The “bigger is better” philosophy has gone somewhat out of favor in the current economy, as corporations needing to improve bottom-line performance shed non-core businesses so as to make more doing less. For certain companies, such as President Titanium of Hanson, Mass., that’s not a trend, it’s a family tradition.
“My dad started the business in 1973 as one of the first companies to distribute titanium for spot buys,” notes Shawn MacLeod, vice president. “Say a machine shop needs 500 pounds of titanium sheet plate to fill their job needs. Now, they could go to the mill and order it, but because it’s a relatively small quantity, it’s going to be very expensive. We, however, purchase in bulk quantities and inventory titanium product specifically for buyers with these small needs, so it’s much less expensive to order from us.”
He notes, “It’s a niche business: We’re only one of four major players that sell 6AL/4V, 6AL/4V ELI, and CP-Grade 4 titanium bar, billet, sheet, and plate in the country. And what makes President Titanium stand out in this niche is that we have the largest inventory, in the greatest range of sizes. Sure, other suppliers might stock titanium bar in one-, two- and three-inch diameters, but if you’re looking for 1 3/8, or 1 ¼ or 2 5/8, then you can rely on us to have that in our inventory.”
Over the years, President Titanium has opted to stick with the metal it knows best. “Early on, we thought of dealing with stainless steel, but ultimately decided that we could build a successful business servicing a specialized niche with our knowledge of the titanium markets and our dedication to delivering the highest quality product with the highest level of customer service.”
Indeed, today President Titanium is a choice supplier for over 5,000 customers, 70 percent of which are located in the United States. “Within our narrow niche, President Titanium is a brand name recognized for our longevity and our quality.”
He stresses that the company only stocks titanium from U.S.-based mills, located mostly in the Ohio and Pennsylvania region. “There are just too many quality issues related to foreign sourced titanium, particularly some of the stuff that’s coming out of the mills in places like China,” MacLeod says. “In addition, beginning about 10 years ago, traceability became very important; suppliers have to certify all third party sourcing in case there’s an issue about a defective part and you have to document everything that went into making that part. We found that getting third party certification from foreign mills was just very complicated. So, one of our chief competitive differentiators is that we use domestically supplied titanium only and we simplify any issues that could arise out of third party certification. Everything we supply is immediately traceable.”
One indication of the consistent quality President Titanium provides is that its quality system is ISO: 9001:2000 certified and it is an approved supplier for Pratt & Whitney, Boeing and General Electric. “In aerospace, titanium parts are used in mission-critical components that simply can’t fail. That we meet the supplier standard of these OEMs, and have done so for over 30 years, is the best testament to our quality commitment.”
Titanium was once known as the “space age metal” precisely because of its popular use in the aerospace industry. It has a low density and is corrosion-resistant, and can produce strong lightweight alloys with metals such as iron and aluminum. In its unalloyed state, Titanium is as strong as many steels, but 45 percent lighter. It is also twice the weight of aluminum, but twice as strong. This combination of strength and lightness also makes it popular for applications in the chemical and petrochemical processing, automotive, medical, jewelry and telecommunications industries.
MARKET TITANS, PRESIDENTIAL STATURE
The name Titanium is derived from the Greek work “titanos,” which refers to the Titans of Greek mythology, the elder gods who ruled before Zeus and his fellow Olympians. So how did a material associated with the Greek gods get a “presidential” designation in a corporate name? “At one time my father was going to base the company in Quincy, Mass., which was the birthplace of John Quincy Adams, sixth president of the United States and his father, the second president. Although for various reasons he didn’t acquire that location and the company ended up in Hanson, which is a suburb of Boston, the idea of naming it President Titanium after the Adams heritage stayed.”
President Titanium employs 26 and maintains 40,000 square feet of space for cutting and machining operations, as well as warehousing. An inside sales force interacts directly to take customer orders and answer inquiries. In most cases, orders are shipped within one to two days.
As with anyone who purchases metal on a spot market, President Titanium is highly attuned to detect trends in availability and pricing. “You want to have enough inventory to supply customer demand, but you don’t want to order too much, particularly if prices start going down,” MacLeod says. “It’s a tricky business and is probably why there aren’t many that try to do this sort of thing. We try to buy sufficient quantities in a down market to take advantage of the pricing, but, then again, you don’t want to get saddled with inventory that isn’t going to move because of demand trends.”
Ensuring supply is critical. “Cycles come and go,” MacLeod notes. “It’s happened in the past that mills were taking about a year to fill orders. Needless to say, that kind of scarcity also drives up prices. We just work to keep an eye on what may be affecting prices and lead times and prepare for the next cycle, whatever it may be.”
He emphasizes that “at all times we’re looking out not just for ourselves, but our customers. We always offer a fair price based on what we obtained product for; we don’t engage in price gouging because we happened to stock inventory when prices that were low and for some reason or another skyrocketed. That’s not how you treat customers and continue to maintain long-term relationships.”
After so many years dealing exclusively in titanium, MacLeod says that the company relies most on “gut feel” for the market, as opposed to computer models to anticipate these trends. “It’s a little fly- by-the-seat of your pants sort of thing, but it’s the only thing we do, and over the years we’ve gotten pretty good at it.”
Even given the current state of the economy, MacLeod says business remains strong, another advantage of being a niche business in a time when big businesses are struggling. “Aerospace is a big user of titanium, and that industry is still doing ok; companies such as Airbus are still developing new aircraft and taking orders. And, whatever the state of economy, our customers know our commitment to service and quality as a family-owned business that has always met their needs with integrity to meet whatever goals they’ve set for us.”
That’s how President Titanium has elected to become the gods of a very specialized market.