Atlas Copco owns Oerlikon Leybold Vacuum and Edwards now

 

After the acquisition of Edwards Group in January 2014 Atlas Copco AB (Stockholm, Sweden) owns as of today also the former Oerlikon Leybold Vacuum GmbH, renamed Leybold GmbH 

Founded in 1873, Atlas Copco is a global player with more than 43,000 employees in over 180 countries. Leybold becomes part of the Vacuum Solutions Division, belonging to the Compressor Technique Business Area, with approximately 6,500 employees represented in over 35 countries.

With this acquisition, Atlas Copco trusts the strengths of the vacuum specialists at Leybold, founded in 1850, who will keep their traditional and well-known brand in the market.
"The technological know-how and the innovative spirit of Leybold will complement our vacuum portfolio and strengthen our market presence, contributing to our customers’ success," says Geert Follens, President of the Atlas Copco Vacuum Solutions Division.

Leybold, headquartered in Cologne, Germany, and has a 166-year long history, develops and delivers vacuum pumps, systems, standardized and customized vacuum solutions and services for various industries. As a leading supplier of vacuum technology, Leybold offers sustainable solutions for industrial processes such as secondary metallurgy and a range of coating technologies. With a high application expertise in the fields of analytical instruments, display production as well as in research and development, Leybold ranks among the world's top providers and has always been a part of well-known, globally active companies.

With rough, medium, high and ultra-high vacuum pumps, vacuum systems, vacuum gauges, leak detectors, components and valves, as well as consulting and engineering of turnkey vacuum solutions, Leybold provides a very broad portfolio for general and specific customer applications. "We will continue to support our customers in the future with our vacuum expertise. Our enhanced product portfolio, sustainable after-sales services and proximity to our customer will distinguish us as a reliable business partner", says Steffen Saur, Chief Marketing Officer, responsible for the global sales and service activities of Leybold. “Additionally, by combining Atlas Copco’s and Leybold’s strengths in industrial dry pumps and scientific turbo pumps, it will provide a technology platform for superior next generation products.”

As a pioneer of vacuum technology, Leybold will continue to focus on performance and growth in the industrial, research and development, and analytical market sectors.

September 1st, 2016


 

Atlas Copco establishes Vacuum Technique
 

Atlas Copco, a leading provider of sustainable productivity solutions, will establish a fifth business area, Vacuum Technique.The new business area will be operational from January 1, 2017 and have approximately 6 800 employees, including external workforce. The new business area had restated revenues of SEK 10.5 billion (USD 1.2 billion) for the 12 months ended June 30,2016. In addition, the new business area will include the operations of certain businesses acquired after June 30, 2016, with combined annual revenues of approximately SEK 4 billion (MUSD 475).

Since the acquisition of Edwards Group in January 2014, Atlas Copco’s vacuum business has been growing. Several acquisitions in the vacuum area have been made orare under way, including Leybold and CSK, providing the opportunity to create a dedicated business area.

“Our ambition is to become the global leader in vacuum solutions,” said Ronnie Leten, President and CEO of the AtlasCopco Group. “

The global vacuum business is a growth area and by creating a separate business area with a dedicated organization the already strong customer,focus will increase further.” From January 1, 2017, Atlas Copco will havefive business areas; Compressor Technique, Vacuum Technique, Industrial Technique, Mining and Rock Excavation Technique, and Construction Technique. Following the establishment of a fifth business area, the Vacuum Solutions division within Compressor Technique will no longer be operational and its business will move to Vacuum Technique. 

August 18th, 2016


 

 

Birth of a New Commercial Heat Treatment Giant?

 

 

Calvert Street Capital Partners today announced its partnership with John Hubbard and Mike Sobieski to help support the creation of a leading thermal processing company focused on value-added services. Central to this strategy is identifying and bringing together leading businesses that share a focus on world-class safety, quality, service, and advanced technology. John Hubbard, P.E. has devoted his entire career to the thermal processing industry and is a recognized expert in the field. In 1996, John sold his company to Bodycote, plc (LSE: BOY), now the world’s leading provider of thermal processing services. He led Bodycote's expansion in the Americas until 2001 when he was selected to serve as Chief Executive Officer. Under his leadership, Bodycote expanded rapidly from a UK-focused heat treater to the preeminent global thermal processing company. He made over 200 acquisitions before retiring to return to the United States in 2009. John Hubbard remarked, “I am excited to apply my industry knowledge to this venture and play a meaningful role in building a best-in-class company that offers a range of advanced technologies. I believe that there is a tremendous opportunity to offer specialized services to address the evolving technological challenges in the marketplace.”

