METALS
SEGMENT – BRISTOL METALS
LARGEST
DOMESTIC PRODUCER OF STAINLESS STEEL PIPE
PROVIDER
OF TOTAL PIPING SOLUTIONS FOR GLOBAL INFRASTRUCTURE
SPECIALTY
CHEMICALS SEGMENT
TRANSITIONED
FROM TEXTILE DYES INTO A HIGH QUALITY PROVIDER OF SPECIALTY CHEMICALS TO
DOMESTIC AND OVERSEAS CUSTOMERS
BRISTOL
METALS
UNIQUE
CHARACTERISTICS OF BRISTOL METALS:
Largest domestic manufacturer of welded
stainless steel pipe
Producer
of all size ranges from ½ inch to 120 inches in diameter, up to 16 inches
utilizing continuous mills, in wall thicknesses of up to 1 ½ inch and in lengths
up to 60 feet
Producer
of all types of austenitic stainless steel and high-nickel alloys with
capabilities that include real time x-ray and hydro-testing
Plant
expansions completed in 2006 and 2007, allow the manufacture of pipe up to 42
inches in diameter utilizing more readily available raw materials at lower
costs, provide improved product handling and additional space for planned
equipment additions.
Piping
systems operation that processes a significant amount of our pipe production
into piping systems that conform to engineered drawings furnished by
customers
Low-cost producer
including purchase of stainless steel
Strategically
located domestically within primary markets utilizing stainless steel
pipe
Management
team that has demonstrated the ability to identify and penetrate new markets,
such as power generation and waste water treatment, for its products
transitioning from a commodity business into a specialty pipe
operation
COMMODITY
PIPE OPERATION
CUSTOMER
BASE
Bristol
Metals sells its commodity pipe primarily through distribution including all of
the major PVF distributor houses:
McJunkin
Redman, Southwest Stainless (HD Supply), Ferguson Enterprises, Warren Alloys,
Robert James Sales, Wilson Supply, Global Stainless
COMMODITY
PRICING
Commodity
prices are significantly influenced by surcharges paid to the steel mills based
primarily on nickel (304 & 316) and molybdenum (316), and to a lesser extent
on chromium. These surcharges, which make up as much as ½ of the selling prices
are routinely passed on to the customer (See attached graph on
surcharges)
Surcharges
are quoted 2 months out and are calculated based on the average of the current
month’s surcharges paid by the steel mills to their suppliers. They are included
as part of the raw material cost based on the date the material is received, and
charged to the customer based on the date the pipe is shipped. Under FIFO
inventory costing, increases in surcharges generally have a positive impact on
profitability while decreases have a negative impact
COMPETITION
There are
3 primary domestic competitors – Outokumpu (Wildwood, FL), Marcegaglia (Munhall,
PA) and Felker Bros (Marshfield, WI) capable of producing most size ranges, and
several smaller domestic producers with limited capabilities.
Foreign
imports, primarily Chinese, are significant especially in smaller diameters up
to 8 inches (See attached graph)
A
successful trade case filed in the 1st quarter
of 2008 against Chinese imports appeared to curtail the import growth in 2008.
On August 28, 2008, the Dept. of Commerce announced the preliminary
determination of countervailing and anti-dumping duties ranging from 22% to 128%
on imported stainless steel welded pipe smaller than 16 inch from China which
should continue to positively impact the domestic pipe market over the next
several years
SUPPLIERS
Stainless
steel coils and sheet are purchased primarily from domestic mills such as
Allegheny Ludlum (Allegheny Technologies, sym: ATI), North American Stainless
(Acerinox Group, sym: ACX.MC), and AK Steel (sym: AK), and foreign suppliers in
Europe and Asia such as Arcelor Mittal (sym: MT)
NON-COMMODITY
PIPE OPERATIONS
BUSINESS
DESCRIPTION
Includes
sales of large diameter (18 inch and larger) 304L and 316L pipe, sales of other
alloy pipe, and fabrication of piping systems
Piping
Systems has transitioned from primarily the pulp and paper and chemical
industries to a focus on infrastructure projects in industries such as liquid
natural gas (LNG), power generation, waste water treatment and water treatment
(See attached backlog graph)
Non-commodity
pipe is sold to order allowing us to lock in material costs minimizing the
surcharge impact
We are
only 1 of 2 domestic producers that makes pipe and further processes it into
piping systems
CUSTOMER
BASE
Piping
Systems has a strong on-going relationship with all of the major engineering,
procurement and construction companies, including: BE&K, Bechtel,
Chicago Bridge & Iron, Fluor, and AMEC
Our
strong customer relationships allow us to participate in current project
activities of our customers most of which currently have historically high
backlogs
Project
business gives us 2 opportunities to book business for each project – 1) to
fabricate the piping systems from our pipe, and 2), if unable to obtain the
