Fabricated Metal Product Manufacturing
Companies in this industry transform purchased metals into intermediate or end-use products by forging, stamping, bending, forming, welding, machining, and assembly. Major companies include Ball Corporation, Flowserve, Gibraltar Industries, Mueller Industries, Snap-On, The Timken Company, and Valmont Industries (all headquartered in the US), as well as Jiangsu Guotai International (China), Schaeffler AG (Germany), and Toyo Seikan (Japan). Because of the special manufacturing processes involved for individual parts, most companies make a limited range of products.
Price recovery for oil and other key commodities contributed to stronger economic growth in 2017 and 2018. However, rising global trade tensions and higher interest rates could pose risks for continued robust economic growth, according to the IMF. Slower economic growth or a drop in corporate capital expenditures could reduce demand for transportation equipment and machinery, which are leading end-use markets for many types of fabricated metal products. Top producers of fabricated metal products include the US, China, Japan, Germany, Italy, and Canada.
The US fabricated metal product manufacturing industry includes about 51,000 companies with about $338 billion in combined annual revenue. Coverage of key components of the fabricated metal product manufacturing industry can be found in the following industry profiles: Architectural & Structural Metals Manufacturing; Gun & Ammunition Manufacturing; Handtool, Cutlery & Flatware Manufacturing; Hardware & Fastener Manufacturing; Machine Shops; Metal Coating, Engraving & Heat Treating; and Metal Valve & Pipe Fitting Manufacturing.
Globalization and customer concentration have intensified competition in the fabricated metal products industry. OEM customers increasingly seek efficiencies by buying more from fewer suppliers. Many middle-market companies are seeing their margins get squeezed as they try to compete with their larger counterparts for this reduced number of overall contracts. Profits tend to be highest for small, local niche companies, as well as for global market leaders that enjoy significant economies of scale.
The US fabricated metal product manufacturing industry as a whole is fragmented: the largest 50 companies account for about 20% of revenue. But concentration can be high in product segments such as boilers, cutlery and handtools, metal cans, and springs.
Mergers & Acquisitions -- Middle-market companies may seek to move toward the market-leader end of the industry spectrum through M&As. Acquisitions can increase market share, but for margins to improve, combined purchasing power and cost savings must be realized quickly.
Niche Focus -- Companies that specialize in niche products tend to enjoy higher-than-average margins. Middle-market companies may decide to shrink their product focus to grow margins. But to be successful, companies need to dominate their chosen niche.
Regional Expansion -- Smaller companies can expand their niche expertise by duplicating their business model in new regional markets. Custom work and small product runs allow niche companies to more easily pivot as market conditions change.
Products, Operations & Technology
Major segments of the fabricated metal products industry include architectural and structural products; forging and stamping; machining; cutlery, tools,
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms