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The eBearing News
October 13, 2006
Timken Cutting Seamless Tube
copyright © 2006 eBearing Inc.
The Timken Company (USA; NYSE:
TKR) announced it will shut down
or sell its Desford seamless steel tube manufacturing operations in Leicester, England.
Established in 1972, Timken acquired Desford Steel Tubes Ltd. from Hay Hall Group Ltd.
in 1998 -- making Timken the world's largest producer of
seamless tube. In 2002, the operations were renamed Timken Alloy Steel Europe.
Desford's seamless tube competes in the European market against tube from companies such as Ovako Oy
in the bearing industry and against a wider variety of competitors into other machining and precision
mechanical applications markets.
The decision is part of Timken's ongoing rationalization and reorganization, exiting as many
low-margin and unprofitable market segments as possible, and commoditized segments in particular.
Desford has the misfortune of being both unprofitable and in price-sensitive products.
Reportedly, programs to help Desford's productivity and profitability have been largely unsuccessful.
Timken said it will begin consulting with representatives of Desford's 400 affected workers,
noting there is the potential for, "alternative solutions to closure." Shutting down the facility
in a safe manner would require approximately six months.
With annual sales hovering between USD $85 million and $95 million -- but unprofitable in recent years --
Desford is a standalone facility which has the potential to be acquired by another steelmaker.
Key segments of the European steel industry are in the midst of a wave of acquisitions. Companies
such as Tata Steel, Mittal Steel, another European steelmaker, or even Ovako are all
considered potential candidates to buy Desford.
Sal Miraglia, Steel Group President, said:
"The proposed action is part of the company's strategy to focus on lines of business that produce
differentiated products while driving profitable growth.
Exiting this business would further advance the focus of the Steel Group on
differentiated products that deliver value to both customers and shareholders."
With Desford's closing or sale, Timken said its bearing manufacturing operations in Europe would
be affected, but it would, "secure a reliable alternative source of steel tube," for those plants.
Desford recently introduced cutting and turning capabilities; it can now supply customers
with tube already cut into rings suitable for further machining,
turned rings ready for final finish and heat treat, and finish turned components.
The operation's current capacity is unclear; when Timken acquired Desford from Hay Hall in 1998,
annual capacity stood at 150,000 tonnes from the two seamless mills, and 30,000 tonnes from
the cold reducing equipment.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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