April Terreri discovers how Sheffield Steel maintains a role as a mini-mill steel manufacturer serving a variety of American industries.
When manufacturers in the South-Central states need cost-effective, quality hot-rolled steel bar or rebar to manufacture their products, they turn to Sheffield Steel Corporation of Sand Springs, Okla. A leading regional mini-mill since it became an independent mill in 1981, Sheffield produces a full range of steelbar products for a variety of markets, including the automotive, agricultural, digital communications and heavy-construction industries. Sheffield also manufactures steel for railroad components such as track stabilizers. The company is the second-largest manufacturer of railroad track spike in the country.
Sheffield and its corporate family predecessors have been in the steel manufacturing industry for about 70 years, so the company has the advantage of drawing on that extensive experience to meet the needs of specific manufacturing applications. The company manufactures billets, hot-rolled steel bar products (hot-rolled bar), concrete reinforcing bar (rebar) and steel fence posts at its largest facility in Sand Springs, Okla. Sheffield is among the most cost-effective producers of billets in the United States, and the company credits this to its modern melt and cast operations, high labor productivity levels, low energy costs and competitive steel scrap costs. The company also produces hot-rolled bars in a second mill in Joliet, Ill., using billets from Sand Springs, and operates two rebar fabrication shops in Kansas City and Independence, Mo.
Geographic Advantage/Specialty Products
According to the American Iron and Steel Institute (AISI), the size of the hot-rolled bar market in the United States. in 1997 was approximately 8 million tons. The demand for consistent quality is extremely significant in this market, where quality is measured by specific chemical composition, surface quality, product integrity and size tolerances.
The steel industry, by its very nature, also tends to be regional. “Regional dominance is particularly important in products like rebar,” says Robert W. Ackerman, Sheffield’s president and CEO. “Service and freight factors provide natural advantages to the mill resident in a market area.” The company’s primary rebar market area includes Oklahoma, Kansas and portions of Nebraska, Missouri, Arkansas, and northern Texas. With a market share in excess of 50 percent, the company attributes this competitive edge to its long-standing relationship with leading independent fabricators in the South-Central states, who then shear and bend the rebar to meet engineering or architectural specifications for specialized applications. Bars are rolled in standard diameters from No. 4 bar (one-half-inch or 13 mm) to No. 18 bar (2 1/4 inches or 57 mm). They are then sheared to standard lengths ranging from 20 to 60 feet. Always prepared for customers’ immediate needs, Sheffield maintains a finished-goods inventory of 25,000 to 35,000 tons of rebar.
Sheffield has distinguished itself in the hot-rolled bar market by focusing on specialty products and by targeting customers with specific requirements such as bar shape, size and chemical composition. From its Joliet Mill, the company also has targeted customers with smaller volume needs. These focused markets allow Sheffield the enviable position of acting as sole supplier, in many instances, of unique shapes, sizes or steel chemistries. These products are integral parts of farm and automotive equipment and machine tools and other industrial products. The company has found that such specialized niche markets are not attractive to larger-volume producers of hot-rolled bar.
State-of-the-Art Rolling Mill
The Sand Springs operation boasts a state-of-the-art Morgan-Pomini rolling mill, which started up in 1995. “We expanded our capacity to make finished products,” explains Ackerman. Prior to the acquisition of this new mill, only rebar and fence-post materials were manufactured here. “We now have made upgrades to our product line and we can produce higher-value products, which will get us into higher-value end-user markets,” he continues.
Consuming more than 50,000 tons of scrap metal each month, this facility is a major recycling force in the Midwest. The melt shop produces a wide range of carbon steel billets using literally dozens of scrap recipes to ensure the desired chemical composition of the final product. The company also is beginning to manufacture alloy steel for higher-value end-users.
Sheffield’s primary raw material is steel scrap from industrial, obsolete automotive and railroad scrap sources. The company is the largest scrap buyer in the Oklahoma area, converting more than 750 train loads of scrap each month into steel products. Scrap steel is melted to about 3,000 degrees Fahrenheit in the company’s two electric arc furnaces, each with the capacity to hold 85 tons of molten steel, producing more than 600,000 tons of steel annually. Product is then cast into billets and subsequently is taken to the rolling mills. From the rolling mills, product is either put into a warehouse, shipped directly to market or sent to Sheffield’s own fabricating facilities.
The new Morgan-Pomini rolling mill converts the steel billet into almost a half-mile of one-half-inch diameter rebar at rates in excess of 50 tons per hour. The billets are reheated to a malleable form to be run through the rolling mills. Seventeen stands are part of the entire process. Each stand has a specific shape through which the steel is extruded to produce the desired shape.
Customer orders are processed and delivered in a timely manner, thanks to Sheffield’s new bundling equipment and a state-of-the-art finished goods warehouse, where shipping crews use high-tech radio frequency terminals and bar coding to ensure efficiency and accurate shipments.
Assured Quality: ISO-9002 Certified
Sheffield’s production out-put is impressive for a mini-mill. The melt shop has a capacity of 625,000 tons of raw steel per year. Annually, the Joliet facility’s rolling mills produce 130,000 tons of product, while the Sand Springs rolling mill is designed to produce some 450,000 tons. The Kansas City facilities fabricate more than 30,000 tons annually.
Both the Joliet and Sand Springs facilities are ISO-9002 certified, and this certification assures Sheffield customers of the excellence so necessary in manufacturing their own high-quality products.
Impressive Customer Loyalty
“The way we do business distinguishes us from most of our competitors,” explains Ackerman. “We are very heavily customer oriented, and because we attempt to build our business by servicing our customers’ every needs, we have a very high customer loyalty.” Because of its reputation for product quality, prompt delivery, and reliable service and technical assistance, the company enjoys a number of long-standing customer relationships in each of its product markets.
About 75 percent of Sheffield’s products are sold through its own sales force, and the remainder is sold through customer service representatives. Ackerman credits the company’s total commitment to service orientation for playing a major role in Sheffield’s distinction in the industry. “It’s our willingness to go the extra mile for our customers,” he says. “We have built a reputation among our customers for being loyal and dependable, and for providing good service.”
Future plans include the construction of a new reheat furnace at the Sand Springs rolling mill. This will enable the company to produce a better yield and a more uniform product. Plans also include modernizing the melt shop to improve the efficiency as well as to enable the company to manufacture higher alloy steels.