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Carpenter Breaks Ground for New Facility in Reading
06/08/2007 - Carpenter Technology breaks ground for a $115-million facility in Reading, Pa., that will add new vacuum induction melting furnaces, and new vacuum arc and electro-slag remelting furnaces for a 40% expansion of its premium melt capacity.
Carpenter Technology Corp. broke ground for a $115-million facility in Reading, Pa., that will expand its premium melt capacity by 40%.
As part of its premium melt capacity expansion program, Carpenter will increase its vacuum induction melting (VIM) capacity by approximately 40%. VIM furnaces are typically used in the first melting step in the production of materials for demanding applications, such as high-temperature and highly corrosive environments, high-purity alloys for medical procedures, and specialty applications in automotive and truck.
Four new vacuum arc remelting (VAR) furnaces and two new electro-slag remelting (ESR) furnaces will also be added as part of the expansion program. The VAR and ESR furnaces are used to further refine higher-margin products for critical end applications, such as rotating aircraft engine parts, high-performance automotive and truck engine parts, and medical devices. The new furnaces will augment the company's existing 27 VAR and ESR furnaces, two of which were added in December 2006.
The expansion program will also include related annealing, homogenization, and other process machinery; associated testing equipment; raw materials management systems; and information technology infrastructure.
“This investment further strengthens Carpenter’s position in specialty materials manufacturing, and demonstrates its confidence in domestic production and commitment to the community,” said Anne Stevens, the company’s Chairman, President and CEO.
Expansion of its premium melting operations—which represents the first step in producing Carpenter’s critical-application specialty alloys—will allow the company to meet the demand expected over the next several years from those key end-use markets. Carpenter believes that more than $500 million of organic growth opportunities exist in its highest-margin business over the next several years in those markets, which require high-performance products made to exacting specifications for critical applications that cannot be easily substituted.
The premium melt capacity expansion is part of approximately $200 million in capital expenditures that the company will make over the next four years under its previously announced strategic plan. The expansion will also complement Carpenter's existing state-of-the-art melting, forging, and finishing operations, which are also being enhanced with laser-technology welding for strip finishing and centerless turning equipment for bar finishing.
“The growth over the next several years for Carpenter's high-margin products is the result of increased needs for the more specialized products manufactured by the company's aerospace, energy, medical, automotive and truck customers,” said Stevens. “However, these growing opportunities can only be captured by the timely strategic deployment of adequate capacity and technical resources that meet both the current and future demands of these key end-market customers.”
The company expects the premium melt expansion to be completed by mid-fiscal year 2009, and to have generated approximately $150 million of additional revenue from the sale of higher-value products by fiscal year 2010 (ending June 30). The company expects the project to provide significant returns on the capital invested.
Carpenter produces and distributes specialty alloys, including stainless steels, titanium alloys, superalloys, and various engineered products.
