Metal Coating, Engraving & Heat Treating

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 4,830 metal finishing companies in the US provide finishing services for manufacturing and construction customers. Major revenue categories include metal coating and engraving; electroplating, plating, polishing, anodizing, and coloring; and metal heat treating. Companies provide finishing services for customer-supplied metal goods and may sell finished metal goods. Some companies offer finishing services for alternative materials, such as plastics and composites.

Waste and Regulation

The metal finishing industry is highly regulated because processes often involve dangerous chemicals and the generation of hazardous waste.

Captive Finishing

Companies may compete with manufacturers that opt for in-house metal finishing activities instead of outsourcing to a third party (“captive finishing”).

Industry size & Structure

The average metal coating, engraving, and heat treating service provider works out of a single location, employs about 26-27 workers, and generates $6-7 million annually.

    • The metal coating, engraving, and heat treating services industry consists of about 4,830 firms that employ about 130,000 workers and generate about $29.5 billion annually.
    • Most categories of the industry are concentrated, with the top 50 companies accounting for about 59-66% of industry revenue. The electroplating, plating, polishing, anodizing, and coloring sector is less concentrated, with the top 50 companies accounting for 34% of sector revenue.
    • Companies that specialize in metal coating and engraving account for about 47% of firms and 54% of industry revenue. Companies that specialize in electroplating, plating, polishing, anodizing, and coloring account for about 41% of firms and 27% of industry revenue. Companies that specialize in metal heat treating account for 12% of firms and 19% of industry revenue.
    • Large companies include Material Sciences Corporation, Metal Improvement Company (Curtiss-Wright Surface Technologies), and Bodycote. Some large companies are owned by foreign companies or have international operations.
                                      Industry Forecast
                                      Metal Coating, Engraving & Heat Treating Industry Growth
                                      Source: Vertical IQ and Inforum

                                      Recent Developments

                                      Apr 21, 2024 - Prices and Wages Rising
                                      • Producer prices for metal coating, engraving, and heat treating firms continue their steep and steady climb, increasing by 7% in March compared to a year ago and 31% since the end of 2020, according to the latest US Bureau of Labor Statistics data. Meanwhile, employment by the industry was relatively unchanged in January versus the year-earlier period, while average industry wages increased 2.3% over the same period to $22.53 per hour, a new high for the industry.
                                      • According to newly released Census Bureau figures, US capital expenditures for robotic equipment totaled $12,960 million (not statistically different than 2021) and accounted for 1.1% of total equipment expenditures in 2022. The manufacturing sector was the largest investor, accounting for more than half (56.2%) of all robotic equipment expenditures – nearly $7.3 billion that year. Amid a stubborn labor shortage, manufacturers rely increasingly on automation, including robots, for some tasks to achieve greater productivity. Metal finishing firms use robots for various applications, including robotic buffing, deburring, grinding, and polishing.
                                      • White is losing ground to black as the most popular color for light passenger cars, Products Finishing (PF) reported in February. Trend data from the 2023 BASF Color Report for Automotive OEM Coatings shows black surging in popularity at the expense of white’s market share. On a regional basis, North America shows a growing preference for lighter shades of silver over darker grays, while in Europe, the Middle East, and Africa, the trend leans toward darker shades, according to the BASF Color Report. Meanwhile, chromatic colors (including blue, red, brown, and beige) have remained stable, with no significant changes in their market share (19%). In 2023, North America had the highest share of red cars compared to other regions. However, blue held on to first place as the most popular chromatic color in North America.
                                      • AI-powered software can reduce defects and overspray and improve powder consumption — helping to reduce costs, avoid rework, and save time and energy, Products Finishing (PF) reports. Software developed by AkzoNobel’s powder coatings business and Switzerland’s CoatingAI uses artificial intelligence to help customers improve the application process and reduce their carbon footprint. The AI-based software called Flightpath has been in development for two years and an exclusivity agreement has been signed by both parties, according to PF. Flightpath software enables customers to optimize equipment settings, such as gun motion, and achieve more uniform, consistent coverage with fewer flaws — based on AI-powered recommendations. The software doesn’t require complex integration, and as conditions change, it continually adapts its recommended parameters.
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