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A new line of duty
Niles Expanded Metals adds press
“Steel is the biggest cost we’ve got. But it’s getting to a state now where I’m concerned, together with the state of the U.S. economy, that it’s going to be tough for the next few months. But not just for this company. It’s going to be tough for everybody.”
Ian Thompson
Director of operations
The metals company is increasing its efficiency and quality with investments.
NILES — For the fourth time in the past five years, Niles Expanded Metals and Plastics is adding a new production line.
The new line “will allow us to run materials faster than some of the old presses,” said Ian Thompson, director of operations. “Some of the old presses are 30, 40 years old and prone to breaking down.”
The new press, which can handle a sheet of metal up to 10 feet long, will permit the company to produce more product for roughly the same cost, thereby increasing efficiency, Thompson added. He believes the quality of the product will improve, as well.
The project costs slightly more than $1 million, including transporting the press from Germany, installation and training. Nearly $300,000 of the $1 million price tag is being invested on an automatic plate loader, enabling the machine to be run by one person.
However, “the object of the exercise is not to cut the costs by reducing people,” Thompson said. “The object of the exercise is to grow your sales and reduce your unit costs by producing more.”
About 60 employees work at the North Pleasant Avenue plant.
The company has invested in three other new lines within the last five years, spending a total of $4.4 million. It also has spent $150,000 to rebuild and modernize a line.
Thompson expects 2008 sales to be about $20 million.
In the expanding process, the metal sheet or plate is simultaneously slit and stretched, expanding the slits into diamond-shaped holes of uniform size, shape and regularity.
The resulting product is stronger and lighter than the original sheet or plate. It is used to make fencing, window guards, patio furniture and other products, as well as being used in concrete reinforcement.
A finer expanded metal is used to create fuel cells, batteries, washing machine filters and other items. Rather than try to produce this type of expanded metal itself, Niles Expanded Metals has formed a partnership with Fratelli Mariani, a manufacturer of micromesh and wire cloth in Milan, Italy. The partnership allows Niles Expanded Metals to distribute Mariani expanded metal products in North America.
The current push to modernize and add new lines is a result of the vision of Bill Phillips, Jr., president of Niles Expanded Metals.
Phillips understands that developing the business for the future means investing in technology, Thompson said.
“[He] saw, and quite rightly so, if you’re going to do something, you’ve got to be bigger, faster, smarter than the competition,” Thompson said.
So, the company is investing in new lines and moving machinery together, creating what Thompson terms a modern factory environment.
“It’s about trying to ensure your competitiveness, because nowadays you’re in a global market,” Thompson noted.
Rising steel prices are the biggest threat to all expanded metal companies, Thompson said.
“Steel is the biggest cost we’ve got,” he said. “But it’s getting to a state now where I’m concerned, together with the state of the U.S. economy, that it’s going to be tough for the next few months. But not just for this company. It’s going to be tough for everybody.”
He hopes that investing in lines that make the company more efficient will give them a little more latitude as steel prices continue to rise.
“If you become more efficient, then you’ve got something to play with,” he noted. “Those who don’t, then they’ll see where [profit] margins erode.”
More expansion is planned, Thompson said. Under consideration is another new line, which would cost $300,000. The company also is tapping into the fencing market. It recently received its first order for a fencing system.