Mike Sobieski has served in various executive leadership roles, gaining broad global experience in manufacturing and quality operations. He has an impressive track record of driving transformative growth and operational improvement. Currently serving as Chief Executive Officer of Abrasive Form, a Calvert Street portfolio company, Mike developed expertise in the thermal processing sector while spending four years as an executive at Bodycote. Andy John, Partner at Calvert Street, added, “The expertise and experience John and Mike bring is invaluable to creating a thermal processing company that delivers the highest standards of safety, quality, service and technology. They are terrific leaders that each bring unique skills and experiences to our efforts. We are excited to partner with them.” With over 20 years of experience, Calvert Street has developed a dedicated focus on investing in privately held industrial services businesses. This partnership builds upon Calvert Street’s experience in other high-value add sectors, including testing and inspection (Premium Inspection & Testing and IOS) and precision machining (Abrasive Form).

ABOUT CALVERT STREET CAPITAL PARTNERS. Calvert Street Capital Partners is a Baltimore, Maryland-based private equity firm focused on the acquisition of industrial and tech-enabled service businesses in the lower middle-market. Since its inception in 1995, the Calvert Street has focused on partnering with skilled management teams of privately held businesses to drive profitable growth and organizational transformation. Calvert Street has invested over $500 million across more than 60 acquisitions through six committed funds. For more information, please go to www.cscp.com.

July 19th, 2016


 

 

 

AICHELIN Group acquires AFC-Holcroft, the US market leader in heat treatment solutions

 

Mödling / Austria (13.07.2016/11:00)

• Acquisition of Atmosphere Group, holding company of AFC-Holcroft finalized
• Consolidation in the heat treatment market strengthens AICHELIN Group’s global position
• Joint annual turnover amounts to EUR 195 million (2015), generated by 1,100 employees


On July 12, 2016, the Austrian AICHELIN Group acquired US-based Atmosphere Group, holding company of AFC-Holcroft. The two groups are a perfect fit: Both are leading market players with a long-standing history and state-of-the-art technologies and services in the industrial area of heat treatment solutions. AICHELIN Group - with its manufacturing companies AICHELIN, EMA Indutec, SAFED, BOSIO and Noxmat - is a leading provider of high-quality plants and systems. AFC-Holcroft is the US market leader in the production of industrial furnace equipment for ferrous and non-ferrous metals. Other main companies of Atmosphere Group are Atmosphere Heat Treating and Austemper Inc. Until now, Atmosphere Group was privately held. The parties agreed not to disclose details and the price of the transaction.

The acquisition complements the geographic presence of AICHELIN Group and strengthens the Group’s overall market position as one of the leading global heat treatment groups. The AICHELIN Group is now the largest provider of Atmosphere furnaces world-wide. With a strong presence in Europe, North America and Asia, the joint annual turnover generated by 1,100 employees amounts to over EUR 195 million (2015). The group operates a network in 32 countries.

“This is a major step in AICHELIN Group’s strategy of building a global, dynamic group of companies specializing in heat treatment solutions”, says AICHELIN Group’s CEO Peter Schobesberger. “With AFC-Holcroft as a member of our Group, we further evolve into a truly global company with strong local roots in the most important markets. We have an excellent, complementary geographical footprint and will further strengthen our leading positions.” Bill Disler, CEO of AFC-Holcroft, adds: “AFC-Holcroft celebrates its 100th anniversary this year. With AICHELIN Group as our new owner, we are sure to combine our long-standing traditions with an innovative future. AFC-Holcroft will benefit from being embedded into a family of strong global companies and brands.”

Extended product portfolio and services for customers
AICHELIN Group’s business model covers all stages of the lifecycle: From design, engineering, manufacturing and installation at customer sites to comprehensive maintenance and spare part services. By combining the networks of AICHELIN Group and AFC-Holcroft, customers will get the best of two worlds: An enlarged, high quality product portfolio as well as a process innovative, world-wide service network. “Together, we have an ideal position to service our customers in the best possible way. They can benefit from our extended project capabilities and the most reliable technology of three continents. Additionally, we will continue to focus on innovation and exploit all our joint possibilities”, says Schobesberger.

