Tin plating mill seen flourishing in flat market

American Metal Market, May 20, 2002

By Scott Robertson

PITTSBURGH, May 17 — Ohio Coatings Co., Yorkville, Ohio, has positioned itself at the forefront of a tin mill renaissance that by most measures has been a success.

Ohio Coatings, a joint venture of Wheeling-Pittsburgh Steel Corp., Wheeling, W.Va., Dongyang Tinplate Corp., Seoul, South Korea, and Los Angeles-based Nippon Steel Trading Co. Ltd. (formerly Nittetsu Shoji America Inc.), operates an electrolytic plating line with a rated capacity of about 250,000 tons per year, a capacity the company is on pace to exceed by some 30,000 tons this year.

That success has come despite financial problems bedeviling Wheeling-Pittsburgh Steel, which is operating under Chapter 11 bankruptcy protection, and the fact that Ohio Coatings is the smallest tinplate producer in the United States in what is universally regarded as a flat market.

The company, which was established in 1995 and was the first electrolytic tin plating mill to be built in North America in more than 30 years, replaced two older tinning lines formerly operated by Wheeling-Pittsburgh. Ohio Coatings got off to a slow start but has seen significant growth during the past three years, according to Kris McGee, its president and chief executive officer.

Ohio Coatings plates steel coils for the food container, general line, oil filter and specialty industry segments. It distributes products to 23 end-user customers through both Nippon Steel Trading and Wheeling-Pittsburgh. More than 70 percent of its black plate raw material is supplied by Wheeling-Pittsburgh, which has its operations just a few miles away, with the rest purchased on the open market.

“We are a stand-alone business,” McGee said. “Measurement is the big word with us. We measure everything–that’s what’s given us the results we have. Our entire business lives and dies by continuous improvement. This is a tough industry, but this (measurement) strategy has helped us become modestly profitable.” Measurements abound throughout the plant–ranging from production, shipments and customer satisfaction to worker safety, statistical process control and many others.

McGee, an engineer who formerly worked with mini-mill giant Nucor Corp., Charlotte, N.C., has instituted a mini-mill culture in a shop where workers are represented by the United Steelworkers union. Workers have taken responsibility not only for individual tasks but also for plant-wide activities and operations.

“You won’t hear anyone here say ‘That’s not my job’,” McGee said. “We work well with the union. We’ve gotten some early contract settlements and we have started the new contracts with the new benefits before the previous contract expired.”

The company’s 78 employees also have enjoyed the company’s gain-sharing program, a monthly incentive program for both hourly workers and management that uses five drivers measured against a matrix to determine a monthly payment.

Ohio Coatings has been profitable for the past 16 or 17 months, McGee said, as a result of the continuous improvement strategy, a strategy which directs the company’s overall focus to its bottom line.

Mike Roth, the company’s purchasing, safety and environmental manager, said the ability of management and employees to work as a team had fostered a safe workplace. There is a simple measurement for the success of that plan, according to Roth: zero OSHA-recordable accidents this year.

There are other key measurements of success as well. The number of customer field claims at Ohio Coatings has fallen steadily during the past three years, according to Lori Clark, manager of quality control. She said that claims had declined from 2 percent in 2000 to 1 percent in 2001 to 0.4 percent thus far this year. Customer field claims averaged only 0.43 percent from October 2001 through April 2002.

Customer satisfaction has risen in kind. On a rating scale of 1 to 5, where 1 is very poor and 5 considered excellent, customers this year have rated the company a 4.4, up from 3.3 two years ago.

One of the reasons for that lies in Ohio Coatings’ Tech Services. The company has two technical representatives who regularly visit customers to get ideas on how the company can improve its performance and to address low marks on customer feedback reports. At the same time, Ohio Coatings maintains a customer complaint board in its lunchroom–McGee described it as a “Wall of Shame”–on which complaints, even poor tinplate samples, are tacked for all to see.

“We want to make sure if something bad goes out the door once, it doesn’t go out that way again,” McGee said. “Everyone takes responsibility and makes sure it’s corrected.”

Ken Domyan, general manager of operations, said the company’s “yield bucket methodology,” which is part of its continuous-improvement program, also is showing results. Ohio Coatings’ total percentage of prime product produced has risen steadily to 96.52 percent this year from 92.06 percent in 1998, while the number of rejects, black plate rejects and delay rate had fallen. Rejects, for example, were running at 1.06 percent through April of this year vs. 4.32 percent in 1998.

Part of the reason for those improvements lies in Ohio Coatings’ statistical process control. Dwain Hultberg, manager of process control for the company, said the tin line design incorporates on-line process sensors coupled with frequent off-line product and process testing. Data is continually archived and checked for proper process control and highest product quality.

