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Big changes at Buzău in five years but still more to come
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Big changes at Buzău in five years but still more to come Five years and several million Euros after the acquisition of iron powder manufacturing capacity in Romania, Hoeganaes is looking for opportunities to expand European operations and sales. Richard Felton spoke to Tom Witheford at its Buzău manufacturing plant...
A
change in corporate structure three years ago meant a changed context for Hoeganaes Corporation’s operations in Europe and a new emphasis on their iron powder manufacturing plant in Buzău, Romania. The structural change saw European operations, headquartered in Germany, assume responsibility for development of the Corporation’s business in Eastern and Western Europe, parts of the Middle East and partial supply coverage for India, China, Taiwan and Korea. The availability of “local” manufacturing capacity in Europe was seen as an essential part of making expansion a reality. In terms of reporting structure Tom Witheford, Managing Director of Hoeganaes Corporation Europe reports directly to President Dave Kasputis based in New Jersey. New Jersey remains the top layer in the pyramidal structure that is the modern corporation. Ductil Iron Powder was originally founded in 1995, and since buying the plant from Italian owners in 2003, Hoeganaes has put in substantial investment to the tune of 15 million plus to improve the Buzău plant, bringing it up to modern industrial standards across the board in terms of environmental and safety performance,
18
MPR September 2008
and introducing the manufacture of the range of engineered powders expected by demanding customers. For a factory and workforce more used to producing welding powders and some iron powders, the past five years have been a time of profound
change. Included in those changes have been a tripling of capacity from less than 10 000 tonnes and a reduction in staff by a combination of early retirement and natural wastage from 120 to a core of 85. In terms of product mix, the “menu”
Team leaders. Hoeganaes Europe MD Tom Witheford and Buzău General Manager Dan Jilavu.
0026-0657/08 ©2008 Elsevier Ltd. All rights reserved.
New look in Romania. The bright exterior of the Buzău plant fronts an installation where change is embraced by the workforce.
now includes high-performance diffusion bonded alloys. It is something of a tribute to the shrewdness of Hoeganaes’ purchase decision-making process that they didn’t just acquire a building and machinery when they bought Ductil; they also gained a trained staff well used to the iron powder business. Since 2005 Tom Witheford has headed up Hoeganaes in Europe as MD, based in Meerbusch, Germany. A self-described “metals man through and through”, he joined Hoeganaes from Allegheny Technologies as VP Operations North America, a role that then included European operations. His goals are clear, but challenging, in the turmoil that faces all PM players in the markets today. “I want to see growth in the business in Europe and the other areas we supply.
metal-powder.net
Technical boost. Upgraded instrumentation is a key to improved product quality.
September 2008 MPR
19
Quality counts. Lab boss Mihaela Suditu checks a sample in the newly equipped laboratory complex that meters and records quality standards.
Romania’s accession to the European Union has cut a lot of red tape and complexity that we faced as an importer into the EU, and I look forward to the country adopting the Euro as its currency, currently slated for 2012.
“In addition to Buzău’s production, we ship in powder from the US. That gives us a great deal of flexibility in ironing out the waves and troughs of demand. Competition is extremely stiff in Europe, and I would estimate that we have grown
to have the second biggest in terms of market share,” he said. There is at least one other company that finds it economic and profitable to supply powder from North America, even if it has shut down its European-based manufacturing operation. The Buzău plant has room to accommodate future ramping up of manufacturing capacity says Tom Witheford. “We have the space in the plant to accommodate another, bigger, arc furnace and the increase in capacity that that would bring. However given the current situation in the automotive business, it would probably be difficult to make the business case for that investment – several million Euros – to go ahead right now. Nevertheless, there are exciting developments slated in the PM business generally that could change that situation. “Power tools and home and garden appliances are among growth areas being actively looked into. Similarly, as water and its availability becomes an issue world wide, we see potential for iron powder in water remediation and a possible role for it as an active catalyst in water purification.
Geared up. This is one of two annealing lines in the plant that will underpin future production potential.
20
MPR September 2008
metal-powder.net
All packed up and ready to go. Iron powder consignments awaiting shipping from the Buzău warehouse.
