Metal Coating, Engraving & Heat Treating
Description
Companies in this industry engage mainly in one or more of the following metal treating activities: heat treating; hot dip galvanizing; enameling, lacquering, and varnishing; powder coating and electroplating; and etching. Major companies include AZZ Precoat Metals, and Valmont Coatings (all based in the US), along with Bodycote (UK) and DOWA Thermotech (Japan).
The global coating, engraving, heat treating, and allied services market is expected to reach nearly $305 billion by 2032 with a compound annual growth rate (CAGR) of 4.1%, according to Dataintelo. The market is expected to boost the expansion of automotive industry.
The US metal coating, engraving, and heat treating industry includes about 5,500 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $25 billion.
COMPETITIVE LANDSCAPE
Demand depends on the level of manufacturing production and construction activity. The profitability of individual companies is linked to manufacturing process efficiencies. Most companies are small and compete by focusing on a specialty customer niche within a local or regional area. The US industry is fragmented: the largest 50 companies generate about 40% of revenue.
Competition comes from metal manufacturers and fabricators that have in-house capability.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services are metal surface finishing treatments including coating and engraving (about 50% of revenue); electroplating, plating, polishing, anodizing, and coloring (30%); and heat treating (20%). Other services include metal processing and metalworking contract and machine shop job work and job order repairs.
Surface finishing protects a metal product from corrosion, improves resistance and functional properties. For example, electroplating involves coating an object in a solution to improve electrical insulation and/or conductivity. Zinc coatings are commonly used to prevent corrosion of steel products. Major customer industries for metal surface finishers are the auto, aerospace, building construction, highway construction, petrochemical processing, and utility markets.
The basic steps in the surface finishing process include material cleaning; preparing, or priming, the surface; applying coating or other treatments (galvanizing, etching, electroplating, or anodizing); curing or drying; and inspection. In the case of heat treating, the material is heated to a high temperature under carefully controlled conditions then cooled rapidly to set the desired properties.
Various alloys of steel and aluminum with unfinished surfaces are transported to facilities specifically designed to perform these services. The company provides the raw materials, such as primers, paints, coatings, caustics, and zinc, to complete the service, while the fabricator typically owns the metal inventory. This arrangement is known as “tolling” or “toll conversion,” and companies that perform this third-party outsourcing are “converters” or “jobbers.”
In most cases, the finished product is shipped directly to the fabricator’s customer. In some cases, the product may be returned to the fabricator for subsequent processing, especially for heat treated products (steel, aluminum, and bronze) where heat treating is used to impart properties of strength and formability prior to further processing.
The global coating, engraving, heat treating, and allied services market is expected to reach nearly $305 billion by 2032 with a compound annual growth rate (CAGR) of 4.1%, according to Dataintelo. The market is expected to boost the expansion of automotive industry.
The US metal coating, engraving, and heat treating industry includes about 5,500 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $25 billion.
COMPETITIVE LANDSCAPE
Demand depends on the level of manufacturing production and construction activity. The profitability of individual companies is linked to manufacturing process efficiencies. Most companies are small and compete by focusing on a specialty customer niche within a local or regional area. The US industry is fragmented: the largest 50 companies generate about 40% of revenue.
Competition comes from metal manufacturers and fabricators that have in-house capability.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services are metal surface finishing treatments including coating and engraving (about 50% of revenue); electroplating, plating, polishing, anodizing, and coloring (30%); and heat treating (20%). Other services include metal processing and metalworking contract and machine shop job work and job order repairs.
Surface finishing protects a metal product from corrosion, improves resistance and functional properties. For example, electroplating involves coating an object in a solution to improve electrical insulation and/or conductivity. Zinc coatings are commonly used to prevent corrosion of steel products. Major customer industries for metal surface finishers are the auto, aerospace, building construction, highway construction, petrochemical processing, and utility markets.
The basic steps in the surface finishing process include material cleaning; preparing, or priming, the surface; applying coating or other treatments (galvanizing, etching, electroplating, or anodizing); curing or drying; and inspection. In the case of heat treating, the material is heated to a high temperature under carefully controlled conditions then cooled rapidly to set the desired properties.
Various alloys of steel and aluminum with unfinished surfaces are transported to facilities specifically designed to perform these services. The company provides the raw materials, such as primers, paints, coatings, caustics, and zinc, to complete the service, while the fabricator typically owns the metal inventory. This arrangement is known as “tolling” or “toll conversion,” and companies that perform this third-party outsourcing are “converters” or “jobbers.”
In most cases, the finished product is shipped directly to the fabricator’s customer. In some cases, the product may be returned to the fabricator for subsequent processing, especially for heat treated products (steel, aluminum, and bronze) where heat treating is used to impart properties of strength and formability prior to further processing.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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