The company made the transition to a QS-9000-registered quality system in January 2001, Hultberg said, facilitated by the on-line sensors, routine product testing and the high experience level of the workforce.

And better quality has meant improved sales. “We’re the smallest tinplate producer in the U.S.,” said Gregg Johnston, general manager of sales for Wheeling-Pittsburgh. “But we’re pretty much sold out, and we have been for the past seven or eight months. As the smallest player, we have had to identify some niche markets and operate from freight-friendly locations. We don’t have to do a lot of things the bigger (tinplate producers) do. We have more operational flexibility.”

Being small has not hurt the company–bookings have grown 160 percent since 1998 while market share growth has increased 66 percent in that span. That growth has helped translate into shipping records. Ohio Coatings is on track to ship 15 percent more tons in 2002 than it did in its previous record year. The company set a monthly record with 28,774 tons shipped in January and set a daily record in March when it shipped 2,535 tons in one day.

“It (tinplate) is a flat market,” McGee said. “And we are still a slave to the two large markets, food cans and general line. But we think we’ve made great strides with customer satisfaction and quality, and those things have helped us grow in a flat market.”

Reproduced with permission from American Metal Market.
© 2002 American Metal Market LLC, a subsidiary of Metal Bulletin Plc. All rights reserved.

Ohio Coatings wins excellence award

Times Leader, May 20, 2002

THE OHIO Coatings Co., built in 1995 in Yorkville, Belmont County, received the Eastern Ohio Development Alliance’s (EODA), Excellence in Manufacturing Award at the EODA’s annual meeting on April 30 at the Carlise Village Inn, Walnut Creek, Oh.

Accepting the award presented by U.S. Congressman Bob Ney, R-St. Clairsville, were Kris McGee, OCC president and chief executive officer, and Jim Tennant, chief financial officer for the OCC.

Donald R. Myers, EODA president, nominated OCC for the award. He provided an overview of the company and said that OCC ws the first electrolytic tin-plating plant build in America in the last 30 years.

McGee and Tennant thanked the EODA for the prestigious award, and noted that with the continued support of agencies such as the Ohio Mid-Eastern Governments Association, the Belmont County Department of Development,and the EODA, they will continue to grow both as a quality supplier to the tin industry as well as be a solid employer in the Eastern Ohio region.

According to Myers, four states were in competition for the plant, but Belmont County and Ohio were successful in landing the state-of-the-art industrial plant. It was constructed in 1995, in Yorkville in Belmont County.

The OCC was developed as a joint venture between Wheeling-Pittsburgh Steel Corp., and Dongyang Tinplate. The development was recorded as the largest manufacturing plant built in Ohio in 1995, and resulted in an $80 million investment in the local area.

Myers said EOCC has a quality management team and workforce which enables them to be highly successful. “The company has survived through the most difficult economic times and has grown to be a first class manufacturing business,” he said. “The company takes great pride in its accomplishment and in meeting all of its covenants.

“The EODA is proud and fortunate to have such a quality company within its region,” Myers said. “The company is currently enjoying substantial growth from the initial year of producing 77,000 tons to the 276,000 tons produced in both 2002 and 2003.”

The OCC provides tin plated coils to 30 percent of the sanitary food can industry; 60 percent of the general line segment, i.e. paint cans, coffee cans and aerosols; five percent to the oil filter segment and five percent to specialty products such as cookware and battery jackets.

According to figures from EODA, the Ohio Coatings venture has created 78 full-time positions with an annual $6.5 million payroll including fringe benefits. It provides high-end industrial employment and utilizes local mechanical and electrical companies for support services.

The OCC has indirectly saved over 300 jobs at Wheeling-Pittsburgh Steel’s Yorkville and Steubenville plants due to their processing and supplying 75 percent of OCC’s substrate needs.

Ney delivered the keynote address at the annual meeting, and reported the economy is recovering from its recession, but “we have a long way to go.” He said the biggest challenge to U.S. business is China.

“I realize we can’t put a wall, around our country, and something needs to be done to make competition more fair.”

He said the Chinese people have no choice in deciding how to earn their living. “The government tells them what work to do, pays them low wages and subsidizes businesses. We can’t compete with wages of 15 cents an hour,” Ney said. “I hope conditions improve for the people, not only for humanitarian reasons, but to level the playing field. All we are asking for is reciprocity in trade.”

Ney said that service jobs are meaningful and important, “but we need to keep manufacturing jobs in the United states to keep our country strong.”

Also earning excellence awards at the meeting were Resource Systems of New Concord, and The Wilds of Muskingum County, for tourism.

The EODA represents 16 counties in Eastern Ohio and serves a population of over 800,000 people with a mission to promote economic growth and to improve the quality of life in the region.

Reproduced with permission from Times Leader

© 2004 Times Leader.  All rights reserved.