When clean is what you need, stainless steel outshines most other metals, with its hygienic characteristics making it an ideal choice for extensive use in commercial food manufacturing plants. But a closer look shows competition could be emerging from within.
"Whether it's soft drinks or soy products or corn products—anywhere you need hygiene—stainless is used because stainless cleans so well," Dan Greenfield, director of investor relations and corporate communications at Allegheny Technology Inc. (ATI), Pittsburgh, said.
Traditionally, stainless types 304 and 316 go into the cooking vats, mixers and ovens in plants across North America that process food. Producers haven't heard of other materials taking market share from stainless, but the customary types are being challenged by a newer, but still stainless, material lean duplex grade 2101 produced by Outokumpu Stainless Inc., Schaumburg, Ill.
"We have seen some usage changeover and we've seen a lot of interest, and we're encouraged that we'll see pretty fair growth in the use of lean duplex in the future," said Chuck Turack, Outokumpu Stainless' vice president and general manager of group sales and marketing for North America. "But as in any new alloy in an application, acceptance is a slow process."
The 2101 product isn't necessarily less expensive than 304, but it is competitively priced, Turack said. "The significant opportunity for 2101 is its properties of high strength and corrosion resistance. You can use a thinner material and have weight savings in the equipment but with the same strength. That's where the cost savings comes in."
Paul Sedivy, marketing director of high-purity tubing at RathGibson Inc., Lincolnshire, Ill., which makes stainless tubulars, said there are a couple of newer alloys that food processing machinery design companies are starting to take a look at, including ATI's AL-6XN.
"As we continue to try to push the marketplace to think about alternative alloys, people are resistant to change," he said. "They all love the idea that there's a better alloy and that you don't need to replace the line every six to 12 months."
However, alloys other than Type 304 can be far more expensive, which makes companies hesitate on substitution, Sedivy said. "They have to look for the tradeoff and do a cost-benefit analysis before they're willing to make the investment."
Universal Stainless & Alloy Products Inc., Bridgeville, Pa., makes tool steel plate products that also are used in food-processing machinery.
Christopher M. Zimmer, Universal's vice president of sales and marketing, said the company offers more than a dozen grades of tool steels, the use of which varies depending on the application. "It goes into cutting equipment, pulverizing equipment, all different forms of processing," he said. "The nature of the product is (that) it is very hard and suits cutting device applications requiring high strength."
Assessing the stainless and specialty steel requirements of companies making food-processing machinery is a tough call right now.
Food processing is a big part of the business for stainless steel materials, Turack said, adding that he believes this will continue to be the case. "We rely heavily on that segment as a driver in the consumption of stainless steel," he said. "But where it's going right now is anyone's guess. We have unprecedented things happening."
To help plan, producers keep in touch with service centers and machinery manufacturers as well as keeping an eye on the food manufacturing companies themselves.
Zimmer said there could be near-term slowdowns in capital investment at food-processing companies. "If there's a piece of equipment scheduled to be replaced at a three-year life period, maybe they get three and a half years out of it instead," he said. "There will be a bit of a pause."
Turack is expecting long-term growth in the market. "Because of the growing worldwide population, there will be an expansion in the need for food-processing equipment," he said. "With the high quality of North American food-processing equipment, those companies should see export opportunities."
Food equipment generally is a steady business, Greenfield said. "It hits bumps when something new comes along—a new type of product or process—but it's one business that seems to just continue to go on. People need food."
Another factor keeping the food-processing equipment market healthy is the finite lifespan of food processing machinery and cutting tools, Zimmer said. "Operators need to regularly replace a lot of this equipment and tooling, so manufacturers have a bit of protection in that respect." MARIA GUZZO