As the next step, a process will start to integrate AFC-Holcroft and its sister companies into AICHELIN Group’s network in the coming months. AFC-Holcroft’s headquarters will remain in Wixom, Michigan. The current top management stays in place and most customers will keep their key account managers.

“We want to play an active role in the consolidation of the heat treatment market. We aim at joint growth and a sustainable profitability, for the benefit of our customers, stakeholders and employees”, closes CEO Schobesberger.


 

 

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During this year edition of the CE European Heat Treatment Forum & Expo the Award “Member of the Heat Treatment Forum Hall of Excellence” was presented, after Michel J. Korwin and Janusz Kowalewski “The Godfather of Globalization” became members in the previous years, to Hans Veltrop. We congratulate!

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TAV VACUUM FURNACES: New Continuous Vacuum Furnace

 April 12th, 2016 

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IHI Corporation: New Investments in Surface and Heat Treatment Facilities in Eastern Europe & North America of the Japanese Industrial Giant

 

April 10th, 2016

IHI will invest 10 billion yen over five years starting in fiscal 2016 in the thermal and surface treatment business for industrial applications, with plans to open new treatment facilities in Mexico, the U.S. and elsewhere. The Japanese company hopes to expand the business serving autoparts makers and cutting-tool builders, aiming to increase related sales by about 40% from fiscal 2015 to 50 billion yen in fiscal 2020. IHI plans to increase staff in the operations by 20% to around 2,000 over the same period. IHI has manufactured and sold equipment used in such processes but now can offer the service itself, following its 2012 acquisition of a Swiss surface treatment company and the 2015 purchase of a German thermal treatment business. The company expects growing demand for the treatment services as more advanced materials are used in automotive parts and industrial machinery.

Surface treatment involves coating nonferrous and other metals with aluminum or titanium materials to improve friction resistance, among other purposes. In February, IHI set up a surface treatment facility in Yokohama dedicated to serving other businesses, giving the company 42 such sites across 18 countries. Japanese companies customarily handle metal processing in-house. IHI will encourage them to outsource the process overseas. Farming out the process - common in Europe and the U.S. - saves capital investment and eliminates the need to add workers. IHI aims to be serving about 50 Japanese companies in two years. IHI will set up thermal and surface treatment facilities in overseas hubs of Japanese manufacturers of cutting tools and autoparts by securing buildings of 1,500 sq. meters or so. IHI plans to increase the group's fleet of surface treatment equipment by 25% in five years to around 250 units, and heat treatment equipment by around 20% to 85 units. Mexico, the southern U.S. and Eastern Europe are potential sites to open more surface treatment facilities

 

 

WHIPOX® : Oxide Fiber Ceramics for Heat Treatment and High Temperature Applications

 

March 21st, 2016

 

Today we would like to present you one of the best materials every builder of racks & grids, furnace manufacturer or heat treater should use to prevent negative contact reactions between jigs and treated components like sticking, carbon contamination (vacuum heat treatment, brazing, sintering, atmosphere heat treatment) etc. Since two years a tremendous impact of that innovative material on the market. WHIPOX® is used already by several premium furnace manufacturers, C-C component producers and captive & commercial heat treaters. Perfect for nozzles of gas burners without, kiln rollers etc

This material was developed by the German Aerospace Center DLR e.V.  and is manufactured by WPX Faserkeramik GmbH, which  exclusively develops, produces and markets WHIPOX® based parts used in industrial heat treatment processes and in high temperature applications.

WHIPOX® is a high temperature resistant, non-brittle, all oxide ceramic matrix composite (OCMC) material, ideally  suited for high temperature applications in high vacuum, in oxidizing  or corrosive environments.

WHIPOX® properties: combines the advantages of metals and ceramics:

    High thermal shock resistance (> 1,000° K/sec, and > 1,000°K/cm)

    Temperature stability (beyond 1,200°C)

    Oxidation and corrosion resistance

    Chemically inert against metallic melts (e.g. aluminum, zinc)

    High tensile, bending, and torsional strength

    Light-weight

    Ductile, non-brittle fracture behaviour

    Electromagnetic transparency (for inductive heating)

    Electrical insulator

    Low thermal conductivity

     WHIPOX® products: standardized, semi-finished parts (sheets, grids, tubes) as well as customer specific solutions.

