Precision Castparts Corp is the market leader in manufacturing large, complex structural investment castings, airfoil castings, forged components, aerostructures and highly engineered, critical fasteners for aerospace applications.
In addition, it is the leading producer of airfoil castings for the industrial gas turbine market.
it manufactures extruded seamless pipe, fittings, and forging products for power generation and oil & gas applications; commercial and military airframe aerostructures; and titanium and superalloys for the casting and forging industries.
PCC’s subsidiaries include investment casting products company, forging products company and airframe products company.
Investment Casting Products Company produces world advanced high-quality and complex investment castings for aircraft engines, industrial gas turbines, airframes and other applications (including investment casting parts with the largest diameter in the world).
Forging Products Company produces complex forgings, high-performance nickel base alloys and superalloys for aerospace, power generation and general industries. It is the world’s largest producer of high-performance nickel base alloys with the most complete varieties, and has the world’s advanced titanium and superalloy waste recycling management system. It has the world’s advanced R&D equipment and high quality forging ability.
Airframe Products manufactures engineering fasteners, fastener systems, metal components and assembly components for aerospace, transportation, power generation and general industrial markets.
Main markets and customers
PCC’s leading market is the aerospace market.
Boeing, Airbus, General Electric Aviation Group, Goodrich, Pratt&Whitney Group, Rolls Royce, etc. are its main customers.
In the field of energy market, the company’s main customers are Alstom, China National Power Corporation, Gujarat, India Coastal, General Electric Energy Group, Siemens, Solar, etc.
In addition, the production and operation of the Company also involve in the general industrial market, and its main customers are AM Castle&Co. of the United States, BAE Systems of the United Kingdom, International Paper of the United States, and Smith&Nephew of the United Kingdom.
Recent development trend
In the past, precision casting companies mainly focused on investment castings, forgings and fasteners, but now they are facing machining and parts manufacturing. Since 2010, the company has acquired a number of processing and manufacturing plants to actively integrate its aircraft structural parts department in the aerospace market.
At present, most aviation fasteners on the market are aluminum products. With the increase of composite materials for aircraft fuselage, titanium, as a material with excellent compatibility with composite materials, will be the material with the largest growth rate in the aviation fastener industry in the future. The company’s acquisition trends in recent years mainly include:
a) In June 2011, Unison Engine Components, or Tru Form, a manufacturer of aviation grade forgings from General Electric, was acquired;
b) In June 2011, it acquired the welding covering material business of pipe fittings and container products of KLAD Manufacturing Company;
c) In June 2011, it acquired the Central Industrial Corporation. Central Industrial Company produces aluminum and hard metal fuselage parts and assemblies;
d) In July 2011, it acquired the RolLMEt department of Rockwell Collins. Rockwell Collins is a leader in the industry of avionics and communication products that provide extensive applications for government departments and commercial customers, and has purchased the thin tube product business of Rollmet;
e) In August 2011, it acquired Pratt&Whitney International Group for US $900 million. Pumei International Group is a supplier of composite materials, aluminum and titanium processing materials and assemblies for aviation;
f) In April 2012, it acquired the American pipe manufacturer Giry;
g) In May 2012, acquired Dixon Testing Company and Aircraft Heat Treatment Company;
h) In July 2012, Klune Industries was acquired. Klune Industries is a manufacturer of aluminum, nickel, titanium and steel aircraft structures;
i) In July 2012, three manufacturing plants were acquired from H é roux Devtek for US $300 million to further enter the aircraft component manufacturing market. The three manufacturing plants are located in Olington, USA, Dover, Canada and Kelledaro, Mexico.
j) On December 20, 2012, TIMET was acquired in cash at $16.5 per share, with a transaction amount of about $2.9 billion.
k) In June 2013, Permaswage SAS, a French manufacturer of forged titanium, nickel alloy and stainless steel aircraft fluid fittings, was acquired for US $600 million.
l) In July 2013, it acquired Exacta Aerospace, an aircraft parts manufacturer located in Kansas, USA.
