LOS ANGELES Precision
Castparts Corp. will use its existing specialty alloys
operations to extend the downstream product role of Titanium
Metals Corp. under Timets future ownership by PCC.
PCC chairman and chief executive
officer Mark Donegan said last week that PCC plans to utilize
the assets of Huntington, W.Va.-based nickel and cobalt alloys
producer Special Metals Corp. to stretch Timets product
range within its new parent company.
"Where SMC was a fully
integrated mill (when it was acquired by PCC in 2006)," Timet
is a "fully integrated meltertheyre not a mill,"
Donegan told financial analysts at a meeting in New York.
However, PCC can "match" SMCs downstream assets with
Timets melt capabilities and "create a fully integrated
mill" out of the titanium producer.
While Dallas-based Timet makes
different products than SMC, its role within PCC will be
similar to SMCs "in terms of being able to supply our
internal needs," Donegan said.
Timet can use SMCs assets
in such locations as Elkhart, Ind., as well as Huntington to
convert its material "into shapes they cant do
todaytheyre outsourcing that today," Donegan
While Donegan didnt
mention any specific outsourcing agreements, Timet has at least
two with Kokomo, Ind.-based Haynes International Inc. and
Wyomissing, Pa.-based Carpenter Technology Corp.
In a 20-year deal signed with
Haynes in late 2006, Timet agreed to pay an up-front fee of $50
million to the high-performance alloys producer in exchange for
Haynes commitment to provide capacity to process up to 10
million pounds of flat products per year on its four-high
Steckel rolling mill in Kokomo.
That contract includes an option
to boost annual volume to 20 million pounds, subject to Timet
providing financing for the expansion required to meet the
higher volume. Moreover, Timet also would pay Haynes for
processing services during the term of the agreement and sell
"certain quantities of titanium metal" to Haynes.
Additionally, in 2007 Timet
signed a minimum 12-year agreement with Carpenter under which
the specialty metals producer would provide forging services to
Timet while Timet would provide Carpenter with toll melting.
The deal could run to a maximum of 20 years.
Spokesmen for both Haynes and
Carpenter said this week that their agreements with Timet
remain in effect.
Industry sources said one of
SMCs assets that could prove particularly valuable to
Timet is its 110-inch mill in Huntington, which could be used
to convert Timet melted product into aerospace alloy titanium
Asked during his appearance last
week if Timet sells into markets where PCC isnt
especially active, Donegan cited the chemical process industry,
where titanium is in demand for its corrosion-resistant
Portland, Ore.-based PCC expects
to close its $2.9-billion acquisition of Timet by the end of