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WPX2

 

 

 

Christmas time has started at Aichelin Austria
(already in the middle of last summer) 

December 1st, 2015

During our last visit to Mödling, several months ago, we saw on the production floor a long line of furnaces in different manufacturing stages and trucks loading big wooden cases on their yard in front of the plant. A kind of Christmas in the middle of summertime. Today is the situation quite different..., there is even more traffic there. Not because the real Christmas time is coming. According to Aichelin’s press release from this morning, there are currently next 11 chamber furnaces and 19 equipment units of different tempering furnaces, mesh belts, generators and degreasers in their production. As several customers from the automotive and machinery sectors in Western & Eastern Europe and Asia are buying high quality, reliable, with low emission parameters and cost efficient furnaces only, there will be still a lot of work remaining for the New Year.

If you believe that this is a Christmas story only, see these pictures:

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This could be the most important acquisition in our branch these years!  

 

Today (November 13th, 2015) the Japanese IHI Corporation was announcing that it has entered into an agreement to acquire 100% of the shares in one of the leading German provider of advanced heat treatment services VTN, with five plants in Germany including one in Wilthen (Eastern Germany) perfectly covering Eastern Europe.
VTN, headquartered in Witten, is mainly working for the automotive, aviation, construction and agricultural industry, with a net sales last year of approx. € 30 million. Strong in vacuum, atmosphere and induction technology as well. 

IHI’s 100% subsidiary IHI Machinery and furnace Co., Ltd, biggest Japanese vacuum furnace manufacturer with more than 2200 installations worldwide is a leading company for vacuum carburizers using acetylene as carburizing gas, technology invented in 1996. IHI produces also multi cell vacuum carburizers and small batch vacuum furnaces, vacuum degreasers, diffusion bonding hot presses, high pressure sintering furnaces and calanders for tire industry.

We recall that IHI was acquiring in the past already Japan Hayes, Hauzer Techno Coating and Ionbond (previously within Bodycote organization). 

This huge Japanese industrial conglomerate, established 1853, with a sales level of € 10,8 billion last year operates in mostly all industries incl. automotive, aviation, space, nuclear, energy and defense.

The acquisition of VTN in Germany will be the milestone for further expansion of IHI vacuum heat treatment technology on the European market. IHI with VTN and its other subsidiaries for surface treatment IHI Ionbond AG & IHI Hauzer Techno Coating B.V. will provide a full range of services in metal and non-metal applications, furthering IHI’s ambition of becoming a global leader in heat treatment and surface treatment technology, markets which are expected to show significant future growth.

 

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IHI booth during last HeatTreatmentCongress in Cologne / Germany.
Gord Montgomery (The Monty), Paola Canal (Italy!), Karol A. Forycki (GHTN), Shinji Okada (IHI Europe)


Wes Dzieciol (Wiesław Dzięcioł) 

 

November 6th, 2015

One of the best known individuals in the European vacuum heat treating community Wes (Wiesław) Dzięcioł, passed away this past week in Warsaw. Services will take place this Friday, November 6th at the Warsaw Powązki cemetery. Wes started his career in the early 1970's by selling three Ipsen vacuum furnaces to a steel mil in Poland and starting them up in record time. In the 1970's he worked for Ipsen Industries as a Project Manager and then worked for Abar in the 1980's as the European Operations Manager. In the 1990's he started his own company TWC INVAC and established for Bodycote when they were expanding their Eastern European operations their first plant in Warsaw. Wes also helped build and design furnaces for companies such as ALD (BMW R&D),  ECM (Airbus), Swindell Dressler, DMP CryoSystems and Sistem Teknik.  He will be missed.


 

Karl-Wilhelm Burgdorf Prize 2015 goes to Hans Veltrop

 

October 30th, 2015

During yesterday’s Evening Gala Event at the biggest and most important European Heat Treatment Congress & Expo in Cologne (Germany), organized by the German Heat Treatment and Material Engineering Association AWT and this year again co-sponsored by the Global Heat Treatment Network, Mr. Hans Veltrop has been awarded with the famous and precious Karl-Wilhelm-Burgdorf prize. This annual prize was founded several years ago by the German premium hardening oil developer & supplier Burgdorf for the memory of Karl-Wilhelm Burgdorf who established the company 1949 and is awarded by the Board of the AWT.

