HOLLAND — When outdated machinery forced Genzink Steel Supply and Welding Co. to delay customer orders and send products to other companies, President Brock Mahler knew it was time to invest in new equipment.
The manufacturer of fabricated metal components and welded assemblies installed a new format cutting machine with the intent to increase the speed of delivery time and expand the size of metal it can cut, Mahler said.
For the Holland-based company, the investment was necessary for it to become more competitive within its current plant footprint, he said.
“We cut a lot of heavy plate steel (and) remaining competitive is imperative on the pricing side and also on delivery,” said Mahler, who’s served as president of Genzink for four years. “We are trying to push our deliveries to a much tighter schedule time than we have ever had before.”
The $500,000 investment from Genzink in the Messer Cutting Systems machine comes as part of an effort to replace the “unreliable” decades-old machines on the company’s 120,000-square-foot factory floor.
“Machine tool technology is changing so fast,” Mahler said. “It’s almost like having old PCs under your desk. If you have one that is three years old, it’s old. It’s not quite as bad with machine tools, but it is getting to the point where they are evolving so quickly that if you are not staying current within six or eight years, you are really outdated on the machinery.”
Instead of keeping inefficient equipment running, Mahler decommissioned the two former plate-burning machines and replaced them with one new machine that can cut through metal 22 inches thick.
The company’s “capacity has nearly doubled in terms of the size of the product we can cut,” Mahler said, noting the new machines can burn plates up to 85 feet long.
Genzink’s investment in new metalworking equipment follows a nationwide trend highlighted by the Association For Manufacturing Technology in its January 2018 U.S. Manufacturing Technology Orders report, released earlier this month.
The report, which tracks orders of machine tools and related equipment, found orders in January totaled $372 million, a year-over-year increase of 44 percent. Orders for metal-cutting equipment reached $79.5 million in the five-state region including Michigan, Indiana, Ohio, Kentucky and Tennessee, a 34-percent increase from a year ago. Companies in the region reported orders of 451 pieces of metal-cutting equipment, according to the report.
According to the association, the equipment orders serve as a leading economic indicator for the manufacturing sector, as companies invest in capital metalworking equipment to bolster production capacity and productivity.
“The large volumes ordered in January were on par with expectations and indicative of the capacity expansion we expect U.S. manufacturers to pursue throughout 2018 and well into the next year,” AMT President Douglas Woods said in a statement.
TRACKING THE ECONOMY
After the business struggled during a slowdown in orders from the oil and gas industry during 2014 and 2015, Genzink Steel has continued to grow in all markets the company serves, including off-road mobile equipment and mining. The company builds heavy equipment components and assemblies for customers across North America.
Typically, the company’s orders track with the overall economy, Mahler said.
“A lot of what we do, because we are with the off-road mobile industry — whether that’s an excavator, grader or a mining piece of equipment — we are a seeing a resurgence,” he said. “There’s a lot of optimism in infrastructure spending, whether that’s concrete or asphalt … and we see our business continuing to gain strength.”
Mahler projects Genzink Steel to grow revenues roughly 15 percent over the next two years, in part because of the strength of the mobile off-road equipment and mining industries — each roughly 20 percent of the company’s business — and the machine tool and automation sector.
Currently, the company has more than 100 employees and generates annual sales greater than $20 million.
“We have had a nice run of growth — fairly long and fairly steady,” Mahler said.
He also expects the Trump administration’s decision to levy tariffs on imported steel and aluminum to have little effect on Genzink Steel, given the company’s low volume.
Genzink makes products out of aluminum, stainless steel and carbon steel and prices every project based on the current cost of the metal it needs.
“It’s quite a bit different for us. We are not really a slave to the import market,” Mahler said. “For us, it’s more of a spot-market thing, and costs for us on materials is a pass-through.”
INVESTING IN STAFF
As it invests in upgrading its equipment, Genzink Steel also is investing in its staff, rather than adding more positions, expanding or growing by acquisition. One reason, Mahler said, is the company has struggled to find skilled workers.
“What we found is you can certainly find employees that have a heart to work and have a willingness, but maybe the skills don’t match the need,” he said. “So we are taking the employees and we’re investing a lot in their skillsets — technical training, blueprint reading and machine tool technology.”
That training takes place both internally and via partnerships with local community colleges and universities, Mahler said, calling it a “great value” for employees.
The company could look to expand in the future, he said, but as of right now, “we’re choosing to invest in our employees.”
Made in Michigan: Genzink Steel Supply and Welding Co. manufactures fabricated metal components and welded assemblies for the mobile off-road equipment and mining industries and the machine tool and automation sector. The company employs more than 100 people at its 40 E. 64th St. plant in Holland, and generates annual sales greater than $20 million. Genzink recently invested about $500,000 to upgrade its metal cutting machinery and improve throughput and on-time delivery.