kent end welder and accumulator, and additional Rafter mill that will accommodate sizes up to 5 inch square and 6 inch pipe.
The improved speeds have reduced ATM’s production cycle from six to eight weeks to three to four weeks. “That helps in a number of ways. It has allowed us to add new sizes within our existing size range and accommodate more special orders from our customers,” Sellers says. “We have been able to achieve these benefits while reducing our overall inventory levels.”
Going forward, Rucker Durkee, ATM’s president, says, “We are currently looking at adding our next tube mill, which will complement our current product offerings through more specialty sizes, further reduce our cycle times and allow us to reduce our production costs.”
ATM makes a commodity product, selling square and rectangular tubing. Recently, however, the company has recognized a niche in the solar power marketplace where it can help satisfy growing demand. “We’re not necessarily making a unique product,” Sellers says. “But as the solar industry continues to grow, tube and pipe happens to be a big part of making those large solar farms.”
Solar power’s capabilities continue to expand as more businesses and communities invest in the environmentally friendly power source. Setting up infrastructure for solar power can be costly, but as its benefits become more prevalent, companies are making the investment.
WTEC, Fort Lee, N.J., is a provider of renewable energy, serving wind and solar markets. The company uses tube and pipe from ATM to build its solar farms. “We’re a provider of structural foundations,” says Steve Kim, vice president, balance of plant. “We were awarded 2 gigawatts (2,000 megawatts) of projects in 2012, which is about 50 percent of the total projects in the U.S. that year.”
Tube and pipe is an important first step to setting up the structure of solar farms. The tube and pipe is used for the frames to support the solar panels and hold them in place as well as move to adjust to sunlight. The materials needed may require some specific physical characteristics, such as higher yield or tensile, but the products are needed in mass quantity, an area where ATM can be a cost-effective solution.
“You couldn’t put panels or cable up without those pipes,” Kim says. “It’s important to have lead times and fast turnaround. We have projects, especially smaller projects, where we have one to two weeks lead time ... going with a different tube provider could take a couple months.”
Tube and pipe is preferred over beams because it takes up less surface area and can be driven into the ground. Beams sit more toward the surface. Kim notes using a tube or pipe instead of a beam also depends on the rack manufacturer. “The racks we purchase from American Tube are the vertical component of the solar farm that the solar panels sit on,” Kim explains. “Certain rack manufacturers design systems around tubes. The project we’re working with American Tube now was designed to use 5-inch round pipe, which is the largest size they offer.”
Currently, WTEC is working on a 50-megawatt project in Texas. The first part of the installation was the round pipe, followed by electrical and mechanical portions. The entire project is estimated to take nine months, but the actual steel pipe components are finished in the first three months. “Turnaround often depends on when we get the green light to start a project,” Kim says. “It can be very quickly. We’ve had turnaround where a client wants something turned around in 10 days for a 1-megawatt project, and we can do that since American Tube has the materials available.” A project for 1 megawatt can power 300 homes and requires anywhere from five to eight acres of land. The project WTEC powered in Texas provided enough power for 15,000 homes and required more than 400 acres of land.
Last year, solar power installations hit an all-time high in the United States, with a capacity to generate approximately 4 gigawatts. “This year analysts predict it to be above that and next year more than this year’s,” Kim says. “It really comes down to the next few years for solar power. If we can get to that grid parity where the cost of solar power is down to that of fossil fuels and there’s no need for government tax incentives to push these projects, that will move solar power forward. Once we get there, we’ll have a greater demand.
“Our relationship with Rick Long, vice president, and other employees at American Tube is a big reason we do business with them, in addition to an on-time, quality product,” Kim says. MM
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