Above: Champagne Metals/AMW’s 108-inch-wide slitter is the widest aluminum slitting line in North America.

November 2018 - Business relationships work when each side trusts and admires one another and the work they put out. It helps when both businesses are family run and want to remain that way.

Because it made a strategic acquisition of Aluminum Metalworks (AMW) in July, Champagne Metals now has three processing plants, which house wide cut-to-length lines in Glenpool, Oklahoma (100 inches), and Middlebury, Indiana (111 inches), and an 108-inch-wide slitting line in South Charleston, West Virginia. That’s in addition to narrower cut-to-length and leveling lines (60, 80, 72 and 84 inches wide) at the first two locations cited.

President and CEO Mike Champagne and Vice President of Sales and Marketing Steve Mosser have known the Aluminum Metalworks owners, Ken and Kevin Higginbotham (father and son) for 20 years.

Kaiser Aluminum commissioned AMW 30 years ago as a finisher of mill coils and, under the Higginbothams’ ownership, processed aluminum for only one customer, Constellium’s Ravenswood, West Virginia, mill.

Mike Champagne (center) with the Higginbothams at AMW, offer over 100 combined years of aluminum processing experience.

“This was one of the oldest and longest running processors that no one knew about,” says Champagne. When the mill indicated it may turn in a different direction for its finishing, AMW’s owners called Champagne to say they were ready to sell. They wanted to keep the business operating as a family company.

“Their entire company stayed. The founder and his son are running the branch. I was there last week. We are already looking for another building. Within one month, we outgrew the facility. Several other producers have started letting us process for them.”

Bringing the 108-inch-wide coil-to-coil line to a broader market “will open up more pounds. The mills can deliver more volume to the market if they don’t have to finish coils,” says Champagne, meaning outside processing is vital.

Close history

Mosser, who worked for Constellium for 19 years, was well acquainted with AMW, and has now been with Champagne Metals for four years. “Because we specialize in wide material, it made sense to focus on the ‘108’—and anything that allows us to separate Champagne Metals from competitors. One of our core focuses is tolling, with processing for both mills and commercial clients. When it comes to tolling, we were 100 percent cut to length and performed no coil-to-coil processing,” that is, slitting from one large coil to make smaller coils.

Most U.S. slitting capacity is limited to 60-inch and 72-inch-wide. “Now we have diversified our portfolio from cut to length by adding coil-to-coil processing while still focusing on differentiaton through wide product capability.”

The primary end use for the Constellium-supplied coil that AMW processed was wide roof coil for vans and trailers. Apart from that, says Mosser, “We have several large contracts in the boat industry that AMW was already handling. When I joined Champagne Metals, we landed a contract that required material to be processed at AMW.

“One of the needs for the pleasure boat marine industry is small coils,” says Mosser. Mills produce master coils of greater than 20,000 pounds “and customers want those broken down into 4,000- to 6,000-pound coils. We control this process in house on material as wide as 108 inches, which will allow us to pursue additional coil segments in the future.”

Supply crunch

Producers, Mosser continues, “cannot handle the small coils as the market gets tighter, due to demand outpacing supply, and so fewer mills want to sell anything that is not a full buildup coil.”

Some of the tightness is due to trade constraints. “Hundreds of millions of pounds were coming into the United States from China, and that has stopped,” due to U.S. tariffs and the antidumping case on foreign aluminum. The supply shortfall can also be attributed to increased automotive demand, “which is taking away some other domestic capacity from traditional segments.”

Roof coil is specially crated for a customer at Champagne Metals/American Metalworks in South Charleston, West Virginia.

AMW has the capacity to process well over 10 million pounds per month and the logistics are favorable for the mills.

“In addition to wide width, AMW can trim and break down narrow coils and handle extremely large mill production coils.” Mosser notes that the ‘108’ is “very heavy duty and it includes heavy material handling equipment. Today, there is a lack of that equipment as aluminum producers are opening mill capacity into traditional markets that were flooded by Chinese material. We are now handling significant pounds of narrow coil in order to increase capacity into those markets.”

Diverse growth

“The facility in Charlestown is a new geography for us and close to all the mills,” says Mike Champagne. “Our model for 10 years—we only do aluminum—has allowed us to grow in the double digits during each of the last three years. AMW allows us to continue growing.

“If a customer used a roof coil, the coil came off this machine. We think AMW processed 1.5 to 2 billion pounds over 30 years. It’s a tremendous asset. We want to grow with every domestic mill and we make it easier to sell their coils. Mills want to sell value added. We buy the widest coil. We think we’re in good shape,” says Champagne.

The company will continue to invest in aluminum capabilities but it has also upgraded its software, added trucking capacity, and started up a 90,000-square-foot distribution center for the recreational boat industry in Lebanon, Missouri.

“With automotive demand so strong, our competition is racing each other to get into automotive but they left the fundamentals behind,” Champagne says. “If someone eats bread or meat,” there’s a chance Champagne processed aluminum that got that food to the table. “A cattle trailer, for example, or when someone orders goods online and the package comes in with FedEx or UPS. Or if someone puts gas in their car, we are serving tank manufacturers for oil and gas industry.

“We’ve become very diverse. This is a golden time for us,” says Champagne. MM