Industry Watch (Web exclusive): Component consolidation

Consolidation visits any industry experiencing a capacity glut, and the machine component’s market is no different. Following several months of discussion, barrel, screw, and nozzle manufacturer Xaloy has acquired screw, barrel, and heat-transfer roll maker New Castle Industries (NCI) for $17 million.

"The move is a result of both Xaloy and NCI management recognizing a long-term shift in the marketplace and is a result of 10 months of discussions," Xaloy Group CEO Walter Cox explained in an e-mail from Olten, Switzerland, home to Xaloy’s European headquarters.

In the deal, Xaloy gained six facilities with 220,000 sq ft of floor space and 241 employees. The move added heat-transfer rolls as well as the ability to make screws that range in length from 7 to 12m. It also brought NCI’s screw design lab and screw design portfolio, but in the face of overcapacity, Cox admitted some changes would be forthcoming.

"Unfortunately, the three-year downturn in our industry has resulted in too much overcapacity in our products, both in the U.S. and globally," Cox says. "We believe the U.S. will never return to the levels seen in the late 1990s through 2000."

Because of this, Cox said the company decided to close the Bimex facility in Wales, WI and move all barrel production to Pulaski, VA. NCI’s satellite facility in Londonberry, NH was closed, and its production was consolidated into Xaloy’s new Seabrook, NH plant. Ten NCI employees were extended offers to join the Seabrook facility after the Londonberry closing. Xaloy also made moves to retain NCI president Tom Doland and several other key executives.