Tube cutting is their game

Dec. 1, 2006
Mercury Specialty Products Inc. (MSP) was founded in Winnipeg, Manitoba, Canada, in the mid-1970s as a fabricator of products for the health care industry.

Laser tube cutting is at the heart of almost every assignment

by David A. Belforte

Mercury Specialty Products Inc. (MSP) was founded in Winnipeg, Manitoba, Canada, in the mid-1970s as a fabricator of products for the health care industry. In 1996, Mike Lee was attracted to MSP for its welding and fabrication capabilities; a company he owned, that was building cleanrooms for the paint and finishing industry, lost a sub-contractor to whom it had licensed its proprietary cleanroom technology. Lee had a contract to fill for General Motors (GM) so he searched for a metal fabrication facility that could complete the cleanroom structures that were required in the paint and finishing industry. Because he was obliged to finish the GM contract he purchased MSP, and the rest is history.

Lee purchased the company in 1996 and over ten years has steadily invested in new machinery and equipment so that the company could become more of a full line job shop for large OEM manufacturers. Where it once specialized in grab bars and hand rails for the health care industry, it now fabricates a myriad of parts from tubing and supplies these to a more diverse customer base in agricultural equipment, recreational vehicles, transportation, and fitness equipment.

At MSP, the emphasis on metal fabricating work began to change as the combined company was no longer just doing cleanrooms for the paint and finishing industry. Instead it was making parts for general manufacturing. Lee had gradually changed the look of the company from one that was just doing grab bars and handrails rails to one that would take on almost any tubular structures, with diameters from 0.50 inch to 4 inches. For example, by 2002 the company had become a supplier to a major bus company in the Winnipeg area, for whom it was doing the majority of interior stainless steel work and a large percentage of the structural work particular to those busses.

Once it had completed all the contracts for cleanrooms, Lee let his original company just fade away and he concentrated on MSP by taking a serious look at the marketplace for tubular products to determine where the potential was. MSP’s markets were mainly in Canada but because of the bus company’s operation in the U.S., Lee established a business office in Minnesota to service that region, and the company began to ship tubes there. That led to other opportunities in the northern tier of states in the U. S. as well as in Canada.

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In 1996 MSP’s assets were old; a hand-made tube bender, large and small punch presses, and some basic welding and polishing equipment. Lee’s capital improvement plan brought in two new tube benders that expanded the capacity and capabilities from a maximum tubing size of 1¼-in OD to 3-in OD. He invested in capital equipment because the market for products fabricated from tube was growing and MSP need to expand its equipment capability. This new capacity increased MSP’s customer base and it soon expanded into the recreational vehicle and fitness industries.

The company was still using a series of cold cut saws to cut tubes to length, and mills to cut slots and holes. A step up to indexing band saws that could cut bundles of tubes to length and more cold saws were added as the business grew.

In 1996 MSP was a six-employee shop in a 5000 ft2 Quonset building. First, it moved into a 10,000 ft2 square building in 1998 that allowed space for more machines and in 2005 to a modern 23,000 ft2 facility where it employs 22 people.

About six years ago Lee started to look at laser tube cutting technology; because of the work for the bus company, and others, he could see new jobs for cutting a multiplicity of holes, slot, copes, and mitres. He had been introduced to tube cutting by North American suppliers and in 2002 he made a trip to Europe to see what companies there had to offer. He came back with the impression that to be a real player in tube fabrication MSP needed to compliment its tube bending equipment capability with laser cutting services. It was seeing many jobs that involved drilling holes, milling slots, and so on, that required laborious secondary operations, like putting holes in the top of bus roof bows; that lasers could do before bending the tube while simultaneously cutting the tube to length. MSP had looked at adding drill tables or punch press tooling but all of it was very capital intensive; and after the European trip he had pretty much concluded that the tube lasers offered the best solution for the future.

In 2005 funding became available so he was ready to buy the laser technology. All the tubing laser suppliers offered different features and benefits, but most equipment were then limited to 20 feet of bundle loading; you couldn’t get 26-foot capability at the time that Lee thought he needed. The company was using 24-foot lengths of hollow structural tube and 20-foot lengths of electric welded tube, but to improve yields for specific customers it was necessary to go up or down in size-in most cases going beyond the 20-foot limit. In August of 2005, MSP purchased an Adige LT712D because it offered the best combination of speed and versatility in MSP’s most common size ranges. Furthermore, the 712D offered a 24-foot bundle loader with a 14 ½ foot discharge table. It was a big investment, but contracts from existing customers and the prospect of new clientele supported the decision.

Ideally, Lee is looking for the laser tube cutting operation to become more of an independent element of the company’s business model, so that it is contracting laser cutting to others without further value-added processes and fabricating. MSP processes hundreds of thousands of tubing feet a year. The advantage to MSP is to not invest in inventory, only being paid for the process time, and as utilization grows the company’s economic competitiveness grows.

MSP is a niche player in the world of contract tube fabricating. It is focused on tubing, almost like a boutique. Although the company has competition, the majority of laser tube cutting machines in Canada and the U.S. are still located in OEMs. MSP is still unique as a highly specialized tube fabrication facility. The company’s competitive advantage is that it has capacity for fast turnaround and it has a slight advantage in exchange rates between Canada and the U.S.

The laser is driving change in MSP’s business model; a fact Lee always thought possible. Lee considers the decision to buy a laser tubing cutting system as his “Field of Dreams;” “build it and they will come.” If MSP is going to be a leading player in the world of contract tube fabrication, it must continue to invest in capital equipment that offers symbiotic relations. This theme is supported by the continued acquisition of additional laser tube cutting systems. The laser met Lee’s expectations, which were high to begin with. He knew what the laser could do, but seeing it happen was gratifying.

The Adige unit was installed in November 2005. After training, MSP was cutting tubing, problem free, in January. The company is now a leading edge tube cutter in Canada and the U.S. Lee states succinctly, “We could not compete effectively without a laser tube cutting system.”

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