Hans Veltrop, according to AWT, is transferring in his whole professional life in an extraordinary manner his scientific knowledge into daily heat treater’s business. He was starting his long successful career at Hauzer Techno Coating, later leading for a long time period Bodycote’s Central and Eastern European Group activities, being co-responsible for the fast expansion of that #1 commercial heat treater worldwide and now as important member of the Global Heat Treatment Network he is supporting several well-known market players and international corporations in the fields of equipment design and technology application.

He is engaged in heat treatment and coating business his whole life long, creating cutting edge developments already in the ’70, later inner companies he was working for, but also at equipment suppliers and customers as well (from automotive to aerospace). A countless number of customers worldwide are still taking advantage of his wide spread experience and several patents. Hans Veltrop as the pulse of our industry is also organizing heat treatment conferences, as an international acknowledged specialist giving presentations, or practical lessons to the equipment manufacturers and is well known (and feared for) as a critical questioner too, he is also taking care of knowledge transfer as well and encouraging science on new development directions. Congratulations!

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2nd Central Eastern European Heat Treatment Forum & Expo

  

The Monty, May 5th, 2015

April saw the 2nd Central Eastern European Heat Treatment Forum Conference  which was held in Wroclaw, Poland in conjunction with the 1st European Vacuum Carburizing Summit Conference both of which were organized by the Global Heat Treatment Network. This forum was first held in 2014 and it would appear that this is quickly becoming the premium heat treating forum in Poland and quite possibly Central Europe. Incidentally the leading European member of the GHTN network is Mr. Karol Forycki of Foka Engineering who was largely responsible for organizing this well planned event which had over 30 technical presentations and more than 40 exhibitors. The European Vacuum Carburizing Summit will be a regular meeting on developments and trends in that technology and will take place every two years at various locations in Europe, Asia and down the road North America (similar to the 2014 European Nitriding Summit).

During the gala dinner Mr. Janusz Kowalewski, Managing Director of ALD Dynatech  was inducted into the Heat Treatment Forum Hall of Excellence as its newest member-if you recall Michel Korwin (Nitrex and UPC) is the first member of that Hall of Excellence. During the event we had the chance to talk to a lot of old and new friends including representatives from IHI Group of Japan, one of the largest Japanese industrial conglomerates with a number of interests in the heat treating industry including furnace manufacturing and heat treating. For instance in 2002 Japan Hayes, inventor of vacuum carburizing under acetylene (patented technology for pressures < 3mbar) was integrated into the group. This has lead to IHI having produced over 2100 vacuum furnaces and vacuum degreasers worldwide with 200 vacuum caburizing units also in the mix. Currently IHI is entering the European market with its new strategy including it’s own European R&D center and manufacturing site as well.

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Gord Montgomery (The Monty), Karol A. Forycki (Global Heat Treatment Network), Michel J. Korwin (President & CEO of Nitrex & United Process Controls and 1st Member of the Heat Treatment Forum Hall of Excellence ), Janusz Kowalewski (CEO of Ald Dynatech and 2nd Member of the Heat Treatment Forum Hall of Excellence), Hans Veltrop, Gerry van der Kolk (CTO Ionbond/IHI Group), Shinji Okada dono (IHI Group Europe)

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Peter Sherwin (Global Digital Marketing Manager of Eurotherm / Schneider Electric)

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Janusz Kowalewski, Dale Montgomery, Gord Montgomery, Roman Pietrzyk (Industrial Forum)

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Shinji Okada (IHI Group Europe) and Ichiro Nakamoto (IHI Group Japan)

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Martin Bartelmie (GTD), Dr. Mathias Kunz (WPX), Shinji Okada, Kazuhiko Katsumata and Ichiro Nakamoto (IHI Group)

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Hans Veltrop (HV Consultancy) and Harald Berger (Aichelin Group)

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Karol A. Forycki (Leading Member of Global Heat Treatment Network) 


 

Overview of the Global Heat Treatment Industry


December, 2014

Heat treatment is a combination of operations involving the heating, holding and cooling of metal in a solid state for the purpose of obtaining certain desirable metallurgical properties or surface modification. Heat treatment consumes 17% of US Industrial Energy usage and consists of 2 to 15% of the total production cost. (Source: IHEA)

