Allegheny Technologies Inc.: Globally Focused

Oct. 8, 2008
The Pittsburgh-based metals company invests $1.2 billion into an expansion and consolidation project aimed at growing sales worldwide.

When Allegheny Technologies Inc. announced that profit had slid 18% in the second quarter from the year-earlier period, President and CEO L. Patrick Hassey stressed that global demand remained strong.

"Our diversified global markets and products provide balance," he said in a statement released July 23. "Direct international sales were 27% of year-to-date sales."

In a move that the company says will position itself for further global expansion, Allegheny Technologies has invested $1.2 billion in a new hot rolling and processing facility and consolidation of two melt shops. The new mill is being built with the flexibility to produce various alloys, including titanium, zirconium and grain-oriented electrical steel. Allegheny Technologies has tentatively chosen Brackenridge, Pa., as the site for the facility scheduled for completion in 2012.

The mill will be fully automated with the ability to produce thinner and wider hot-rolled coils at a lower cost and shorter lead times with less working-capital requirements, said Hassey when the project was announced in September.

One industry the mill is expected to serve is the aerospace and defense market, which uses ATI's titanium mill products and other specialty metals in its aircraft and jet engines. The long-delayed but much anticipated Boeing 787 Dreamliner is utilizing Allegheny Technologies' titanium, which is used in new-generation aircraft to reduce weight and burn hotter for improved fuel efficiency. The company forecast in its 2007 annual report that titanium shipments would reach 50 million pounds this year, up from 32 million pounds three years ago.

The company also will move its Natrona, Pa., grain-oriented electrical steel melt shop into its Brackenridge, Pa., melt shop by 2010. The consolidation is expected to improve overall productivity of Allegheny Technologies' flat-rolled grain-oriented electrical steel and other stainless and specialty alloys and lower slabs and ingots production costs.

The company expects a return on investment of more than 20% by 2014, including estimated annual cost reductions of $120 million.

Allegheny Technologies Inc.
At A Glance

Allegheny Technologies Inc.
Pittsburgh, Pa.
Primary Industry: Primary Metals
Number of Employees: 9,700
2007 In Review
Revenue: $5.5 billion
Profit Margin: 13.70%
Sales Turnover: 1.33
Inventory Turnover: 4.67
Revenue Growth: 10.45%
Return On Assets: 22.76%
Return On Equity: 50.05%

"We view this investment as a game changer for our flat-rolled products segment," Hassey said. "It provides a quantum leap in manufacturing technology. Our new advanced hot-rolling and processing facility is designed to be the most powerful mill in the world for production of specialty metals."

Meanwhile, Allegheny Technologies said on Oct. 6 that the U.S. Army purchased its ATI 500-MIL next-generation armor steel for an armored situational awareness kit on the Army's Stryker Light Armored Vehicles. The armor steel is designed to protect against such battlefield threats as explosions or fired ammunition.

The company says ATI 500-MIL is the first new, high-hard armor developed in the United States since the Vietnam War.

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About the Author

Jonathan Katz | Former Managing Editor

Former Managing Editor Jon Katz covered leadership and strategy, tackling subjects such as lean manufacturing leadership, strategy development and deployment, corporate culture, corporate social responsibility, and growth strategies. As well, he provided news and analysis of successful companies in the chemical and energy industries, including oil and gas, renewable and alternative.

Jon worked as an intern for IndustryWeek before serving as a reporter for The Morning Journal and then as an associate editor for Penton Media’s Supply Chain Technology News.

Jon received his bachelor’s degree in Journalism from Kent State University and is a die-hard Cleveland sports fan.

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