CHICAGO - From the seed of
an idea only two years ago, privately owned ONeal
Industries Inc.s manufacturing subsidiary has gained
traction, logging double-digit revenue gains during the
companys first full calendar year in operation and
boasting at least one capacity expansion on the way.
Services (OMS), a sister company of major metals distributor
ONeal Steel Inc., was started up during the first half of
2011 as Birmingham, Ala.-based parent company ONeal
Industries looked to separate the companys value-added
processing functions from its core distribution business.
By splitting manufacturing from
metals distribution, both companies have done a better
job of capturing new business that fits each of the
models, OMS sales and marketing vice president Gerald
Brockman told AMM.
OMS, which supplies fabricated
metal components and welded sub-assemblies to original
equipment manufacturers (OEMs) from 11 facilities, saw 2012
run-rate revenues jump 25 percent from a year earlier, Brockman
said. Some of that growth is attributed to its acquisition of
Iowa Laser Technology Inc. (Jan. 3, 2012, amm.com),
which laser cuts, welds, machines and forms sheet, tube,
stamped and spun metal parts.
OMS, which operates facilities
throughout the United States as well as in Monterrey, Mexico,
is now working to expand its Greensboro, N.C., facility.
It is primarily a facelift and expansion of space to
house our expanding operations support team there,
Brockman said. We have added, or are in the process of
adding, more capacity of flat lasers, tube lasers, metal
forming and robotic welding to support customers who are
localizing their manufacturing activities back to the
Nearly all of whats made
in Mexico is shipped back to U.S. customers, he said.
OMS was created to be separate
from ONeals distribution arm, but the sister
companies do collaborate on materials purchasing, Brockman
said. We use the same supply chain management team as the
distribution business unit. We leverage that sourcing group and
that buy for OMS. Our inventory turns are about the same as the
distribution business, but we have to build in some safety
stock to account for delayed mill deliveries. We are supporting
production lines for large OEMs, and we cannot afford to allow
their production lines to stop.
The vast majority of OMS
work is custom manufacturing under short- and long-term
contracts. We have almost no transactional business. That
is one of the fundamental strategies in our business
model, Brockman said. Contracts vary from one month to
multiple years, depending on the particular customer and
product line, he said.
The primary end markets OMS
serves range from agricultural, construction and material
handling equipment to mining, power generation, forestry
machinery and railroad equipment. We have done some
renewable energy projects with wind and solar, Brockman
said. What we produce can range from (a) cut-to-shape
component to a fully fabricated frame for some type of
equipment, like a large forklift.
OMS does outsource some
processes that cannot be performed in-house and when its own
equipment is running at capacity, but that is less than 10
percent of the services provided, he said.