Coil Processing
Thursday | 21 August, 2014 | 7:41 am

Making the grade in Mexico

By Corinna Petry

Above: The light-gauge slitter at Pesqueria, Nuevo León, accepts master coils up to 30 tons, widths up to 1,830 millimeters and sheet thickness up to 4.8 millimeters.

As the manufacturing sector in Mexico accelerates, one major American steel processor is ready to ride

August 2014 - El auge. That’s Spanish for “boom.” Gross domestic product growth in Mexico slowed last year to 1.1 percent following two years rising at 4 percent but the World Bank forecasts a return to 4 percent by 2016.

Mexico’s apparent steel use should improve 3.4 percent to 19.2 million metric tons in 2014 and 3.9 percent next year, the World Steel Association forecast in April.

IHS Automotive, a Lexington, Massachusetts-based consulting practice, forecasts Mexico’s vehicle output will exceed that of Brazil both near and long term. Through June, Mexico built nearly 1.6 million light vehicles, up 7.4 percent from the same six months of 2013. Enabling Mexico’s rise is its reliance on exports, which equaled 79.7 percent of domestic production during the first half.

Amid the bustling factories already littering the landscape, in the last few weeks BMW, a partnership between Daimler and Nissan-Renault and Volkswagen’s Audi division announced plans to spend a combined $3.7 billion on new assembly capacity.

Mexico’s economic outlook, supported by manufacturing growth, has led Steel Technologies to double down on its investment in the country with significant expansion of physical assets, technology and skilled workers.


The company built a 300,000-square-foot processing center in Pesqueria Nuevo León right after starting up another greenfield operation in Celaya, Guanajuato. It also has operations in Guadalupe, Nuevo León; Cuidad Juarez, Chihauhua; Matamoros, Tamaulipas; Puebla, Puebla; and Ramos Arizpe, Coahuila.

The main reason for building in Pesqueria “is the growth in Mexican manufacturing from the Monterrey area up to the northeast, the heart of the steel industry. With Ternium and Ahmsa in that region, this is the biggest cluster for steel apart from the Gulf ports, and we have steel coming from Southern and Southeastern U.S. mills,” says Carlos Von Rossum Ferrara, director general for Steel Technologies de Mexico SA de CV.

“It’s a great location—close to producers, relatively close to the end users,” he says.

Steel Technologies broke ground in July 2012, and started up four high-volume processing lines (see table for specifications, below) in stages: The multiblanking line was commissioned in May 2013; the light-gauge slitter started up in early September; an Eco Pickling System line commissioned in early October; and the heavy-gauge slitter started up during early November.

It’s a breathtaking pace from which “we are still trying to recuperate,” Von Rossum jokes. 

The new facility, which includes a 300,000-square-foot concrete-slabbed coil feed yard, is one of the largest of its kind in Mexico and North America.

To date, the Pesqueria operation has hired 49 production workers and 20 administrative people, and may hire more as production increases.

Quality comes first

The EPS line removes mill scale. All that runs through the pickler is hot-rolled black coil, says Von Rossum. The heavy-gauge slitter accepts hot-rolled black and pickled and oiled, and “our own EPS-processed product.

“If we go to the light-gauge slitter and multiblanking lines, we are running EPS, P&O, cold-rolled, galvanized, galvannealed and prepainted,” he continues. And, occasionally, tinplate on the light-gauge slitter.

Grades range from traditional commodity products to dual-phase material. “The lines are capable of running advanced high-strength steels. The equipment was specified from the beginning to run very high strengths,” Von Rossum stresses.

To date, he says, the pickler and both slitters are operating one shift per day while the blanking line is already on two shifts. “We are expecting double-digit growth in both 2014 and 2015 in terms of volume.”


The product coming off the new equipment readily matches customer expectations, according to Von Rossum. “In blanking and slitting, we can meet any tolerance and width requirement. With the EPS line, we have met and improved on what customer expectations are. Everybody is interested in it and how it compares to cold-rolled product. We are very happy with the product coming off that line.”

Equipment selection

Steel Technologies de Mexico chose Red Bud Industries, Red Bud, Illinois, to build all its lines in Pesqueria and Celaya (see specifications, page 27).

