Going Global In Illinois

My publisher, Travis Egan, picks me up at 4:00 a.m. to drive to Chicago for a 10:30 a.m. appointment. In the past, we would fly there, but as airlines have become increasingly user unfriendly, the driving radius from our Cincinnati base has extended significantly. When you think about getting to the airport 1.5 to 2 hours early to get through security, which can take anywhere from 10 minutes to an hour or more, the car is the ticket

At the behest of Ugitech USA, we attend the grand opening of the company’s new manufacturing and distribution center in Batavia, Illinois, located directly across the street from the Fermi National Accelerator Laboratory. The operative word in the invitation for me was “manufacturing.” No way am I jumping in a car at 4:00 a.m. to see just a distribution center.

We arrive at a tent erected outside the new, purpose-built building just as the speeches from local, state and corporate officials begin. After the talks, refreshments and a ribbon cutting ceremony, we are invited inside to see what a $10 million investment looks like.

With hardhats and earphones, we begin a tour. Ugitech is a specialty steel provider that is part of Schmolz +
Bickenbach AG. Since 1990, they have served the U.S. market from six different stocking locations. Until now, all of the material has come from the company’s European-based operations. This new facility marks a change in strategy for the U.S. market—a change that I applaud.

Too often, U.S. manufacturing must play host to foreign companies that “dabble” in our lucrative market with little or no commitment or investment in the market. When business is good, they flock over the ponds, and when things turn down, many go home to await the next uptick.

With the opening of this new manufacturing facility, Ugitech is putting its money where it counts: investing in this market. Two automatic drawing lines are installed and running in the Batavia facility. The first line draws coil stock from 1-metric-ton spools as large as 15-mm bar diameter. The second line produces bar from 15-mm to 25-mm diameters.

Both lines are made from new equipment and represent $5 million of the total investment made so far. There are 20 operations performed on the raw stock as it is drawn through the line at 250 ft/min. These include straightening and drawing to size, as well as automatic length cutoff, pointing and chamfering. In-line inspection using eddy current sensing is part of the quality control built into this line. The finished bar is ready for delivery.

Ugitech tells us this new facility is phase one of their larger plans for manufacturing in North America. Ultimately, the plan calls for 50 employees working there. Aside from the commitment to the United States and North American market this and future investments represent, there is an additional upside to this operation that benefits both Ugitech and its customers.

Both of the drawing lines in Batavia can run Imperial or metric-size barstock. Most European manufacturers of size-specific products have to figure out a way to handle the inch system that won’t die in the United States. Many of the companies I’ve talked to must process orders from the United States as specials through their plants because the whole thing is designed to produce metric. This can add cost, complexity and time delay to delivery.

Like a handful of other foreign-based manufacturers, Ugitech “gets it.” Processing stainless steel in the United States puts the product closer to the market, allows them to be more responsive to demand and eliminates a potential bottleneck in their production back home. I see this as a win-win situation.