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Outokumpu Heatcraft USA employs approximately 1,300

Grenada plants, people supplying HVAC coils to the world

Grenada — If you have a recreational vehicle, chances are you are keeping cool during summer vacation with air conditioning equipment containing coils manufactured at Outokumpu Heatcraft USA, which is one of the state’s top 10 largest manufacturing employers with a workforce of about 1,300 people at three plants in Grenada.

“We probably supply the coils for 95% to 98% of RV air conditioners in the U.S.,” says Jim Laycock, vice president and general manager, Outokumpu Heatcraft USA.

But coils for RV air conditioners only scratch the surface of the impact of this company. Outokumpu Heatcraft is the world’s largest manufacturer and supplier of tube and plate fin-type coils for the HVAC industry.

“The company manufactures commercial/industrial coils for applications that include low- and high-pressure steam, fluid heating and cooling and refrigerant systems,” Laycock said. “Our coils are considered an industry standard, with many engineering firms and contractors writing their specifications around them.”

Of the three plants, the OEM (original equipment manufacturer) plant supplies coils for customers making equipment sold to consumers or other businesses. The second plant makes replacement coils, with orders usually filled within five to 10 days.

The company also just opened up a new facility. Heatcraft took over an existing building vacated by Peneco, and installed about $1.5 million worth of equipment to manufacture a new product, all-aluminum microchannel coils. These are basically the same kind of coil used in automobile air conditioners, only larger.

The expansion is noteworthy in light of the decline in the number of manufacturing jobs in the state in recent years. Laycock said the availability of an existing building was a major positive factor in opening the new highly mechanized operation. About 30 new employees were hired for the expansion.

Normally Heatcraft uses hand braising, which is similar to welding, to make the coils. The new plant is more mechanized, and coils are furnace braised.

Heatcraft, which celebrated its 50th anniversary operating in Grenada this past year, also has a plant in Mexico. But Laycock said the excellent labor force skill base built up in Grenada over the past 50 years isn’t easily transferred offshore. The plant in Mexico handles simpler operations, while the higher-skilled workforce in Grenada does more complicated products. Partly owned by a Finnish company, Heatcraft also has sister facilities located elsewhere in the world.

Heatcraft is a good example of a company that adapted to a changing market while also instituting lean manufacturing techniques in order to maximize profitability. Ten to 15 years ago the company supplied a lot of major residential air conditioner manufacturers with coils. But most of those companies vertically integrated, and started making their own coils.

“The customers we have today tend to be in non-residential segments of the market,” Laycock said. “We just focused on the rest of our business, refrigeration transportation, commercial air handlers, drink dispensers, walk-in coolers and RV air conditioners.”

New minimum efficiency standards for residential HVAC equipment are being required by the government starting next year. Laycock said that won’t directly affect the company much now, because it doesn’t have many customers in residential air conditioning. The indirect impact is that the size of coils in residential air conditioning will probably get larger, using more raw materials.

“We are all buying from the same copper tin and aluminum fin stock pool,” Laycock said. “Therefore, the availability and cost of those materials will be impacted. That is how it will affect us.”

Visitors to the Heatcraft plants in Grenada would most likely be impressed by the variety of different products manufactured. The plant has a copper tube mill, and makes in the range of 10,000 heat exchangers per day. They can range in size from one you can hold in your hand to one 300 inches long, and can be used for a variety of purposes ranging from water coolers, freezer sections in store, over-the-road and off-road refrigeration and the heating and cooling of large commercial buildings. There are many different styles and sizes, all custom made.

The company’s lean manufacturing operations are also of interest. “If you saw the plants a few years ago compared to today, you would be amazed at the improvements,” said Billie F. Dover, marketing manager for Heatcraft. “The product being manufactured starts on one side of the building and goes to the other. After completion, it is shipped out. Lean manufacturer began to be instituted three or four years ago. That has improved efficiency, quality and long-term job prospects for people who work at the plant.”

Another innovation is that the company in-sourced its cardboard box operation. The cardboard boxes are manufactured inside their building by a subcontractor. That has been efficient, while also saving money.

Regarding the company’s impact on local economic development, it is the largest employer in Grenada County, by far. “The company started out here 50 years ago last year,” said Phillip Heard, executive director, Grenada County Chamber of Commerce. “That is phenomenal.
We certainly appreciate them here. I think it is important to mention in addition to the dollars they have added to the community and surrounding area through payroll, they have also contributed to many positive initiatives we have had in Grenada.”

In 1999, Heatcraft was the catalyst for an initiative to get a $4.5-million company industrial training center built in Grenada. In 2000 the Industrial Training Center was opened, and for the past three years that center has trained an average of 5,000 people per year. In addition to being very helpful for existing industries, Heard said the center is a tremendous incentive for new industries considering the area.

The Finnish company Outokumpu bought out 55% of Heatcraft from Lennox about 2 1/2 years ago. For more information about the company, see the Web site www.heatcraft.com.

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

About Becky Gillette

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