“But back in the here-and-now and acknowledging that the PM business will have major interests in automotive for the foreseeable future, as our research function in the US rolls out more low-alloy, highstrength, high-density materials to combat the roller coaster prices of raw materials that have put so much pressure into the market in recent years, I believe that new applications will be found in automotive too. They will keep powder metallurgy on very competitive terms with other metal forming technologies and develop new applications in the high-stress areas of auto engineering. “However, there is much that can be done with what we’ve got. In five years the workforce has achieved a lot. Under General Manager Dan Jilavu they have willingly adopted what you might call the ‘givens’ of Hoeganaes’ corporate culture, accepted without comment in the US and other parts of Europe, such as a much greater emphasis on quality and health, safety and environmental standards. They have also mastered a complete new product line. Buzău’s products today compare with those Hoeganaes makes in other parts of the world and maintain the standards that our customers have come to expect. “But added to that are increased working efficiencies that have come with items
22
MPR September 2008
such as modern instrumentation, which have seen, for example our kilowatt hour electricity consumption substantially reduced. That translates directly back to reduced smokestack emissions at the generating plant and therefore to our perceived share of damaging emissions. There is a new annealing line, and another that we shipped from Riverton, New Jersey, and reconditioned. We are always looking at better ways of working and we have a workforce that works with us and accepts change as something good. “Romania has a mixed economy where agriculture is still a major force, and there are oil reserves at Ploesti that give the country about 60 per cent of its needs. Our staff is drawn from the industrial sector of society that already has a skill pool in the steel business; where heavy industry, metals and metal working are very much accepted. And they are hungry; hungry for new ways, hungry for the prosperity of which they were deprived for so long under communism – even if it did have a distinctively Romanian face. “The transformation at Buzău, however, has by no means been entirely home grown. I have had the ‘hot seat’ for three years, but some deserved tribute should be paid to the efforts of past managers who had a big hand in creating the
conditions where we are now looking forward to further success. Notable in that regard are Jeff Wilson, who was the first General Manager, and Bob Causton, the Process Engineering Manager, who put in the hard work to bring the plant up to speed. “There has been substantial input from the States, but it’s by no means a one-way street. Members of staff from here have spent time – sometimes extended periods - at our facilities in Riverton, New Jersey, and Gallatin in Tennessee. Information exchange and training between here and the US and Germany is ongoing. “For example, we achieved the ISO 14001 quality standard in 2006 at Buzău. That was a success for us, but it was in part achieved by being able to benchmark our operation against Gallatin in the US. That co-operation identified areas for change and cost savings, and is ongoing as we limber up to pass the next milestone, the health and safety-related ISO 18001, next year. “I want to see Buzău grow and be able to supply the full Hoeganaes product line. But our operations must first and foremost be underpinned by quality and best practice. It’s the right way to provide good service and benefits for customers and staff alike.”
metal-powder.net
Big changes at Buzău in five years but still more to come Five years and several million Euros after the acquisition of iron powder manufacturing capacity in Romania, Hoeganaes is looking for opportunities to expand European operations and sales. Richard Felton spoke to Tom Witheford at its Buzău manufacturing plant...
A
change in corporate structure three years ago meant a changed context for Hoeganaes Corporation’s operations in Europe and a new emphasis on their iron powder manufacturing plant in Buzău, Romania. The structural change saw European operations, headquartered in Germany, assume responsibility for development of the Corporation’s business in Eastern and Western Europe, parts of the Middle East and partial supply coverage for India, China, Taiwan and Korea. The availability of “local” manufacturing capacity in Europe was seen as an essential part of making expansion a reality. In terms of reporting structure Tom Witheford, Managing Director of Hoeganaes Corporation Europe reports directly to President Dave Kasputis based in New Jersey. New Jersey remains the top layer in the pyramidal structure that is the modern corporation. Ductil Iron Powder was originally founded in 1995, and since buying the plant from Italian owners in 2003, Hoeganaes has put in substantial investment to the tune of 15 million plus to improve the Buzău plant, bringing it up to modern industrial standards across the board in terms of environmental and safety performance,
18
MPR September 2008
and introducing the manufacture of the range of engineered powders expected by demanding customers. For a factory and workforce more used to producing welding powders and some iron powders, the past five years have been a time of profound
change. Included in those changes have been a tripling of capacity from less than 10 000 tonnes and a reduction in staff by a combination of early retirement and natural wastage from 120 to a core of 85. In terms of product mix, the “menu”
Team leaders. Hoeganaes Europe MD Tom Witheford and Buzău General Manager Dan Jilavu.
0026-0657/08 ©2008 Elsevier Ltd. All rights reserved.
New look in Romania. The bright exterior of the Buzău plant fronts an installation where change is embraced by the workforce.
now includes high-performance diffusion bonded alloys. It is something of a tribute to the shrewdness of Hoeganaes’ purchase decision-making process that they didn’t just acquire a building and machinery when they bought Ductil; they also gained a trained staff well used to the iron powder business. Since 2005 Tom Witheford has headed up Hoeganaes in Europe as MD, based in Meerbusch, Germany. A self-described “metals man through and through”, he joined Hoeganaes from Allegheny Technologies as VP Operations North America, a role that then included European operations. His goals are clear, but challenging, in the turmoil that faces all PM players in the markets today. “I want to see growth in the business in Europe and the other areas we supply.
metal-powder.net
Technical boost. Upgraded instrumentation is a key to improved product quality.
