HUBBARD TOWNSHIP, Ohio — Every day, Ellwood Aluminum gets closer to pouring its first products for clients. The first furnaces are installed, as is the casting table and the machinery to treat and cool the end products. Over the coming weeks, workers will wrap up the process of commissioning the plant, making sure all the equipment is doing what it’s supposed to.
For 110 years, its parent company, Ellwood Group Inc., has focused primarily on steel, both forging it and the industrial products derived from it. But once Ellwood Aluminum comes online as the commissioning process ends in mid-August, it will represent the first time the company has entered the aluminum field as a producer of aluminum ingots.
“It’s the first opportunity I’ve had to see it. Every other job I’ve had, I had the benefit of forefathers who already plowed the ground of putting new stuff in. Now, I get to live that,” says Jeff Nicol, Ellwood Aluminum vice president of technical sales.
With more than 30 years of metallurgy experience before he arrived at Ellwood Aluminum in October, every plant where he’s worked had well-established machinery and processes. This time, it’s all brand-new. The plant in Hubbard, on property adjacent to Ellwood Engineered Castings, has been expanded, with 80,000 square feet added, bringing it to 110,000 square feet. In total, it’s a $72 million investment for Ellwood Group.
“The ownership has brought a stability strategy that looks for investments that last for generations. It’s not about getting a return in the next quarter,” Nicol says, “but about getting a growth trajectory.”
Among the investments are a new gas-powered furnace that burns upward of 1,500 degrees – with the door open, the heat can be felt from 20 feet away – and automated loading bins and skimmers that reduce the chance for employee injury.
“The furnace is reverberatory in which the heat comes from heating the roof. The roof heating the scrap minimizes the loss and is regenerative, which means we’re able to capture the energy out of the exhaust gas and use that to preheat the incoming gas,” says the operations manager of the plant, Scott Gregory.
The market for the aluminum coming out of the plant – the furnace can produce “well above” 150 million pounds per year, Gregory says – is growing, giving Ellwood ample segments to tap into. For the time being, the focus of the division is on the automotive and aerospace industries, both of which are using more aluminum than ever before.
“In transportation, you see continued growth in both trucks and cars. It’s been evolving over the past 20 years – and I think it’ll continue to evolve – to where more aluminum is used for each vehicle than ever in the past,” Nicol says. “There’s tremendous growth opportunity.”
Aerospace orders, meanwhile, have taken a hit because of the coronavirus pandemic ending all but essential air travel. But before that, he says, some airline companies were discussing materials for planes that would be needed a decade down the road. Once travel bounces back after the pandemic, he fully expects those orders to return.
“That market will be important to us with the alloys we produce,” Nicol says.
Producing those alloys is a different ballgame than making steel, he continues. Steel is denser and melts at higher temperatures. There are dozens of alloy compositions in aluminum products, each best suited for different uses. Part of Ellwood Group’s investment is also in the expertise needed to produce quality metal. Right now, Ellwood Aluminum employs 19. That number could reach 40 once full production capacity is reached.
“We’ve recognized that our technical expertise and skilled workforce is what sets us apart. And to stay ahead of the competition, we are committed to continuing to invest in our people, as well provide them the advanced tools they need to compete at the highest level,” says Anna Barensfeld, Ellwood Group vice president of strategic initiatives, in an email. “We’ve taken a strategic approach to ensure our team members have the training and development they need to continuously learn and perform at their best.”
Most of what comes out of Ellwood Group’s 30 sites – mostly in Pennsylvania, Ohio, Texas and Michigan, along with plants in Mexico and Canada – are engineered products, ones that are made specifically for customers. “With that comes a tremendous amount of development and a tremendous amount of technical support. That metallurgical staff and resources allow us to provide that service,” Nicol says. “Rather than being a commodity field where it’s all about price and delivery, we’re able to offer much beyond that. We can offer expertise to help customers who may want to change how their product behaves or performs.”
