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Mills are ultra-busy cooking up alternatives to Type 304

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It's a small niche market, but with more than a ton of stainless steel in every restaurant kitchen in the nation it's not one to be treated lightly.

Steel producers are paying close attention to the sector, which is driving them to create specialized material. While Type 304 stainless has long been the industry standard for use in commercial kitchens, producers say they've recently started making other grades to sell into that market.

Allegheny Technologies Inc. (ATI), Pittsburgh, produces material for the food equipment and appliances market from its flat-rolled stainless division. While Dan Greenfield, ATI's vice president of investor relations, declined to quantify the sector because it's "a small part of the business," he did say the company is selling more alternative grades for culinary uses.

"The big story from the Allegheny side is the continual growth in the use of our 201HP and other low-nickel-bearing alloys," Greenfield said. "They're using more less-expensive material." Type 201 stainless has half the nickel content of Type 304 product, and therefore a lower price tag.

Likewise, stainless made by Taiwan-based Ta Chen International Inc. makes its way through its distributorship into the hands of restaurateurs.

John Hellinghausen, vice president of Ta Chen's Long Beach, Calif., office, said the company doesn't sell any products directly to the food service industry. Rather, he said, it sells to service centers who in turn service the market.

Regardless of the downturn in the economy, sales into the restaurant kitchen market remain strong, Hellinghausen said. "Market demand is still fairly strong and this is despite our publicized recession. The geographic areas performing the best are the Midwest and the Southwest."

Hellinghausen echoed ATI's comments on alloy substitution. "Stemming from last summer's nickel price surge, many requirements have shifted from a 304 stainless to 301, 430 and 201, where permissible," he said. "Response outlook in this market segment continues to be positive."

The same holds true at Outokumpu Oyj. The Espoo, Finland-based stainless producer, which has processing and distribution capabilities in North America, said it has been prompted to do more manufacturing of non-traditional stainless material because customers are seeking less-expensive options.

Chuck Turack, Outokumpu's vice president and general manager of sales and marketing for the company's North American business, said the company is undergoing a three-year capital expansion program to produce more ferritic material, which primarily consists of the 400-series grade that contains no nickel.

"The primary driver for us in ferritics is to be able to supply the food service equipment, or as we call catering," Turack said. "We put together a team of commercial people who did extensive market analysis to pull information from resources about going to ferritics." Also to that end, Outokumpu markets a special finish for its stainless material specifically for use by the restaurant industry. The company said its HyClean SuperBrush stainless has a smooth and corrosion-resistant finish that creates less potential for contamination in hygiene-critical settings like food production and catering.

Turack sees the restaurant kitchen market as a growing one, not only in North America but also worldwide. "Certainly on a global basis, because of the expanding middle class globally, this segment will continue to grow, probably slightly above the overall average," he said.


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