September 2008 MPR
19
Quality counts. Lab boss Mihaela Suditu checks a sample in the newly equipped laboratory complex that meters and records quality standards.
Romania’s accession to the European Union has cut a lot of red tape and complexity that we faced as an importer into the EU, and I look forward to the country adopting the Euro as its currency, currently slated for 2012.
“In addition to Buzău’s production, we ship in powder from the US. That gives us a great deal of flexibility in ironing out the waves and troughs of demand. Competition is extremely stiff in Europe, and I would estimate that we have grown
to have the second biggest in terms of market share,” he said. There is at least one other company that finds it economic and profitable to supply powder from North America, even if it has shut down its European-based manufacturing operation. The Buzău plant has room to accommodate future ramping up of manufacturing capacity says Tom Witheford. “We have the space in the plant to accommodate another, bigger, arc furnace and the increase in capacity that that would bring. However given the current situation in the automotive business, it would probably be difficult to make the business case for that investment – several million Euros – to go ahead right now. Nevertheless, there are exciting developments slated in the PM business generally that could change that situation. “Power tools and home and garden appliances are among growth areas being actively looked into. Similarly, as water and its availability becomes an issue world wide, we see potential for iron powder in water remediation and a possible role for it as an active catalyst in water purification.
Geared up. This is one of two annealing lines in the plant that will underpin future production potential.
20
MPR September 2008
metal-powder.net
All packed up and ready to go. Iron powder consignments awaiting shipping from the Buzău warehouse.
“But back in the here-and-now and acknowledging that the PM business will have major interests in automotive for the foreseeable future, as our research function in the US rolls out more low-alloy, highstrength, high-density materials to combat the roller coaster prices of raw materials that have put so much pressure into the market in recent years, I believe that new applications will be found in automotive too. They will keep powder metallurgy on very competitive terms with other metal forming technologies and develop new applications in the high-stress areas of auto engineering. “However, there is much that can be done with what we’ve got. In five years the workforce has achieved a lot. Under General Manager Dan Jilavu they have willingly adopted what you might call the ‘givens’ of Hoeganaes’ corporate culture, accepted without comment in the US and other parts of Europe, such as a much greater emphasis on quality and health, safety and environmental standards. They have also mastered a complete new product line. Buzău’s products today compare with those Hoeganaes makes in other parts of the world and maintain the standards that our customers have come to expect. “But added to that are increased working efficiencies that have come with items
22
MPR September 2008
such as modern instrumentation, which have seen, for example our kilowatt hour electricity consumption substantially reduced. That translates directly back to reduced smokestack emissions at the generating plant and therefore to our perceived share of damaging emissions. There is a new annealing line, and another that we shipped from Riverton, New Jersey, and reconditioned. We are always looking at better ways of working and we have a workforce that works with us and accepts change as something good. “Romania has a mixed economy where agriculture is still a major force, and there are oil reserves at Ploesti that give the country about 60 per cent of its needs. Our staff is drawn from the industrial sector of society that already has a skill pool in the steel business; where heavy industry, metals and metal working are very much accepted. And they are hungry; hungry for new ways, hungry for the prosperity of which they were deprived for so long under communism – even if it did have a distinctively Romanian face. “The transformation at Buzău, however, has by no means been entirely home grown. I have had the ‘hot seat’ for three years, but some deserved tribute should be paid to the efforts of past managers who had a big hand in creating the
conditions where we are now looking forward to further success. Notable in that regard are Jeff Wilson, who was the first General Manager, and Bob Causton, the Process Engineering Manager, who put in the hard work to bring the plant up to speed. “There has been substantial input from the States, but it’s by no means a one-way street. Members of staff from here have spent time – sometimes extended periods - at our facilities in Riverton, New Jersey, and Gallatin in Tennessee. Information exchange and training between here and the US and Germany is ongoing. “For example, we achieved the ISO 14001 quality standard in 2006 at Buzău. That was a success for us, but it was in part achieved by being able to benchmark our operation against Gallatin in the US. That co-operation identified areas for change and cost savings, and is ongoing as we limber up to pass the next milestone, the health and safety-related ISO 18001, next year. “I want to see Buzău grow and be able to supply the full Hoeganaes product line. But our operations must first and foremost be underpinned by quality and best practice. It’s the right way to provide good service and benefits for customers and staff alike.”
metal-powder.net