……
Influence of PCC on Titanium Industry
PCC’s acquisition of TIMET with US $2.9 billion is the largest step towards the merger trend so far. This merger is the first stage of transforming the once independent titanium rolling mill into an aviation industrial chain under an independent parent company.
The acquisition activity made PCC’s titanium melting products and rolled products reach 11.6 million pounds in the third quarter of 2012, accounting for 47% (24.6 million pounds) of the total titanium products of the three major US manufacturers (including ATI, RTI and TIMET).
According to the data of the US Securities and Exchange Commission, although many of PCC’s products are supplied to Boeing, PCC is TIMET’s largest customer. In 2011, the trade sales of the two companies accounted for 16% of TIMET’s total sales.
The largest customer of PCC in fiscal year 2012 is General Electric Company. The acquisition made TIMET and Wyman Gordon belong to the same parent company.
Wyman Gordon is the largest manufacturer of aviation forgings in the United States and one of TIMET’s main customers.
PCC said that TIMET’s smelting technology and PCC’s forging technology and conversion assets are complementary strategies. In addition to forging technology, PCC is also a major manufacturer of castings and fasteners. Recently, it mainly processes titanium parts for aviation.
The acquisition enables PCC to have internal titanium smelting capacity, which is used to supplement the nickel and cobalt alloy production of PCC’s special metal companies, and promotes the further integration of titanium, forging industries and original equipment suppliers of airframe and engine with the supply chain.
PCC’s latest acquisition activities still focus on its core products, mainly including aircraft fuselage related products, including fasteners.
In July 2013, PCC said that it would increase the capacity of titanium fastener raw materials for its manufacturers. PCC manufacturer is one of the three fastener clusters in the aviation industry.
During PCC’s acquisition of TIMET, other major titanium manufacturers in the United States were also implementing strategic adjustments to their own development goals.
After the acquisition of TIMET, RTI will most likely become an independent titanium rolling manufacturer. RTI did not comment on this, but in early 2012, the company announced that it would further become a more complete titanium manufacturer.
Through unprecedented acquisition activities, RTI vigorously developed into the downstream aviation, national defense and medical equipment markets: in 2004, it acquired Claro Precision Company of Canada with US $100 million;
In 2011, it acquired the molding department of Aeromet International Public Company of the United Kingdom, which is now renamed RTI Advanced Molding Company;
In February 2012, the largest acquisition activity in RTI’s history was realized, namely, the acquisition of Remmele Engeering with US $182 million.
In 2011, ATI acquired Ladish with US $778 million, successfully developing to the downstream of the supply chain. ATI has an in-house supply of titanium and nickel alloys.
In September 2012, ATI believed that the entire titanium industry needs suppliers with a more complete industrial chain, that is, suppliers with smelting capacity covering all product forms from sponge titanium to those who can effectively control their product quality, productivity and delivery level.
The acquisition of TIMET may prompt customers of other forging plants to seek new titanium resources. However, most of the titanium materials produced by the three major rolling material manufacturers come from long-term supply contracts signed with the original equipment manufacturers of engines or airframes, some of which are valid for several years. In 2011, 64% of TIMET’s sales came from long-term contracts.
PCC’s acquisition of TIMET has clearly defined a merger trend that has been clear since the past few years, and this trend will continue. Now, when an aviation manufacturer decides to establish a supply chain within its company, it will not be considered as a special event. Previously, the industry was mainly composed of independent rolling mills.
For the acquisition of TIMET, the marketing department did not show too much concern, and most service centers did not obviously feel fear of losing market share. A titanium dealer said that the rolling mill has begun to build inventory, and it is estimated that PCC will not be interested in building inventory. Stock establishment is usually completed by rolling stock dealers.
In January 2016, Berkshire Hathaway officially launched Precision Castparts Corp, PCC with US $37.2 billion…