The global heat treatment volume is in the range of $65 to $85 billion[1].  This volume range doesn’t included induction and primary iron and steel heat treatment, and is a relatively small industry compared to other global industries.   The global heat treatment volume estimate is gathered from local heat treatment association’s statistics and correlated with countries’ car production and GDP.   The common belief is that North America is a $20 billion industry[2] with 16 million vehicles manufactured in the US in 2013 and $15 trillion GDP.   China manufactures 19.5 million vehicles, has more than half of US GDP[3] ($8.3 trillion), and 30% GDP is generated by manufacturing compared to a mere 12% in the US.   The heat treatment should have half of the heat treatment market the US has, or even more.  The European Union, with 14 million vehicles and the same combined GDP as the US - heat treatment volume[4], cannot be much lower compared to the US.   

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Source: Janusz Kowalewski (in Millions)

Many countries have considered heat treatment a strategic activity for the proper development of its economy and raising the standard of living.  For example, South Korea, Poland and China have significant subsidies and grants provided to furnace manufacturers that develop advanced technologies.   The estimated global heat treatment equipment sale is in the range of $4.375 and $5.5 billion.  

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The heat treatment equipment market is served by approx. 300 furnace manufacturers around the world.  300 companies is an arbitrary number and doesn’t match countries’ national data.  For example, the China Heat Treatment Association claims that there are 750 companies related to heat treatment[6] and India furnace manufacturers say 50, but not all the companies are heat treatment equipment manufacturers.    Most likely, from the list of 300 furnace manufacturers, 10% of the companies should not be on the list because of their low technical capability and low production rates. The 300 companies on the list are located in 34 countries and on every continent.  The majority of the furnace manufacturers are privately owned with several distinctive exceptions[7].  Amongst the 10 biggest furnace companies in the world, only two are privately owned companies (Ebner and AFC-Holcroft).  The other large companies are owned by investment groups (Ipsen,), industrial conglomerates (Tenova, Aichelin, ALD, Chugai Ro, DOWA) or are publicly traded companies (SECO/WARWICK, Fandong).  

Globalization of the operation is very risky and requires huge financial and managerial resources.   Most private companies do not have the sufficient financial resources, managerial resources and enough risk tolerance to support manufacturing globalization.  Globalization is not related to international sales, since most companies from the list conduct international sales, but globalization means owning and operating international facilities around the world.   

 

The global heat treatment drivers for heat treatment growth are the automobile, heavy construction, aviation, aerospace, metalworking, tool and die industries[8].   Korean car company estimated that the production of 1 million-car production requires 100 average size sealed quench furnaces[9].  In the average vehicle, 70% of weight is metal.   This high percentage of metal in the vehicle has a profound influence over demand for heat treatment in this industry.  

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There are still very noticeable technical differences between heat treatment levels between countries and regions.   The US, Japan and Europe still generate most of the new technologies in our business.   At the same time, we can notice that the global heat treatment business is becoming more alike in application of American standards such as NADCA, NADCAP, AMS2750E… AMS2769, MIL-XXX and CQI-9.  These specifications are recognizable and applied on every continent.  In India, the furnace specification will not differ significantly from a specification generate in the US.   Maybe the final product utilization is not in the same level but at least the standards for process or furnace performance evaluations are the same in every country. Secondly, there are massive efforts in Asia to improve heat treatment quality.  

 

Vacuum Furnace Market.

According to the study conducted by Technavio the equipment vacuum market in 2012 was $610 million business with a 6 % annual growth rate potential[10].   The largest utilization of vacuum equipment is in aviation, automotive, tool, commercial heat treating and medical industries.  

 

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Selected Asian Countries Market Characteristics:

Indian Market

Indian heat treatment industry has been progressing steadily in line with the Automobile boom for the last several years.   India is becoming a manufacturing hub of small cars for global car companies. There are about 50 furnace companies distributed all over India through regions catering to heat treatment requirements of forgings, castings, machined components and fasteners in the conventional  heat treatment processes category like pit type furnaces, rotary & shaker hearth furnaces, boogie, walking beam, pusher furnaces etc.

The major players being Ipsen, High-Temp Furnaces, ALD Dynatech, Aichelin and a dozen of spill over companies who have acquired technology from their association with these above companies[11].  