“There are a couple reasons,” says Von Rossum. “They have been our equipment supplier in Mexico since 2007 in Juarez. We started with a slitter, added a multiblanking line,” and everything went according to plan. “They had the technological advancements we were looking for when we built Juarez. And they were responsive.

“We launched the Celaya expansion at same time as Pesqueria. We knew the equipment and the manufacturer. When we started up Celaya, we trained people in Juarez, and when we started up Pesqueria we trained people in Celaya. We saved a lot of time on training.”

Another consideration was being able to access and switch out spare parts for ease of maintenance and repair on each line. Being able to “share the parts between lines is a tremendous advantage down the road, by helping to save money on inventorying parts,” Von Rossum explains. Crucially, Red Bud was “up to the task and competitive on the proposal.”

The EPS required vigorous due diligence, he says. “We did research for about a year. We made sure it was really free of scale to the microscopic level.

“The line produces a far superior product on surface compared with acid pickling,” continues Von Rossum, but in order to commit to the technology, “we had to be sure the product would meet and exceed customer expectation. Different in this case means better. It differentiates us with a better product.”

The 100-percent-green technology is of added value. “There are no discharges. The subproduct is iron dust or grit that is reusable to make steel. It’s truly a great technology.”

Steel Technologies’ co-owners, Mitsui & Co. and Nucor Corp., approved the processor’s analysis and are satisfied with the finished steel products.


Relationship was key

Red Bud Industries’ Dean Linders, vice president of sales and marketing, surmises his company first built a processing line for Steel Technologies de Mexico seven years ago in Juarez, and followed up two years later with a project in Tennessee for the Louisville, Kentucky-based parent company.

“Based on those two successes, we were able to prove ourselves and service them regardless of location, U.S. or Mexico,” and over the years, “we were given more opportunities to demonstrate our products, capability and service.”

Fast forward another few years to when Steel Technologies informed Red Bud it wanted to “build a very large greenfield plant near Monterrey. They sent us specifications for four different machines. “As a manufacturer you are happy with one order! We put on extra shifts and overtime to build what ultimately became a five-line order, including two slitters, the blanking line and pickler,” says Linders. 

As time elapsed between conception and drawings and placed orders, EPS technology matured enough so that by the time Steel Technologies was ready to place its order, Red Bud was able to complete the whole project end to end.

Both Linders and Von Rossum say Steel Technologies packed the EPS line with all the bells and whistles. “This is a four-cell system with scale-breaking technology, stitching (to join coil ends), in-line corrective leveling and edge trimming capabilities,” Linders says.

That’s not all, says Von Rossum. “We have the Cognex inspection system and all the thickness gauging equipment uses optical laser technology.”

Each customer develops its own methodology for expanding capabilities, says Linders. “Terms and conditions are great. It helps if you have a prior relationship. There is trust. With Steel Technologies as a whole and with the personnel in Mexico, they are so pleasant and nice to work with. We got along so well, making the process easy.”

What also smoothed the way is that “all the homework was done up front and there were no surprises.” As a result of that and being able to train operators on existing Red Bud equipment at other Mexican facilities, they were able to “hit the ground running.”

Red Bud has been installing equipment in Mexico for 20 years, most of it in the last five to six years. “The economy is fairly strong with a lot of foreign investment in a big market. Some indigenous companies are investing, too,” says Linders.  

“Our presence has expanded from three to five facilities within 18 months,” says Von Rossum, so the Mexican operations should “be a significant factor in revenue and profits to the company in Louisville. As the market grows, we could easily double the size we are today.”

In other words, Steel Technologies de Mexico expects to prosperar. MM

MM Cover0917 digital

vert-current-linewhiteJanuary 2018


Renewing and rebuilding harbors and marine structures smooths pathways for internal shipping, international trade.


MM digitaal archive banner 330

Instagram - @ModernMetalsMag

Modern Metals on Twitter


TrendPublishing 6 16 mm

Instagram Icon Large twitter facebook linkedin rss

MM Cover0917 preview FFJ Cover0917 preview mm 0917 brandingcovers2 3 2 Consumables 0917