US: Top changes in the copper and copper alloy fabricating competitive scenario in 2017

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Tubi rameIn our previous article we have outlined the major changes and investments announced by the European headquartered copper and copper alloy fabricators in 2017. This second overview points to summarize the major events occurred in the US during the past year. prova

 

The major competitive changes in the US market have primarily involved the copper tubing segment, marked, in primis, by the final disappearance of Wolverine Tube, once one of the major copper tube producers worldwide with 8 plants in the US and 5 in other countries (Canada, Mexico, China and Portugal).

 

In April 2017, the German Wieland Group (see also our previous article) announced the acquisition of all the assets related to the fabrication and sales of finned and enhanced surface tubes in copper, copper alloys and steel alloys owned by Wolverine Tube. In 2013, Wieland had already acquired the full-ownership of Wolverine’s copper tubing plant in China and that of the smaller finned tubing facility based in Esposende, Portugal (former Wolverine Tubagem, Lda., now Wieland Thermal Solutions, Lda.).

 

During the same month, Small Tube Products (STP), a Pennsylvania-based precision copper tube re-drawer and one of the world’s leading producer of small diameter copper and alloy specialty tubing, acquired certain assets of the Wolverine Tubes’ plant in Ardmore (Tennessee). The plant in Ardmore, now National Copper Ardmore, is expected to work in conjunction with National Copper & Smelting (Huntsville, Alabama), part of STP since 2012.

 

Finally, the sole remaining existing facility of Wolverine based in Shawnee (Oklahoma) was taken over, through a sort of MBO, by a group of investors led by the former plant manager (Greg Gallman, now the new company’s CEO). The plant has changed its name to Shawnee Tubing Solutions LLC (STS).

 

Turning to Mueller Industries, by far the largest copper tubing supplier in the US and one of the top-two for brass rods, in 2017 the company confirmed its strong strategic focus on copper tubes and brass rods. During last year, Mueller restarted operations at the former Cerro Flow Products’ idle copper tube plant in Cedar City (Utah), acquired by the US corporation at the end of 2016. Moreover, in 2017, the company also continued the long-term investment plan at its major copper tubing facility in Fulton (Mississippi) and decided to relocate its HQs to a new location close to Collierville, a few miles Southeast from the current location in Southeast Memphis. As for the Group’s operations outside the US, the brand new ACR copper tubing facility in Bahrain is expected to be inaugurated in 2018. The facility in Bahrain is part of a JV, with Mueller Industries holding a 40% stake and Cayan Ventures and Bahrain Mumtalakat Holding Company having a 30% stake each. Moreover, in June 2017, Mueller Industries finalized the acquisition of HeatLink Group Inc. and its affiliate PexCor Manufacturing Company Inc., two Canada-based companies producing and selling complete lines of products for PEX plumbing and radiant systems. In the same month the company decided to exit from its Chinese JV by selling its 50.5% stake in the Mueller-Xingrong, supplying smooth and IGT ACR copper tubes, to one of the other two Chinese minority partners of the JV. The strategic decision to exit from this JV, after years of uncertain results, is connected to the Group’s intention to reallocate resources to the other initiatives mentioned above (Utah and Bahrain facilities, plastic acquisitions), expected to provide better returns in the future.

 

As for the other suppliers of copper tubes in the US (even if part of foreign Groups), in December 2017, Luvata’s plant of Franklin (Kentucky) was sold (together with the one in Monterrey – Mexico) to Waybill USA Inc., a brand-new company owned by Ron Beal (President of Luvata’s ACR Division) and David Lilley (Founder of the leading Metal Hedge Fund and Trader Red Kite Management Ltd.).

 

GD Copper US (Pine Hill, Alabama), US copper tubing facility of the Chinese Golden Dragon (world’s largest supplier of copper tubes) inaugurated in 2014, announced, during 2017, its plans to add between 30 and 40 new jobs to the 300 job posts already existing in the plant.

 

As already mentioned in our previous article, in addition to buy Wolverine’s assets of finned and enhanced surface tubes, in 2017, the Wieland Group also announced a US$ 20 million investment at its copper tubing facility in Pine Hall, North Carolina. The first round of investments, worth US$ 5 million, is scheduled to be operating by Q3 2018. During 2017, Wieland also finalized the acquisition of the majority stake in Kessler Sales & Distribution (KSD), US distributor of plumbing and related products with 10 locations across the US.

 

Finally, with reference to flat products, the major change materialized in the US during 2017 concerned the acquisition of Unimet/Alumet, multilocation SC and distributor of NF flat products (especially aluminium), by A.J. Oster, part of Global Brass and Copper Holdings, Inc. (GBC). Before the acquisition of Unimet/Alumet, A.J. Oster already managed 6 SCs, of which 4 in the US, 1 in Puerto Rico and 1 in Mexico. In addition to A.J. Oster, GBC also owns Olin Brass and Chase Brass, among the US top-suppliers of flat products and brass rods, respectively.

 

Cu2 Consulting continues to constantly monitor the competitive scenario of the copper fabricating industry all-over the world, with its monthly newsletter CFCM (Copper Fabricators Competitive Monitor). If you are interested in getting more info, please feel free to contact us at info@cu2consulting.com

 

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