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PCC eyeing fastener feedstock capacity

Keywords: Tags  PCC, Precision Castparts, fastener capacity, titanium, aluminum, Mark Donegan, Alcoa, LISI Aerospace Permaswage


LOS ANGELES — Precision Castparts Corp. (PCC) might be on the hunt for a producer of aerospace fastener stock.

Mark Donegan, chairman and chief executive officer of Portland, Ore.-based PCC, told securities analysts in a conference call that there are "two or three more assets we would like to get our hands on" in the fastener industry. He noted specifically that PCC doesn’t have in-house capacity to produce fastener stock to feed its manufacturing operations but would like to gain that capability.

The aerospace fastener industry has consolidated greatly in recent years and PCC is considered one of the three major global manufacturers, with Alcoa Inc., Pittsburgh, and France’s LISI Aerospace SAS.

Moreover, Donegan’s wish lists are usually taken seriously in the aerospace supply chain. In July 2012, he said during an analysts’ conference call that titanium represented the "one hole" at PCC in terms of melted feedstock for its forging operations and the company would "love to get" input stock. Within four months, PCC had spent $2.9 billion for Titanium Metals Corp., the industry’s largest independent producer (amm.com, Nov. 9).

Since then, PCC has proposed a $600-million purchase of French fittings manufacturer Permaswage SAS (amm.com, June 28).

But Donegan said this week that PCC remains "extremely active" on the mergers and acquisition front and could "probably deploy" $1.5 billion to $2 billion in the next couple of years, although not all of it at one time.

Donegan didn’t say what type of feedstock capacity PCC is seeking. While most aerospace fasteners today are probably aluminum, titanium likely represents the largest growth area since it is considered more compatible with the composites increasingly being used in airframe construction.

The two dominant U.S. titanium aircraft fastener stock manufacturers are viewed as the Dynamet unit of Carpenter Technology Corp., Washington, Pa., and family owned Perryman Co. in Houston, Pa. But other entrants into the market in the past few years have included much larger, integrated titanium producers like Allegheny Technologies Inc., Pittsburgh, which said it has landed firm production orders, and Russia’s VSMPO-Avisma Corp., through its bar and wire-producing unit NF&M International Inc. in Monaca, Pa. VSMPO in 2011 signed a deal with Universal Stainless & Alloy Products Inc., Bridgeville, Pa., to convert VSMPO billet for bar in coils for NF&M (amm.com, Aug. 25, 2011).

About two years ago, New York-based investment firm Cowen & Co. LLC estimated the total annual aerospace fastener market at $3 billion to $4 billion, including not only titanium but also specialty and stainless steels, nickel superalloys and aluminum (amm.com, Aug. 19, 2011).


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