Once work on the Ellwood Aluminum plant is finished and the furnace is firing for customers, Ellwood Group’s next investment will be at Ellwood Specialty Steel in Wilmington Township, Pa. There, the company distributes steel and aluminum used for molds, dies and other tooling. A $4 million expansion at the site’s aluminum building will add 20,000 square feet for processing and storage, says Mark Kaszer, Ellwood Specialty Steel’s director of sales and market development.
“As far as throughput, we’ll be more efficient. We’ll be able to process faster than our current operations system can handle. The aluminum business grew pretty quickly,” he says. “Steel assets and processing them are different from aluminum, even down to the band speed you need to run steel at versus aluminum. Getting our flow and in the right cadence from an operational standpoint will help us reduce lead times and react to customers faster and be able to pick up more market share.”
Much of the site’s aluminum is going to those in the automotive industry, he says, from General Motors, Ford and Fiat Chrysler to newcomers such as Tesla and Lordstown Motors.
“Anytime there’s a change to a car – the front end, the exterior, the interior or any kind of refresh – there’s a new tool that needs to be built. Whether it’s with steel or aluminum, we’re positioning ourselves to be the frontrunner to become the top supplier,” Kaszer says.
The company expects to break ground on the expansion in September and be finished by March. Once it’s ready, it will add another layer of vertical integration to Ellwood Group. Rather than needing to source its aluminum from other companies, both domestic and international, a good amount of the aluminum coming through the site will be from Ellwood Aluminum, about an 18-mile drive away.
“We can have our own domestic, fully integrated products. If you look at the current global supply chain and what’s happening, there’s things like tariffs,” Kaszer says. “You look at Nafta and the new USMCA, that affects us, as a fully integrated company, in getting our products to divisions in Mexico and Canada. Our steel side is fully integrated; Ellwood Quality Steel makes it, Ellwood City Forge forges it and from them, we receive the bulk of our product. It’ll be the same idea for Ellwood Aluminum.”
That kind of integration is a key part of Ellwood Group’s strategy, Barensfeld says, from the provision of raw materials to the turnkey supply of things like crankshafts.
“Being able to offer the full spectrum of products and services helps us in our quest to solve our customers’ problems and be a partner to them in accomplishing their goals, rather than just providing a part off the shelf. We like to be able to offer very competent technical service to our customers,” she says.
All of the moves Ellwood Group is making now and has made in recent years have been the result of that strategy. On top of the current projects, Ellwood Group has invested more than $200 million into its plants over the past decade. In 2014, it spent $80 million to renovate the former Westinghouse plant in Sharon, Pa., to turn it into a home for Ellwood Crankshaft Group. Four years later, Ellwood Quality Steel in New Castle added an $80 million remelting plant.
In a recent cover story by Smart Business magazine, CEO Ben Huffman said it’s crucial for the company to take big steps in development rather than small ones.
“Our philosophy is that the world is changing too fast for us to look at incremental benefits, and we need to really be thinking exponentially,” he said. “And that is leapfrogging the status quo and not trying to make it incrementally better 3% to 5%. We need to improve it two times, three times, five times to not get left behind.”
Projects are also carefully planned out. The launch of Ellwood Aluminum has been on the table for several years. In designing the plant, the company built two casting pits – one capable of making ingots up to 30 feet long – even though there’s only one furnace to start with. Should demand be sufficient to add a second furnace, there doesn’t need to be a new pit dug, which would require other work at the plant to stop while the concrete is cut and removed.
“They did a great job in thinking ahead about what Phase Two might look like,” Ellwood Aluminum’s Nicol says. “We have the ability to expand. In the short-term, I want to sell out Phase One as fast as we can and allow Ellwood to expand into Phase Two. Beyond that, the sky’s the limit.”
Pictured: Jeff Nicol, vice president of technical sales at Ellwood Aluminum, stands in front of the plant’s new furnace. It will be able to produce more than 150 million pounds of aluminum products annually.