Coated Coil
Tuesday | 20 April, 2010 | 7:24 am

Simplifying the supply chain

By Lisa Rummler

April 2010 - To stand out from the crowd, companies often offer something most others don’t. For restaurants, it could be broadening the menu and expanding hours of operation. For car mechanics, it could be topping off vehicle fluid levels after completing an oil change. For Steel Dynamics Inc., Fort Wayne, Ind., it’s coating its own steel products.

"It’s fairly unique that a minimill has such a focus on value-added products, and we’re heavily focused on providing additional value to our customers with coated product," says Don Switzer, marketing manager at Steel Dynamics. "That, in combination with the fact that we have two of our own paint lines that allow us to control the entire process, puts us in a unique position. [That’s] not only against other minimills but really integrated mills also because most painting is done by people who aren’t within the confines of the steel industry but by independent toll coaters."

Regarding metallic-coating capabilities, Steel Dynamics’ flat-roll division has two galvanizing lines at its steel-producing plant in Butler, Ind., and a dual-pot line in Jeffersonville, Ind. It also has three galvanize lines at its Pennsylvania-based facilities, known as "The Techs."

"And then having some of those products downstream and providing paint on those puts us in a favorable position from a supply-chain standpoint," says Switzer. "It certainly allows our customers to simplify their supply chain."

A look back
Steel Dynamics was founded in 1993 and began consistent production at its Butler facility in the beginning of 1996, melting and hot-rolling steel.

A year later, the company began construction and operation of its finishing facilities in Butler, including cold-reduction, galvanizing, annealing and temper-rolling processes.

This allowed Steel Dynamics to sell galvanized and cold-rolled product, says Karl Hermann, product manager for painted and coated products.

"After doing that for several years, we noticed that a lot of the product we were producing, specifically garage door product--which we had developed a substrate for that markets as a galvanized product--was getting shipped to toll coaters," he says. "So we evaluated that and asked if this was something we could do ourselves. We did some research and made the decision to go ahead and build the first paint line that was part of a steel mill in well over 20 years."

Thus, Steel Dynamics began painting steel products at its Butler facility in late 2003. Each year, it produces more than 250,000 tons of prepainted and coated products.

In 2007, production began at the company’s second paint line, which is in Jeffersonville. This coincided with the installation of a galvalume pot in the existing metallic-coating line at the same site. This provides for both galvanized and galvalume coatings at widths to 61 inches on the same line.

Between the Butler and Jeffersonville facilities, Steel Dynamics can paint hot-rolled pickled, cold-rolled, galvanized and galvalume material with polyester, silicon polyester and PVDF paints, in addition to epoxies and acrylics, including water-based coatings.

It’s in the details
The Butler paint line has a capacity of 300,000 tons and offers single- and double-coat processing. It runs at a maximum speed of 600 feet per minute, and it can handle gauges from 0.01 to 0.075, widths from 40 inches to 60 inches and OD from 36 inches to 80 inches.

Its top coil weight is 64,000 pounds, and it processes galvanized, cold-rolled and hot-rolled pickled and oiled material in post-anneal, commercial, forming and structural grades.

The end-use markets for the Butler line include garage door, lighting fixtures, HVAC and office furniture. The Jeffersonville paint line has a lower capacity, 240,000 tons, but also offers single- and double-coat processing at 600 feet per minute.

It can handle gauges from 0.01 to 0.045 and, like the Butler line, widths from 40 inches to 60 inches, OD from 36 inches to 80 inches and a maximum coil weight of 64,000 pounds. "The lines are actually more capable dimensionally than our upstream operations are able to produce, so we can run outside toll product if need be to widths as wide as 64 inches and narrower than 40 inches," says Hermann.

The Jeffersonville paint line processes painted galvanized and painted galvalume products in commercial, forming and structural grades. In addition to the end-use markets the Butler line serves, the Jeffersonville line also serves the construction industry.

Streamlining operations
Steel Dynamics has been able to broaden its range by coating and painting its own steel products. This, in turn, has benefited its customers in numerous ways, says Switzer.

"[Because] we have our paint lines right next to our steel-finishing facilities at both Butler and Jeffersonville, we have been able to help our customers eliminate freight to an outside processor or toll coater, and we’ve helped our customers eliminate the associated scrap that takes place at those toll coaters," he says.

Additionally, Hermann says that because Steel Dynamics has a high degree of control over its painted and coated products, the company is able to quickly and effectively answer any questions that arise.

"We like to have a relationship throughout the entire supply chain, and when there are issues (because it’s not a perfect world and things do happen), our model and our approach to the business is such that you’ve got one person to call, one place to go if you’ve got a problem," he says. "If it’s a steel problem, guess who’s responsible? We made the steel. If it’s a coating problem, we put the paint on it, so it’s our issue to resolve. Indeed, if it’s a paint or a pretreatment issue, we take the initiative to work with our paint companies, whom we have a tremendous technical and commercial relationship with, and we will spearhead getting answers for our customers, as opposed to when you have multiple suppliers in that supply chain: the steel producer, a coil coater, a paint provider and a pretreatment provider.

"So you’re potentially looking at a minimum of four to five other hands in the pie. Whereas, in our case, we take a look at it and assume there’s just one, and we’re it."

Outside perspective
One customer that has firsthand and extensive experience with this approach to business is Viking Material Inc., Minneapolis.

Bill Sternard, vice president of purchasing, says the service center has been purchasing Steel Dynamics’ product since it began making steel in the mid-1990s.

"When they decided to get into coil coating and painting, it was a natural fit for us," he says. "We had bought product from them before, which was then sent to outside coil processors for painting. When SDI expanded its product offerings to include prepaint, we jumped on it."

Viking Materials’ customers use Steel Dynamics’ prepainted product for various applications, including fire extinguisher cabinets, signage, agricultural products, garage doors and lighting fixtures.

Sternard says lower costs are among some of the major advantages Viking Materials has experienced with Steel Dynamics’ prepainted product.

"The old way of doing it [was that] we would buy the steel from the mills, then we would ship it over to an outside coil processor," he says. "In addition to lowering costs on prepainted coils, it is much easier to one-stop shop.

"When you buy SDI’s painted product, they make the steel, and they coat it. If there’s a problem with the material, the accountability is clear. SDI can easily identify the problem and fix it. There’s no finger-pointing at all." MM

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