Steeling to keep up with its rivals

A steel processor considers expanding as it prepares to build its business.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
CANFIELD -- A Canfield steel processor is almost ready with a new battle plan to fight off competitors who have been taking its market share. Pittsburgh Canfield Corp. intends to have developed by March a business plan that will include new products, new equipment, new employees and perhaps an expansion.
Jim Bruhn, who took over as president of the Main Street company a year ago, wants to increase annual sales from $35 million to between $50 million and $75 million.
The 50-employee company needed to review its operations because business was slipping, Bruhn said.
The plant was working at only about 50 percent of capacity last year because competitors had improved their equipment and were offering customers new options, he said.
On the rebound
Business already has started to rebound. This year, the plant will ship about 50,000 tons of steel, which is about 75 percent of capacity. In the mid-1990s, however, the plant was working at more than 80 percent of capacity.
Pittsburgh Canfield paints and slits coils of steel, but the heart of its operation is an electro-galvanizing line, which applies a zinc coating to steel using electrical charges. The coating prevents corrosion.
In recent years, however, competitors using what's known as the hot-dip method started to steal Pittsburgh Canfield customers.
Closing the gap
Traditionally, makers of such products as household entrance doors and appliances preferred steel that went through the electro-galvanizing process because it worked better with lighter gauge steel. Advances made in the hot-dip method allowed those companies to close this gap, said Ron Jandrokovic, Pittsburgh Canfield director of operations.
Bruhn said the first step in fighting back was breaking away as a subsidiary of Wheeling-Pittsburgh Steel Corp., which is in its second bankruptcy. Pittsburgh Canfield was unable to use its profits to reinvest in the company because of bankruptcy court proceedings, he said.
Last year, WHX Corp., the parent of both units, bought Pittsburgh Canfield and turned it into a separate company so it wouldn't be affected by Wheeling-Pitt's troubles.
Bruhn said Pittsburgh Canfield now has the money to improve operations and spent nearly $500,000 this year on equipment upgrades.
New equipment will help the company open new markets, Bruhn said.
For example, over the summer the company installed on the electro-galvanizing line a new oven that allows an acrylic coating to be applied to steel. This coating prevents permanent fingerprints on the zinc coating if it is touched during handling.
Jandrokovic said the new coating has one customer, a company that makes internal parts for microwaves. Even though the parts aren't seen by consumers, the company wants its parts to look good, he said.
Pittsburgh Canfield also is experimenting with a process that adds color to this acrylic coating.
The company now has its own sales force, which is dedicated to selling such products for the first time. Previously, its products were sold as part of Wheeling-Pitt's offerings.
Bruhn said the company has more than 50 customers, which is quadruple the number it had a year ago.
He figures the company will have to hire more workers a year from now because of its sales efforts.
Equipment upgraded
Also in the plan is new equipment. Officials are studying improvements to the paint line, which could lead to an expansion at the back of the plant.
Besides increasing sales and product offerings, Bruhn wants to change how plant workers view their jobs.
"I'm on a mission to help people see the value of their work," said Bruhn, who previously was executive vice president of Weirton Steel and owner of a galvanizing company in Indiana that has idled its operations.
He said he is spending time talking to Pittsburgh Canfield workers about their goals. Jandrokovic said he is getting training for workers who want to move into new areas of plant operations and is soliciting input from workers about how to improve operations.
Jandrokovic, who has worked at the plant since 1986, said operations have improved since Bruhn encouraged workers to take more responsibility for how their areas are run.
Efficiency improvement
An example is the plant's reject rate, or amount of products returned by customers. Last year, he was happy that the rate fell to 0.42 percent and was hoping to cut that to 0.4 percent this year. Quality has improved so much this year that the rate has fallen to 0.27 percent.
In August, Bruhn removed the plant's time clocks and the security cameras trained on the clocks. He said he realized the clocks were undermining the three values he was stressing at the plant -- integrity, respect and excellence.
"People spend 50,000 to 60,000 hours of their lives on the job, and I think we ought to value that," Bruhn said.
shilling@vindy.com