award for the fabrication, to supply the loose pipe requirements of the
project
COMPETITION
Domestic
fabrication competitors include Shaw Group (Baton Rouge, LA), Turner IPS (Baton
Rouge, LA), and Team Industries, Inc. (Appleton, WI)
Foreign competitors include Butting
(Germany), Rivit Inoxtech (Italy), and EEW (Germany)
FUTURE
OPPORTUNITIES FOR NON-COMMODITY PIPE IN THE “INFRASTRUCTURE” MARKET
AREAS
LIQUID
NATURAL GAS -
7 new US
LNG Regas terminals proposed to FERC
12 new US
LNG Regas terminals approved by FERC but not yet under construction
3 new
Canadian Regas terminals approved but not yet under construction
1 new
Mexican Regas terminal approved but not yet under construction
4-5 new
Liquefaction projects will proceed in the next 1-3 years in the Middle East,
Asia and Australia
2
Projects proceeding in South America
COAL FIRE
PROJECTS – 4 new coal fire projects by 2011
SCRUBBER
INSTALLATIONS – more than 260 scrubber units to be installed in the United
States
WATER & WASTE WATER
TREATMENT - We are currently tracking 13 WWTP projects with an estimated
bid range of $5-$10MM each
DESALINATION
- - We have participated in the domestic desalination business in the past 3 years
and continue to track potential projects in North America. In
addition, we see a real potential from the large scale facilities planned for
the Middle East
ETHANOL -
While ethanol is slowing, there are still 538 projects in the planned or
approved status.
NUCLEAR –
Although 7 to 10 years away, we have the necessary qualifications, such as an
N-Stamp, and A&E and contractor contacts to participate in this market
successfully
THE
SYNALLOY CHEMICALS GROUP
BUSINESS
DESCRIPTION AND STRATEGIES
The
Synalloy Chemicals Group consists of 3 operations in 2 locations: Manufacturers’
Chemicals (MC) located in Cleveland, TN, and Blackman Uhler Chemicals (BU) and
Organic Pigments (OP) located in Spartanburg, SC.
The Group
produces specialty chemicals, pigments and dyes for the carpet, chemical, paper,
metals, mining, photographic, pharmaceutical, agriculture, fiber, paint,
textile, automotive, petroleum, cosmetics, mattress, furniture, janitorial, and
other industries
Focus on
industries and markets that have good prospects for sustainability in the U.S.
in light of global trends
Rely on
sales to end users through our own sales force, but also sell chemical
intermediates to other chemical companies and distributors
Utilize
close working relationships with a significant number of major chemical
companies that outsource their production for regional manufacture and
distribution to specialty chemical companies of our size to provide contract
production and toll manufacturing
Capitalize
on process & equipment to fully utilize capacity
Broaden
end use markets & sell across company lines by:
Focusing
on fast customer response opportunities
Focusing
on right first time, product consistency and on-time delivery, monitoring
through continuous tracking
Use
renewable feed-stocks wherever possible
Utilize
milling technology to produce chemical dispersions of fine particle
size
Expand
exports through growth of business with strategic partners aimed at paper and
agriculture industries
SALES
TARGETS
To End
Users through Sales Force
Reaction
Intermediates to other Chemical Companies
Contract
or Toll Manufacturing for Large Producers & Marketing Based
Companies
MARKETS
Paper
& Pulp
Water
Treatment The
markets in this group are also served by Bristol Metals
Oil
Refining
Chemical
Intermediates
Mining
Agriculture
Construction
Materials
Latex
& Rubber Products
Textile
& Carpet
Plastics
Automotive
Coatings
Cosmetics
Surgical
Devices
Leather
Metal
Working
Wire
Coating
Mattress
& Upholstery
Graphic
Arts & Ink
Paint
PROCESSES
AND CAPACITIES
|
Manufacturers
Chemicals
|
Blackman
Uhler
|
Organic
Pigments
|
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|
Esterification
|
Hydrogenation
|
Aqueous
Pigment Dispersion
|
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|
Amidation
|
Epoxidation
|
Aqueous
Chemical Dispersion
|
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|
Condensation
|
Methylation
|
Dispersions
in Oils
|
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|
Imidazolines
|
Carboxylation
|
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|
Phosphation
|
Nitration
|
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|
Sulfation
|
Polymerization
|
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|
Quaternization
|
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|
Hydrophobization
|
Milling
|
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|
Dye
Blending
|
Spray
Drying
|
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|
Homogenization
|
Kosher
Certification
|
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|
Blending
|
ISO
Certification
|
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|
ISO
Certification
|
(in addition to all
items done at MC)
|
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