Metal Coating, Engraving, & Heat Treating

The US metal coating, engraving, and heat treating industry includes about 6,000 companies with combined annual revenue of about $19 billion. Major companies include Precoat Metals (a division of Sequa) and North American Galvanizing & Coatings. The industry is fragmented: the largest 50 companies generate about 40 percent of revenue.

COMPETITIVE LANDSCAPE

Demand depends on the level of manufacturing production and construction activity. The profitability of individual companies is linked to manufacturing process efficiencies. Most companies are small and compete by focusing on a specialty customer niche within a local or regional area. The industry is labor-intensive: annual revenue per employee is about $130,000.

Competition comes from metal manufacturers and fabricators that have in-house capability. Other competitors are large steel mills and aluminum producers, such as Nucor and Alcoa, that have operations that incorporate these value-added services.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major services are engraving and coating (50 percent of revenues); electroplating, galvanizing, and anodizing (30 percent); and heat treating (20 percent). Major customer industries for metal fabricators are the auto, aerospace, building construction, highway construction, petrochemical processing, and utility markets.

The basic steps in the process include material cleaning; preparing, or priming, the surface; applying coating or other treatments (galvanizing, etching, electroplating, or anodizing); curing or drying; and inspection. In the case of heat treating, the material is heated to a high temperature under carefully controlled conditions then cooled rapidly to set the desired properties. Facilities vary in ...