The Herald, Sharon, Pa.

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June 12, 2013

Sharon Tube’s back with $45 million line

WHEATLAND, FARRELL — As Bill Perrine walked into JMC Steel Group’s new $45 million production line, an excited shop worker couldn’t help himself and had to stop Perrine.

“It’s good for Sharon Tube to be back,’’ the worker said.

“It sure is,’’ Perrine said with a smile and a back slap.

JMC on Tuesday unveiled its newly expanded tube production plant, which doubled the size to 250,000 square feet. As part of the expansion, JMC brought back two old local favorites – Sharon Tube and Perrine.

Sharon Tube Co. had operated independently in Sharon as a pipe and tube producer since the mid-1930s but was bought in 2007 by the Carlyle Group, a Washington, D.C., investment group. The company was folded into Carlyle’s John Maneely Co., which owned Wheatland Tube Co. At the time, Perrine retired as Sharon Tube’s last president.

In 2011 the Zekelman family of Canada bought John Maneely from Carlyle, and the local pipe and tube operation now comes under the name JMC Steel Group. Sharon Tube doesn’t exist as a free-standing company. Rather, it continues on as a brand name and subsidiary under JMC Steel Group, which is the largest independent tubular manufacturer in North America.

In April Perrine was named JMC president of Drawn Over Mandrel division, which includes the Sharon Tube brand. DOM isn’t a type of tubing, but describes a manufacturing process that gives it more-exact dimensions. The new expansion gives JMC expanded size ranges from 6.5 inches to 9 inches outside diameter, which mostly means larger sizes.

Perrine said it’s impossible to give a figure for the number of product sizes the Sharon Tube brand can fill within that range.

“Really, it’s infinite,’’ he said. “We’re running a custom shop here.’’

Perrine is used to sharp performance. He served 24 years with the 475th U.S. Army Reserves Quarter Masters Group as a master sergeant – a subject he only brings up quietly.

Sitting on Church Street in Wheatland, a bit of the 1,000-foot-long plant stretches into Farrell. As a result of the expansion, 13 new workers were hired and an additional number were recalled from layoffs, but the company didn’t immediately have that figure. In all, 160 work at the plant.

Touring through the plant, Barry Zekelman, JMC’s executive chairman and CEO, noted the company didn’t ask for any tax abatements or hefty loans for the expansion.

“We’re very happy to be here. This is a major investment for us,’’ Zekelman said. “I’m proud of it. I grew up on the shop floor – for me, this is really exciting.’’

Pointing out features such as natural lighting, clean floors and an almost stark quietness of the expansion’s interior, Zekelman said this ushers in a new era for manufacturing.

“You want people to work in a clean, safe working environment,’’ he said. “This also means the future. It means longevity.’’

He added it was also gratifying to create jobs where the average salary runs between $50,000 and $60,000.

End uses for the Sharon Tube brand of products cut a wide swath, such as for hydraulic cylinders, pump barrels used in oil country, drive shafts, agriculture and even the defense industry.

While everyone talks that Marcellus Shale natural gas production means a bonanza to the greater region for everything from real estate to car sales, that isn’t the case for domestic pipe producers. At a time when American pipe producers should be raking in hefty profits, imports are instead bleeding them dry.

JMC’s Energex Tube division, which produces products for gas drilling, has been taking its lumps along with everyone else.

“Brutal, brutal,’’ Zekelman said in describing the current natural gas pipe market. “It’s very frustrating. They (foreign producers) are literally stealing American jobs away.’’

Producers in China, South Korea, Turkey and Vietnam constantly find ways to circumvent American trade laws by having their products slightly altered elsewhere and then having them delivered to American shores as an entirely new and different product, Zekelman said.

Even worse, he said, they just dump products here below the cost of what they produced it for. American customs officials are so overwhelmed they can’t catch them all.

“What I’m asking for is to enforce the trade laws that are on the books,’’ Zekelman said. “Just to have the Korean imports taken care of, which is three million tons of tubing imports a year, would change the landscape.’’

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