The most common metal on earth and renowned for its versatility, aluminum is becoming evermore popular, with applications from 3D printing to electricity transmission.
In 2019, in the face of market turbulence and challenging trade tariffs, Taiwanese aluminum and stainless steel distributor Ta Chen Stainless Pipe Co. chose to invest in US aluminum manufacturing. Its acquisition of a metal production facility in the city of Texarkana marked the company’s transition from distributor to one of the largest stainless steel and aluminum product manufacturers in the country.
With a reputation for quality and a highly skilled legacy workforce already in place, the Texarkana facility is on track to become the largest of its kind. Investment continues to transform the plant into a hub of aluminum manufacturing with plans to lead the market in safety, efficiency and quality, and which represents Texarkana on the national and global stage.
Seizing the moment
Ta Chen International is the US branch of Taiwanese manufacturer Ta Chen Stainless Pipe Co., founded in 1986. In the US, the company has a 30-year history as a leading master distributor of stainless steel pipes, valves and fittings, coils, sheets, long products, tubes and PVFs. In 2018 and 2019, it dedicated more than $600m in new equity for acquisitions and expansion.
With 11 warehouse and distribution locations already in the US, Ta Chen International has now invested in US metal production capacity. A key part of this strategy was the acquisition of an idled aluminum coil manufacturing facility constructed in 1986, previously owned by Arconic. Ta Chen International bought the plant in 2018 and made plans to restore it, with the vision to become the largest and most committed fully integrated common alloy aluminum rolling mill in North America.
At the time of the acquisition, the market was facing a wide range of challenges, including US-China tariffs, pricing, supply chain and recruitment issues, along with global pricing fluctuations. In 2019, an import surge for aluminum flat-rolled products damaged the domestic market.
In the midst of this landscape, Ta Chen International remained one of the biggest investors in US manufacturing, having identified the opportunity to push forward its ambitions. This was the company’s first foray into US manufacturing and represented the company’s evolution from import master distributor to leading product manufacturer.
The facility at Texakarna
The facility at Texarkana offered 900,000ft2 of fully integrated casting, hot mill, cold mill and finishing operational capacity, previously employed to manufacture aluminum sheets and plates for the automotive, commercial transportation and industrial markets. In 2019, Ta Chen International began its task of restoring the plant to full operations.
The total capital investment in software and hardware was projected at $416.5m, of which $300m was dedicated to property and equipment. Restorations included software upgrades, DC to AC motor conversion and control panel upgrades, with specialist equipment sourced from around the world. One improvement involved the implementation of energy-efficient LED lighting, for which the plant received a $95,000 incentive from Southwestern Electric Power, with the aim of improving operations, productivity and the working environment.
The new facility was named Texarkana Aluminum by president and CEO Johnny Hsieh. Aluminum made in Texarkana has global prestige, earned through the region’s dedicated workforce, cutting-edge education and training programmes, world-class transportation infrastructure and strategic location, meaning the product can be transported to anywhere in the US via highway or rail.
“Aluminum made in Texarkana is famous for being consistantly high-quality and we wanted to ensure that name recognition and credibility was associated with our product,” stated Hsieh. “The aluminum industry has a strong legacy of success in the region and we were confident that locating here was the best choice for our company.”
Thanks to the existing legacy labour force and the incumbent reputation of the plant’s manufactured products, Ta Chen International hit the ground running in Texarkana. The area’s low turnover rates, union rates and cost of living compared with the national averages offer a tremendous competitive advantage. The company hired skilled workers, experienced managers and supervisors, and offered extensive training. It also sponsored internships and scholarships at all local Texarkana colleges, creating a pipeline of new talent. These colleges include Texarkana College, University of Arkansas Hope-Texarkana and Texas A&M University-Texarkana.
The project to develop the facility consists of three milestones. The first, a complete restart of the cold rolling mill, hot rolling mill and casting operations, was completed in 2020. Milestone 2 involves capacity expansion through organic growth and acquisitions and will be developed during 2021 through 2022. Beyond 2022, the third milestone is to evaluate the mill’s expansion into the specialty aluminum foil market.
As US domestic mills transition away from common alloys as their core offering, Texarkana Aluminum will remain the only aluminum rolling mill 100% committed to common alloys.
A shining future
Officially unveiled in 2019 and fully restored in 2020, the aluminum plant has already come a long way and has earned the reputation as one of the best companies to work for in east Texas. The plant has also been recognised by AR-TX Regional Economic Development Inc. (REDI) and the Texarkana Chamber as a main player contributing to local industrial infrastructure.
Now, with the aluminum market booming and the plant already at full capacity with orders booked two years out, the company continues to look towards the future. The parent company is so pleased with the talented workforce and quality of product being produced that it is already eyeing an expansion project. With incentive help from Bowie County, City of Nash, Texarkana College and Texarkana Independent School District, REDI is working to make this expansion a reality.
As Texarkana Aluminum goes from strength to strength and pursues its next milestones, its potential to boost both the market and the region is huge. By 2024, the company anticipates that more than 500 skilled personnel will be hired and a total of $500m will be invested in the Texarkana region. The region’s robust workforce and growing talent pipeline, as well as support from partnerships on all levels of economic development, ensures Texarkana will continue to keep its reputation as a global leader in aluminum manufacturing.