AMM - July 22, 2003

Aluminum extruder launches operations in Va.

BY PHILIP BURGERT

CHICAGO, July 22 -- Ramp-up production of a new aluminum extrusion plant, which began operations this month in Prince George County, Va., has been sold out through the remainder of the year to more than 10 mostly large service center customers.

Service Center Metals (SCM) will begin shipments the first week in August and will slowly increase production with its 3,100-ton press, R. Scott Kelly, president and chief executive officer, told AMM in a telephone interview.

The founders of the company, which plans to sell its output only to service centers, are three former executives of Reynolds Metals Co. and other aluminum producers, who say they intend to take advantage of opportunities created by consolidation in the aluminum industry in recent years.

"This allows us to focus on a particular product mix and to focus on a certain customer with the best quality and service," said Kelly. "We know the business very well. Our equipment is built around the requirements of our customers."

Kelly declined to discuss the total output capacity of the new company, but said that about $13 million had been invested in the startup. He added that the initial 77,000-square-foot plant is designed so it can be doubled in size to accommodate growth.

The SCM plan initially will list 330 shapes in its product list. However, the company plans to expand its offerings over time, Kelly said. The 3,100-ton press can produce up to 9-inch circles and 15 pounds per foot, he said.

Initial employment at the Prince George County site is 36 workers. SCM executives said the company decided to locate in Prince George County because of the availability of skilled and unskilled labor, some of which previously had worked for Reynolds, along with attractive logistics and a "pro-business environment."

The plant is located in South Point Industrial Park, an enterprise zone, just South of Richmond. SCM received a $1-million loan for equipment purchases from the Virginia Small Business Financing Authority.