Sapa's Bright Forecast for US Aluminum Extrusion Products

Apple’s recent announcement to give manufacturing companies in the US some production of its Mac computers has received plenty of media attention as well as excellent analysis of the rationale companies give for re-shoring.

MetalMiner recently spoke with Steve Jackson, business development manager of thermal management for Sapa Extrusions North America, about some of the trends his manufacturing organization has seen.

MetalMiner: Have you seen any renaissance of manufacturing in the US due to re-shoring?

Steve Jackson: Yes, this is a trend we have been seeing for the last several years. It has really picked up this past year. Companies are shifting the production of products from Asia back to North America. We work with a large lighting manufacturer that has closed down LED facilities in Asia, in the process bringing the production of 3 million pieces of aluminum back to the US. We are seeing this across the board. We’ve also seen a significant increase in RFQs related to the aluminum industry – ranging from lights to computers, cases to enclosures – that would have gone overseas a few years ago.

MM:From an industrial metal industry perspective, why did your customers go offshore in the first place? How has that changed?

SJ: Twenty years ago, customers seeking die-castings-and-stampings solutions often looked overseas, usually because of North American tooling costs. For example, a die that might cost $70,000 to make in the US could be produced for $20,000 in Asia.

That has all changed. In North America, our tooling industry had a big shakeup that reduced the number of suppliers. Those that remained became stronger. All extruders and casters have increased productivity. We’ve invested in faster CNC and EDM machines. There isn’t a big savings for the raw material – a piece of aluminum, zinc or steel is pretty consistently priced around the globe – but Sapa couldn’t compete effectively a few years ago because our anodizing and fabrication couldn’t be delivered cost-effectively.

Twenty years ago, Asian producers could do this faster and at a subsidized cost. But today, the customer wants three things – high quality, at a fair price, with timely delivery. North America has become very good and competitive at meeting those customer demands, and US manufacturers can now offer all three: quality, delivery and competitive prices.

MM: What steps do you see electronics manufacturers making that indicate a difference in terms of where production occurs?

SJ: Today, major electronics companies are demanding local resources and global support. The design may take place in one country while manufacturing occurs across the country or the world.

MM: What kind of impact will these trends have on aluminum demand specifically?

SJ: Demand will be strong for aluminum across the board, but in my area of focus – electronics and lighting – we’re expecting exceptionally strong demand. Electronics and lighting have very unique thermal challenges, and the best and most cost-effective thermal solution typically involves aluminum.

MM: What else is happening in five to 10 years? Where are we in the trend cycle?

SJ: As more manufacturing returns to North America, the US metals industry is in a great position. We understand that customers want high quality and short lead times at competitive prices. Our engineers are some of the best in the world, and we have rediscovered how to improve manufacturing and efficiency. The US metals industry is poised for the future.