Above: The industrial metals arm of Cam-Lee is making a push to shape copper rod and bar for custom specs. That means less fabricating on the part of end users.
By tailoring industrial metals and opening a tube plant, Cam-Lee is a keystone in value-added copper
March 2014 - The copper distribution world is reliably tight-lipped about who is buying up its red metal. The industries buying copper, at least, are no secret. By looking at what investments and moves the larger copper service centers are making, one can feel the pulse of activity downstream. Cambridge-Lee Industries LLC, Reading, Pa., is one copper distributor that has recently beefed up operations to grow its customer relationship roots deeper.
It’s been about seven years since we last featured Cambridge-Lee. At the time, the company’s Mexico-based parent, Grupo IUSA, added a copper extrusion press to its manufacturing complex there in order to fill a void in the market for large cross section copper bar and shapes. But the big news has recently been made on this side of the border.
In October last year, Cambridge-Lee and IUSA agreed to relocate an advanced copper tube facility from Mexico to Pennsylvania—a $60 million expansion expected to create 200 jobs long term. Once the mill, called Eagle, is running at full-throttle, Cambridge-Lee expects it to help the company expand further into the HVAC market. Along with the facility and new leadership under new CEO Andrea Funk, Cambridge-Lee is now poised to put an emphasis on not only quality and service, but customization for value-added products.
Cambridge-Lee sells copper through four divisions: plumbing; HVAC and refrigeration; OEM tubing; and industrial metals. The industrial metals group (rolled and extruded products), essentially functioning as the nationwide service center arm, is where the company is honing value-added products.
As the trend of steel or aluminum service centers taking a more active role in ensuring end users are satisfied with materials they’re receiving, Cambridge-Lee’s industrial metals group is likewise taking charge with copper.
Dan Erck, executive vice president of the industrial metals group, says customers are seeking ways to reduce costs, so they’re relying more on suppliers to come up with innovative ways to deliver product for specific needs. In response, Cambridge-Lee is working with IUSA to customize alloys or offer nonstandard parts.
“We have seen a growing trend toward customization,” he says.
With the support of parent IUSA, the industrial metals group has plugged customers directly into the manufacturing process so they can make sure requirements are met. By developing layered relationships with customers, Cambridge-Lee is going beyond the traditional salesman-buyer rapport.
“We have cross-functional teams from IUSA, Cambridge-Lee and our customers all working together to develop product specifications,” Erck says. “This unique relationship has enabled us to achieve far more than we would have with a third party manufacturer.”
Whereas some companies buy copper products and then modify them through additional processing to meet individual customer specs, Cambridge-Lee is building such requirements into the manufacturing process. The result is that Cambridge-Lee is machining parts to various degrees and modifying alloys to meet customer specs. That tees up copper parts so it’s easier for fabricators to process, moves product further along the value chain, and eliminates waste. “In this business, you can no longer just simply sell a product,” Erck adds.
These initiatives are often born out of customer visits to IUSA’s manufacturing complex. Sometimes they are not aware that the company has several divisions and thus more resources beyond the industrial metals side.
“Customers realize we’re not just making copper rod and bar,” says Dave Goad, purchasing manager for the industrial metals division. “We have so much more potential and immediately they become interested in what more we can do.”
These layered relationships have also enabled scrap return programs, customer specific returnable packaging and copper pricing options to help mitigate price risk. Managing risk is ever important as copper prices fluctuate, especially as they slumped in mid-February. Along with offering customers flexibility in pricing supply agreements, allowing them to better manage inventory is the best tool in mitigating price risk, Goad says.
“That really emphasizes the importance of dealing with reliable suppliers, because in this market, turning inventory is critical,” he adds.
Earlier this year, IUSA installed new straightening equipment in its rod mill to provide tighter tolerances to customers running high-speed machining applications. The extruded products make their way from Mexico directly to multiple industries: Tellurium copper goes into torch tips and welding machines; its brass rod goes into plumbing and screw machines; and copper anode bars are available for smelting. The most common alloys being distributed by the industrial metals division are 101, 110, 145, 147, and 200 and 300 series brass.
Those alloys alone tell the story of what Cambridge-Lee is seeing in the rod and bar market.
“They are the centerpiece of what our business has become,” says Goad. But the alloys are not the only piece.
“We also remain very much involved in the copper and brass architectural markets, but our focus is not on the width of our product offering, but on the depth of our customer relationships.”
Eagle and beyond
Tubing has always been a focal point for Cambridge-Lee. Starting out as a small distributor for copper in 1955, Cambridge-Lee has evolved with the common benchmarks of corporate evolution. In 1993, Mexican conglomerate IUSA acquired Cambridge-Lee to better serve U.S. markets. Cambridge-Lee purchased Reading Tube three years later. The narrative’s new chapter is marked by the opening of the five-month-old Eagle plant.
IUSA and Cambridge-Lee partly decided to open the plant here after the United States International Trade Commission in 2010 imposed tariffs on imports of seamless refined copper tube from Mexico and China. The USITC determined copper tube imports were sold, or likely to be sold, at less than fair value in the U.S., according to a 2010 report. At the time, Cambridge-Lee was the largest U.S. importer of Mexican-made copper tube. Now, Cambridge-Lee’s tubing products are 100 percent made in the U.S.
The keystone process at Eagle, which is Cambridge-Lee’s fourth manufacturing facility in Pennsylvania, is its cast and roll technology. It’s an advanced and precise tubing manufacturing process that yields smooth and inner-grooved coils via a furnace that casts cathode directly into a large tube. This dramatically and accurately reduces wall thickness in a planetary rolling mill, draws product down to individual customer specifications, and uses an atmospheric annealing furnace to ensure consistent temperature distribution. This will serve the commercial cooling and refrigeration market with OEM tube.
Top copper product isn’t the only news at the company. Andrea Funk, promoted to CEO in 2013, was recently named a Women in Manufacturing STEP Award honoree by The Manufacturing Institute, a nod to successful women in the manufacturing world. Her instrumental leadership helped bring the Eagle plant project to fruition.
Although product diversity has been critical to Cambridge-Lee’s success, the company has kept its focus on copper and its alloys. For some service centers, copper is one business segment. At Cambridge-Lee, that’s all it does.
“We do not endeavor to be everything to everyone,” says Erck. “But when it comes to copper, our strategy is to meet our customer’s needs at every level and our relationship with IUSA has enabled that.” MM