 

China Market

China market is facing tremendous competitions with large number of furnace builders and commercial heat treaters.  Price and survival is the order of the day but with time there will be consolidation and improvement of profit margin and more investment in innovations and global expansion.  According to China Heat Treatment Association the annual heat treatment of steel reaches 41.5 million tons in 2011. Among captive and commercial treating factories, the main goal is to reduce the current power usage of 500 kWh/t to 400 kWh/t by 2015.   Major drivers for equipment are the increasing demand for heat treatment in aerospace & aviation, military, automobile, tool and dies, machinery, new energy and rail industries.   According to the Heat Treatment Association in China, statistics on the heat treatment market are as follows: 

18,000 companies are doing business related to heat treatment

750 companies making components and equipment heat treatment market

The total volume of heat treatment around $12 Billion[12] .

One suppressing data is high percentage of heat treatment is conducted by commercial heat treating companies. According to VDMA study 26% heat treatment in 2011 was done by commercial sector. Very high percentages compare to the US 10% or Europe 20%. Heat treatment service is expected to get more share of the heat treatment market and reach 35% in 2015.

 

Japan Market

The Japanese heat treatment market is the third biggest in the world. The Japanese Industrial Furnace Manufacturers Association reports that it has 118 member and 54 Associate members - all in a country with slightly smaller area than California. The furnace business is dominated by Chugai Ro, Dowa, IHI and Koyo. Companies from Japan are of excellent quality, are government subsidized R & D, and are in close proximity to the emerging world market in the Pacific Rim.   In recent years, several manufacturing industries are moving their manufacturing facility from Japan to ASEAN countries. Below is a private estimate of the Japanese markets leaders.

 

Name of the Company

Atmospheric

Vacuum

IHI Machinery and Furnace

 

1

Chugai-ro

1

2

Dowa

2

 

Koyo

3

 

Nachi

4

 

Oriental

5

 

 Source: IHI group

 

According to JIFMA, the member’s sales have steadily declined since 2008.  In 2009 their member sales totaled 2,608 billion yen, or around $2,600,000,000 USD.  These figures include steel mill furnaces, so if even 10% of these sales are for heat treat systems, they are selling roughly $260 million dollars a year.

 

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Source JIMA publication March 2012.

 

The characteristic business module of Japanese commercial heat treatment companies is that they process small lots of parts from hundreds of companies.   The prevalent just in time (JIT) delivery requirement pushed commercial heat treatment to adopt a tight schedule, and more importantly, specialized furnace sizes according to fast turn cycles.  This explains why the majority of SQF and vacuum furnaces are in the 250 to 750 kg range.  

Japanese Heat Treatment service is dominated by several companies:

Onex                             5,850 mil Yen

Nihon Parkerizing     103,489 mil Yen

Neturen  Turnover    44,600 mil Yen

Dowa (HT only)           18,640 mil Yen

 

The South Korean Market.

The South Korean market in many ways is similar to the Japanese market, with 30% of GDP generated by the manufacturing sector.   The automobile industry, electronics and shipbuilding industries dominate demand for the heat treatment with small lots and just in time delivery.  The majority of furnaces offered by South Korean furnace manufacturers are small to medium sized, for example the SQF with up to 750 kg loading capacity.  The market is heavily influenced by Japanese furnace technologies with many furnaces resembling Oriental Engineering and Dowa designs.  SAC, Dongwoo and 2000Engineering are the largest furnace companies in Korea.   Dongwoo, besides its furnace manufacturing division, also has four commercial heat treating facilities.   One of the curiosities of the South Korean market is a pusher furnace offered by SAC with the Low Pressure Carburizing (LPC) that would be very challenging to build and operate.   With good success, Daehan Electric Heating Co. manufactures an aluminum brazing furnace to several global heat exchanging OEMs.   The South Korean furnaces have acceptable workmanship standards.   South Korean furnace companies are expending into Asia (Dongwoo has facilities in China and India) and most likely, within 5 years, South Koreans companies will have more global presence and recognition. 

 

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South Korea Heat Treat Treatment demand drivers.

 

Indonesia

Demand for everything from aircraft parts to cars to machine tools has continued to drive robust economic growth in Indonesia, defying the global uncertainty and domestic concern about resurgent economic nationalism and a widening trade deficit.

