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 5,100 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.

Hazardous Waste and Processes and Government Regulation

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

Customer In-House Capabilities

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 25-26 workers, and generates $5-6 million annually.

    • The metal coating, engraving, and heat treating services industry consists of about 5,100 firms that employ about 129,700 workers and generate about $28 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

                                      Mar 6, 2023 - EVs Equal Opportunity for Finishers
                                      • Designing powertrains for electric vehicles (EVs) is an area ripe for finishing innovation, according to Product Finishing News. While EV powertrains involve roughly 60% fewer components than their gas-powered counterparts, there is a vital need for conducting current and thermal management. Because thermal management in EVs is critical, heatsinks are a huge area of interest for finishing solutions. Also, EV powertrains need to move more current than in traditional powertrains. Finishing solutions for many of the electronics include DBC (direct bonded copper)/AMB (active metal brazing) substrates, heatsinks, lead frames, connectors and busbars. As sales of EVs accelerate, “The finishing opportunities in this space are growing,” said Doug Hughes of MacDermid Enthone Industrial Solutions, a maker of chemicals for surface coating applications adding, “If you’re not pursuing these opportunities, start pursuing them now.”
                                      • While manufacturing activity contracted for the fourth straight month in February, there are signs that factory activity is beginning to stabilize, Reuters reported in March. The Manufacturing PMI (purchasing managers index) registered 47.7% in February, 0.3% higher than the January reading of 47.4%. (A reading below 50 indicates contraction.) "This is the fourth month of slow contraction and continuation of a downward trend that began in June 2022,” said Timothy R. Fiore of the Institute for Supply Management. One of only four manufacturing industries to report growth in February was electrical equipment, appliances & components, a customer industry for metal finishing and surface treatment services.
                                      • US auto sales are expected to rebound this year as a recovery in vehicle production will more than offset the effects of inflation and rising interest rates, the Los Angeles Times reports. After two years of semiconductor shortages and supply chain disruptions that limited production, automakers are ramping up production. The US auto industry is expected to grow by more than 1 million vehicles this year to about 15 million units. By comparison, total sales for 2022 probably were below 14 million units, the lowest level since 2011, when the country was emerging from the depths of the Great Recession. Despite high prices and auto loan rates keeping some consumers out of the new car market, vehicle shortages over the past two years are believed to have kept between 4 million and 7 million consumers from buying, creating plenty of pent up demand to fuel vehicle sales this year.
                                      • The finishing sector could face new wastewater discharge requirements as soon as 2024 under a new rule proposed by the US Environmental Protection Agency. In a major step in the development of a nationwide wastewater discharge rule to control per- and polyfluoroalkyl substances (PFAS) associated with surface finishing operations, the agency in November proposed a formal Information Collection Request (ICR) to collect data from the surface finishing industry for its PFAS Water Discharge Rule. The agency plans to issue a proposed rule with new discharge requirements for the finishing sector by the summer of 2024, Products Finishing (PF) reported in November. In a regulatory alert to its members, the National Association for Surface Finishing (NASF) said the EPA’s PFAS action plan will require more vigilance on behalf of finishing operations.
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