Return to Temporary Executives July 25, 2005 Putting the Pedal to the Metal in Philipsburg, Pa. Jul. 24--PHILIPSBURG --When Sinterstahl comes to town, it makes its presence known. Quickly. A rapid-fire building project brought the German-based powdered metals manufacturer to the region in the spring of 2003, in a move to corner the American market. By day 100, the first automotive component parts were rolling off the conveyor line. "With that, we created our existence and it's been steady growth ever since," said Rocco Petrilli, Sinterstahl president and CEO. "Strategically, we don't enter a market unless you can be No. 1 or 2. The only way you get to No. 1 is by growth." The Philipsburg facility has seen its share of that in just two short years. The company has poured more than $15 million into the facility, including a $4 million expansion that will be completed in October. There are 54 employees on the roster now, and the company plans to ratchet production of automotive component parts up to 4.5 million per month, an increase of 2 million per month. "It's really all about growth," Petrilli said. "If you don't grow in our market, you die." Just three components are manufactured at the facility: the rod guide, pistons and a base valve. All are pressed from powder by machines in one stroke. "And we make a lot of them," Petrilli said, smiling. "We're really the only technology that can make them economically." Further diversification would just hurt the company, he said. Powdered metals is a concept often overlooked and misunderstood, even though those products touch most people's lives regularly. Today, powdered metals make up 35 percent to 40 percent of components in every vehicle, a sharp jump from 10 percent to 12 percent 20 years ago. The process takes iron-based metals that have been ground down to a fine powder formula. Those metals are pressed into shape and "sintered" in a furnace to capture their permanent form, a change from the days of melting pieces and pouring them into a mold. The production process is mesmerizing inside the company's production facility. Powdered metal pours through a piping system near the ceiling into a press, which churns out "green parts" at a rate of 24 per minute. Piping hot, these compressed parts travel along a conveyor belt into the sintering furnace, which solidifies them in 2,050-degree heat. A total of 10,000 pistons can be created from one ton of powdered metal. The company uses approximately 250 tons of the metals per month to make 2.5 million parts. The current expansion will increase that to 450 tons of powdered metals per month. Products are marketed to national companies producing shock absorbers, power trains and racing valves for Formula One. "The next step may be we find our way into NASCAR," Petrilli said. "That's more of a pie in the sky dream. ... You have to dream. Without that entrepreneurial spirit you don't do things successfully." Sinterstahl, an offshoot of Austrian parent company Plansee, continues to expand its grasp on the powdered-metals market through mergers and acquisitions. In January, the company acquired the manufacturing facility Federal-Mogul in Dayton, Ohio. The company makes sintered power-train products. It also signed a letter of intent with Mitsubishi Materials Corp. to merge relevant powdered-metal business activities. Petrilli said it should result in $450 million in annual sales and position the products across North America, Europe and the Far East. Five years ago, powdered metals was a foreign concept to the Moshannon Valley region, said Stan LaFuria, executive director of the Moshannon Valley Economic Development Partnership. Now, two powdered-metals companies -- the second is Advanced Powder Products -- are located there. It's inspired the partnership to pursue a powdered-metals industry cluster in the Moshannon Valley region, aided by a small grant from the Ben Franklin Partnership Program. "The old saying 'It can't hurt to try,' and 'Nothing ventured, nothing gained' apply here," LaFuria said. "It will take time, but this initiative will bear fruit in the future." Word of the initiative is spreading via a new marketing brochure. Two powdered-metals businesses, based in Florida and New York, have been in contact with the partnership recently, he said. He said the key to economic recovery is diversification, which Philipsburg is working toward with a myriad of manufacturers rather than one or two large ones. "The powdered-metals industry cluster is very dependent upon the automotive industry, so there could be some trouble ahead with the slow auto industry," LaFuria said. "But again, we have to try. We now have a track record and we should try to capitalize on that success." Location has proven key, Petrilli said. Initially, it was thought that Sinterstahl would take advantage of Elk County and its role as a hub for powdered metals in the state, and recruit there to find experienced workers. In the end, however, very few employees have been hired from the Elk County region. Local workers have made Sinterstahl a success. "If you make unrealistic expectations of good people, they usually deliver," Petrilli said. "It's truly the team we've put together ... a collection of overachievers." ----- To see more of the Centre Daily Times, or to subscribe to the newspaper, go to http://www.centredaily.com. Copyright (c) 2005, The Centre Daily Times, State College, Pa. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com. 5711, Source: Centre Daily Times (State College, Pa.)