Gross domestic product has expanded by 6.1 per cent in the fourth quarter of last year, compared to a year earlier. GDP grew by 6.2 per cent last year, slightly below 2011’s 6.5 per cent as the slowdown in China hit demand for Indonesian commodities such as coal and oil.   

Double digit growth of vehicles sales[13] in Asia creates demand for heat treatment in this region.    The fastest growing markets are China, India, Thailand and Indonesia.  

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Global Key Opportunities

Fast growing Asian economics creates market opportunities for heat treatment services and equipment, particularly in India, Thailand, Indonesia and further in time, Vietnam and the Philippines.    The vehicles manufactured depend on population size, education (income) and the steel availability in the country or region.    We can predict with some degree of accuracy that within the next 10 years’ the high growth will move to Africa.   Egypt, Nigeria, Ethiopia and Ghana will have the most growth of heat treatment in a 10 years’ time frame.  

 

 

Global Process and Furnace Design Improvements

Furnace control systems have changed drastically in the last 10 years.  In order to increase the efficiency of the heat treatment process, furnaces are integrated into the manufacturing production flow.  Integration is only possible if the control system of the furnace has communication capability with the facility ERP (Enterprise Resource Planning) and CMMS (Computer Maintenance Management System).   The furnace control computerization allows furnace integration with the company ERP and CMMS systems.  Current development in the control system with PLC/HMI allows instantaneous communication with company production software.  The goal is to simplify furnace operation, recording and at the same time increase the reliability and efficiency of the furnace.  

The next task in furnace control development is to design control system capable of automatic reasoning during the heat treatment cycle and provide solutions to furnace performance problems.     PLC/HMI base controls are designed to analyze furnace performance by monitoring all critical components such as pumps, motors, valves, SCR, contactors, actuators, safety switches, heating elements, water flows, etc.   Data indicating parameters outside of acceptable norm triggers an alarm and notification of abnormal parameter.  

Furnace design improvements could be described in four ways: First, improvement in furnace design; such as, insulation improvement (lowering heat input per part or weight of the product) or improvement in heat transfer between heat source and the load by utilizing combination of convection, conduction, radiation heat transfer.  For example, in most advanced vacuum furnaces are using convection heating from ambient to 1560º F (850ºC)  to shorten heat transfer time.   By combining radiation and convection heating, the heating cycle is shortened from 10 to 35% depending on load configuration. The second advancement could be described in terms of operation improvement such as the flexibility of the furnace operation and maintenance simplicity.  The third way is to improve the heat treatment process by changing to more efficient processes and technologies.  The fourth advancement is to provide environmental improvement by lowering or eliminating the entire cost of the disposal of harmful byproducts of heat treatment. 

An example of how new technologies are replacing traditional heat treatment  equipment is vacuum carburizing.  The gas carburizing process that has dominated the market for decades is now being replaced by low-pressure vacuum carburizing (LPC) technology.  Within the next decade, new technologies will be introduced into the heat treatment field.  The driving force behind developing new equipment is the reduction of the environmental foot print, shortening production cycles and lowering the cost of operation through more efficient utilization of utilities.   The low temperature surface modification processes, made attractive by their low distortion, will gain higher market share.   Nitriding and sulfonitriding boronization are good candidates for a high growth potential within the next decade.  Processes with low COx emission will be replacing the higher and more polluted processes.  Vacuum technologies will gain market share in the heat treatment.    The major obstacle for more rapid growth of vacuum heat treatment is the high cost of equipment.   As vacuum technologies mature, we can predict with a high degree of accuracy that the cost of vacuum equipment manufacturing will decrease[14].   At the same time, the environmental concern will justify a higher cost of vacuum equipment compared to traditional furnaces with a protective atmosphere.  


[1] Estimate MTI and IHEA

[2] Monty interview with BD Harris

[3] China Daily Data 3/2013

[4] LCM Automotive

[5] Kowalewski List Global HT

[6] Industrial Heating 2/2012 CH

[7] Kowalewski List Global HT

[8] Kowalewski Global HT

[9] Private conversation Dongwoo

[10] Vacuum Heat Treatment Study 20112

[11] Pratap Ghorpade-Private Consultant

[12] IH Magazine 2/2012 Chinese addition

[13] LCM Automotive

[14] Kowalewski Global HT