SALEM, Ohio – Todd Olson calls it his company’s “first seven-figure investment” as he walks toward a towering computer numerical control – or CNC – horizontal milling and boring machine.
The new mill, capable of interchanging 60 tools, stands to substantially improve the competitive edge of BOC Water Hydraulics Inc. In the process, it should open new markets and opportunities for the Salem-based company.
“It opens up larger-scale CNC manufacturing,” says Olson, president and owner of the company. “That’s the direction where we see things going, where the growth opportunities are.”
Olson says these opportunities lay in producing stainless steel blocks used for high-pressure applications, particularly in the steel industry. “It opens the doors to new markets and allows us to aggressively bid and go after the high-pressure block business.”
BOC Water Hydraulics, founded in 1993 by Olson’s father, Don, designs and manufactures water hydraulics valves that are mostly used in the steel industry and the oil and gas business. While the company has always had the capabilities to produce large-scale units, the new CNC center – manufactured by Korea-based HNK – can manufacture these components much faster and far more efficiently.
“It’s able to do some of the higher-end repetitious machining,” Olson says. The company recently bid a project for Nucor Steel in West Virginia that requires six large valve blocks – precisely the type of job that this new investment is designed to tackle. “I can now compete in a space where I couldn’t before,” he says.
Ken Best, a machinist who has worked at BOC for eight years, has trained on the new equipment since it was first commissioned in April. On a late Wednesday afternoon, Best was busy at the control panel of the mill, performing a horizontal “face milling” operation for a customer. The HNK HB-130, he says, has a long-nose spindle and a wide table that accommodates larger parts and steel blocks, capable of high-precision machining.
“The main thing is getting used to the eye-to-guide controls,” says Best, a machinist since he graduated from high school. Once the work is finished, the veteran machinist commands an automated process where an arm moves into position, retrieves the machine tool, and places it on a vertical belt in its appropriate nest. When he selects another job, the vertical belt moves a new tool in line with the automatic picker, which grasps the component and fits it snugly into the spindle.
Therefore, Olson says, the new investment could dramatically improve throughput at BOC. “We’ve found that we can reduce our actual time on machine by 60% and 70%,” he says. “However, the cost per hour is much higher.” The objective is to increase volume on the new unit, which in the end equates to higher margins.
Olson says the company is slowly building business for the new line. “What we like to see is a part on the machine and material sitting in front of the machine ready to go,” he says. “This is just getting started.”
Solid Business in the Steel Sector
Olson says BOC products supply the steel, oil and gas industries with valve stands and other high-pressure hydraulic systems that are used, for example, in descaling operations in steel mills or the “decoking” process in the oil and gas industry.
The steel sector remains resilient despite some volatility and jitters related to the fate of U.S. Steel and its potential acquisition by Nippon Steel of Japan. Many of BOC’s products are used in hydraulic descaling operations, where water is shot at high-pressure to remove scale residue after steel is hot rolled, improving its quality.
“We’ve held our own given industry volatility,” Olson says. “There’s some apprehension on the ‘buy’ side right now. Auto inventory is up. So there are some forces out there that are making people pause.”
The key for the steel market is for prices to remain sufficiently high so that manufacturers can reinvest in new equipment, Olson says. Tariffs placed on foreign steel during the Trump administration and continued during the Biden presidency have overall elicited positive results for domestic mills.
“The biggest thing is whether they’ll hold their pricing,” he says. “If they start to fall, maintenance budgets go away. My sense is that pricing has maintained at a reasonable level.”
The company manufactures components for the oil and gas industry as well, most specifically for the “decoking” process, in which companies test and clean steel pipe and tube using high-pressure water. “Then, there is a variety of other applications where water hydraulics sneak into the equation.”
Global Sales and Expansion
Between 10% and 15% of BOC’s business annually is devoted to exports, Olson says, and the company has secured customers in more than 15 countries. These include Argentina, Brazil, Australia, Canada, Chile, China, India, Japan, Mexico, Taiwan, and the United Kingdom.
“The international business is OK,” he says. “It’s still tough because the dollar is so strong.”
Nevertheless, Olson posits that the global market presents a wide range of possibilities. “I’m convinced there’s growth potential,” he says. “The U.S. is a small steel segment compared to the global steel industry.”
BOC has no desire to do business in China, he says. Emerging and developing markets such as India, however, could unveil new commercial streams for BOC. “In some of the developing markets, there does seem to be opportunities there.”
The company expanded in 2012, adding a new corporate office and a 15,000-square-foot manufacturing space that houses the new CNC operations. BOC owns 17 CNC machines, along with its share of old-school manual lathes and other devices.
“They do beautiful work,” he says.
Olson says the company has enjoyed solid growth over the last several years while noting, “This year it’s leveled off a bit.”
BOC employs 48, Olson says, adding that his company is fortunate to have a highly experienced workforce and younger employees willing to grow with the company.
Julie Needs, executive director of the Sustainable Opportunity Development Center, an economic development organization based in Salem, says BOC and Olson have been supportive of the SOD Center since it began 14 years ago.
Moreover, the company often partners with the organization on events that expose young people to careers in manufacturing, she says.
BOC partnered with the center on a program at Salem High School intended to draw interest to the manufacturing trades. Also, Olson and BOC are active in supporting the SOD training center, which opened in 2019.
“Since then, we’ve trained nearly 4,000 students,” Needs says. “Todd and BOC have been fantastic supporters for the local economic development community.”
Such interaction with young people is invaluable to developing the skilled workforce of tomorrow, Olson says.
Josh Sawyers, a machinist, has been with BOC for three years. “I’ve always been mechanical, working on things and tinkering in my garage,” he says.
He became aware of opportunities at BOC Water Hydraulics when he attended an open house at Mahoning County Career and Technical Center. “I met a gentleman who worked here and he was really excited about it,” he says. “I saw that I could work with my hands and make my own parts from start to finish. It’s something I’ve always been able to relate to.”
It’s employees such as Sawyers that Olson says represent the future of industry. “This is the next generation here,” he says, gesturing to the young machinist. “We’ve got some good ones.”
Pictured at top: Todd Olson, president and owner of BOC Water Hydraulics, shows a valve stand bound for a steel mill.