Here is a company that has made significant capital investments to put new capabilities and capacity online for the 21st century. Its operations and work flow are designed to quickly respond to market needs and to allow its customers to take advantage of emerging opportunities. It’s also positioned to maximize the benefit of materials imported from overseas.
What kind of agile, new business are we talking about? Actually, it’s an Indiana steel mill. Beta Steel Corporation operates a hot-strip minimill serving the heartland of America’s steel industry from Portage, Ind., on Lake Michigan.
Beta Steel produces regular, low-carbon steel and high-strength, low-alloy steel to serve all steel market segments except the automotive industry. The company supplies steel service centers with intermediate product in the form of hot-roll coil, which is then cut to length and used in any number of applications such as secondary framing in building construction and transmission towers for cellular phones. The company also serves the pipe and tube market, and provides steel to converters which reduce the hot band thickness to more precise tolerances. Yet another market for Beta Steel is OEMs that engineer metal buildings, industrial racks and shelving, and other products.
Minimills are smaller than conventional, integrated steel mills, which use blast furnaces to melt raw materials such as coke and iron ore to cast semifinished slabs. Instead, a minimill incorporates an electric arc furnace melt facility, casting and hot-rolling steel to intermediate specifications before shipping it to service centers for further processing.
Beta Steel is unlike some minimills, which use thin-strip casting in a production flow that is coupled together from melting through rolling operations. Beta Steel uses a tried and true flat-roll process: Its melt shop produces a semifinished slab, which is reheated and then rolled down to the finished gauge. This configuration decouples the melt and rolling facilities so that the company can insert new product into the reheat furnace on short notice.
“In today’s market conditions, everyone will jump through hoops to serve customers better,” says H.B. Kincaid, Beta Steel’s senior director of business development and financial planning. “Provided we have the inventory to do it, we can often respond to customer deliveries with shorter lead times than a thin-strip producer.”
Beta Steel imports a percentage of its feedstock slabs and has an inventory of slab widths and chemistries in a pool system that is replenished from its melt shop. “Most mills have a pattern of repeat business, a routine customer base month in and month out,” says Kincaid. “If some of those customers require a short lead time or have an additional business opportunity and need the steel quickly, we typically have the ability and inventory on hand to respond very quickly through our rolling operation to meet customer demand requirements.” He adds that Beta Steel can also make up a shortfall from other suppliers, if need be.
The company recently completed an extensive capital investment plan aimed at expanding capacity; improving productivity, quality and customer service; and reducing cost. This program has brought significant improvements and upgrades to the melt shop and hot-strip mill equipment, as well as to business and information systems. The highlight of the capital plan was the installation of a coil box on the hot-strip mill, which greatly expanded the mill’s product range capability and vastly improved the hot-roll product quality.
In April of this year, Beta Steel’s quality-management system was certified to ISO 9002 standards. The company produces a quality product using a continuous-improvement system based on “fitness for use,” employee involvement and extraordinary service.
On a Diet
Customers are becoming more precise in their product designs and requirements for hot roll. As a result, Beta Steel has added another capability that distinguishes it from much of the competition — light-gauge steel production. Light gauge is used, for example, in electrical boxes, industrial switching gear and cabinets, and other applications. “The industry and market are continually trying to drive down the thickness and take weight out,” Kincaid says. “There has always been a movement in the customer base to go to lighter and lighter gauge products.”
Yet many large, integrated producers don’t produce light gauge because it makes the rolling process more difficult and expensive, impacting throughput. In the past, only cold-roll mills could produce light-gauge steel, but now it can be made by hot-strip mills. “The benefit there is as long as it has the mechanical and physical properties and surface quality requirements, it’s a lower-cost product for a customer of the steel industry,” Kincaid explains. “As technology improves, we have better tools to make better gauge tolerances, and flatter strips with better surface quality using a lower-cost source of material to meet customer requirements.”
Beta Steel started as a slab converter in 1993 and today has about 300 employees. The company’s melt shop can melt up to 700,000 tons, and the hot-strip mill can roll up to 1.2 million tons annually, taking the 8-inch slabs down to products in the range of 0.05 to 1/2 inch thick.
With its location in northwestern Indiana, on the southern tip of Lake Michigan, Beta Steel is well positioned in the market — literally. The north central region of the United States accounts for more than 60 percent of the demand for hot-roll steel, with even more concentrated markets in Indiana, Illinois, Michigan, and Ohio. “If you look at hot-roll demand, we are in the heart of the heart of the market,” says Kincaid. “We feel that our location is key to our business success.”
Beta Steel is situated on the Port of Indiana. An ocean-going vessel can come in through the St. Lawrence Seaway, across the Great Lakes and right to Beta Steel’s dedicated dock. The company also has year-round access up through the Mississippi River and inland waterway system to Lake Michigan and the Port of Indiana. “We not only can melt our own steel, but we have the ability to bring slabs in from anywhere in the world in a very cost-effective manner,” Kincaid says.
Little did we know how flexible steel could be.