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McDonald Steel, Hynes Find Success Reviving Plants

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YOUNGSTOWN, Ohio — Two steel companies – McDonald Steel Corp. and Hynes Industries – have found success in rehabilitating older manufacturing complexes to sustain strong market demand for their products.

McDonald Steel Corp. first realized the potential of U.S. Steel Corp.’s former McDonald Works shortly after the steel giant shuttered operations there in 1980. And, just recently, Hynes Industries Inc. finished remodeling and moving its production operations to the former Wean United plant on Henricks Road in Austintown.

“Their business plan was solid,” Tim Egnot, president of McDonald Steel, says of the founding partners of his company. “They knew what they were doing.”

McDonald Steel was created following retrenchment of the steel industry in the Mahoning Valley that began in the late 1970s. As U.S. Steel wound down its production, David Houck put together a business plan, recruited a top management team and raised the capital needed to create what today is one of just a handful of mills in the world that manufacture nonsymmetrical shapes. The mill started operations in 1981.

“We’ve really grown the business,” Egnot says, noting how the company has adapted to the changing nature of manufacturing. “We’ve persevered through the ups and downs.”

Over the last several years, for example, McDonald Steel has embraced and executed the principles of Lean manufacturing, Egnot says. “In the past, everyone was buying large volumes. Now, no one wants to carry inventory.” Lean concepts are used to make manufacturing processes more efficient without sacrificing quality, and to ensure a quicker turnaround to meet the demands of just-in-time inventory.

McDonald Steel employs 105 and ships its products around the world. Critical to its success are a diversified customer base and ability to produce specialized products that few mills in the world can manufacture, Egnot says. “We’ve been in a growth pattern over the last couple of years and able to grow through the downturn of 2008 and 2009,” he adds.

McDonald Steel manufactures nonsymmetrical steel shapes used in products such as truck rims for over-the-road transportation, hinges for the automotive industry, components for the railroad market, concrete water pipe couplings, off-road wheel rims and decking for highway bridges.

“We’ve tried to diversify as much as we can,” Egnot says, and not be tied into or dependent upon a single market. The off-road market, for example, is weak while the automotive, rail and water construction sectors are performing well. “Our backlog looks good,” he reports. “We continue to see increases in business volume from a tonnage standpoint.”

Across the Mahoning Valley in Austintown, Hynes Industries is relocating its operations to the former Wean United building on Henricks Road, vacating its operations on Oakwood Avenue.

Last summer, Resilience Capital, based in Cleveland, assumed majority control of the company, says Mike Giambattista, senior vice president – roll-formed sales and marketing. “We’re looking forward to growing the company and expand our business possibly through location and acquisition. It’s going to be an exciting period.”

This year the company will also undergo changes in management, Giambattista says, as Hynes welcomes a new president and CEO, Greg Gyllstrom. Gyllstrom succeeds Jim Blair, who is retiring.

Hynes’ most ambitious project, however, is the consolidation of five manufacturing operations into one location, Giambattista says. “Everything will be moved over to Henricks Road, a facility that has 291,000 square feet of manufacturing space,” he says. The plant served as the headquarters and manufacturing plant for Wean United and most recently was occupied by Main Steel.

“Having everything under one roof is going to bring some efficiencies that we didn’t have before,” says Pat Montana, senior vice president – sales and marketing of Hynes’ strip steel, flat wire and FlexAngle divisions. Previously, Hynes had operated production plants along Four Mile Run Road, Industrial Road and leased space on McDonald Steel property.

“It will cut down freight costs,” Montana says. “We’re transferring a lot of material. So once it’s produced, we could just send it over to the next bay instead of the next plant.”

He estimates the expansion should result in Hynes increasing its production workforce by 10%. The company employs 160 in the Mahoning Valley.

All of the production work is operating from the new site, Giambattista says, and the company’s offices should be finished within several weeks.

The expansion includes a $2.5 million investment in a new roll-form line. Hynes specializes in manufacturing flat wire, roll-formed shapes, slotted angle, and strip steel products that serve the truck/trailer, appliance, outdoor furniture, hardware, storage, and solar energy markets.

“In all of our product groups, we anticipate growing about 15% this year,” Giambattista says. Hynes operates 50 production lines and stocks 38 million pounds of steel it buys from producing steel mills. “We slit our own steel and process it, streamlining the supply chain,” he says.

The new location was retrofitted with new lighting and the interior is freshly painted in bright colors. “I’d say the investment is approaching $4 million,” he says.

Hynes’ new plant adds another 50,000 square feet of manufacturing capacity. “To have a blank sheet of paper that you can design and place the equipment where you need it, Giambattista says, “and to maximize efficiencies, was a real luxury for our team.”

Pictured: McDonald Steel Corp.’s plant in McDonald.

Published by The Business Journal, Youngstown, Ohio.