Rainy weather brought to Beaumont, TX, by a tropical storm hardly dampened the spirits of managers, employees, and guests of Gulf Coast Machine and Supply, who gathered for an open house on July 23. The event marked the startup of a new press, but it also celebrated a successful financing arrangement that will ensure the company’s future.
Known as Gulfco, the company soon will celebrate its 90th year in operation. From modest beginnings as a small machine shop in 1919, Gulfco has grown into one of the largest and most productive forging facilities in the Southwest. It manufactures large forgings for use in the oil and gas, petrochemical, and wind energy markets.
Gulfco does much of its business in the Gulf Coast region, where oil and gas companies are increasing the scale of their decades-long exploration for and exploitation of fossil-fuel deposits.
Gulfco’s products include large rolled-ring and opendie forgings. Gulfco also heat treats and rough machines most of its products, which are sold to customers who finish machine them into component parts for use in sub-sea pipelines, refineries, oil rigs, petrochemical plants, heat exchangers, and a variety of general industrial applications.
Gulf Coast Machine and Supply’s solid standing as a supplier to the oil and gas and petrochemical industries at tracted the interest of a major investor. Earlier this year, Industrial Opportunity Partners L.L.C. announced that it is providing funding for a recapitalization of Gulfco. The private-equity firm reportedly had been eyeing the Texas forging company for about a year, aiming to capitalize on the domestic petroleum industry’s scramble to find new sources of oil and gas.
Kenneth Tallering, senior managing director, said IOP worked to develop relationships with the selling owners, George “Tommy” LeBlanc, the Gulfco’s CEO, and his son, David LeBlanc. The deal allows the LeBlancs to cash out some of their ownership stakes while maintaining an interest, Tallering said.
The LeBlancs are second- and thirdgeneration family members who own and manage Gulfco. They will continue to manage the company with the addition of Nicholas Galambos, operating principal of IOP, in the new position of chairman. Galambos, who has significant experience in forging and similar businesses, is a member of IOP’s board of operating principals, which is comprised of experienced executives who provide leadership to businesses in which IOP invests.
Tommy LeBlanc has been involved in the forging industry for over 50 years, and one of the highlights of the open house was a recognition of that achievement by Charles H. “Charlie” Hageman, executive vice president of the Forging Industry Assn. (Gulfco is a long-time FIA member company.)
Adding the “new” press
The press now operating at Gulfco was thoroughly modified and rebuilt to meet the company’s current needs. The components of a United press had been purchased in February 2000. According to Eddie Gonzales, superintendent of engineering, the machine originally was a steam press. In the process of rebuilding it, Gulfco converted it to hydraulic power, with operating pressures of 5,300 psi continuous and 5,800 psi intermittent.
The rebuilding project began in earnest in February 2007 with a project team consisting of Nickey Felsher, general manager; Eddie Gonzales; Louis Adolph, plant engineer; Lucy Morgan, CAD operator; and Johnnie Daws, maintenance supervisor. The project was completed in May 2008.
The 3,500-ton press offers the following operating clearances: Stroke, 74 in.; maximum vertical clearance without spacers, 123 in.; vertical clearance with spacers, 75 in.; front-to-back clearance, 29 in.; left-to-right clearance, 117 in.; and diametrical clearance (for forging a disk), 117 in.
To accommodate the headroom requirements of the new press, part of the roof of the building was raised 30 feet. Then a new building, 1,540 ft2 under roof, was constructed to house the press’s hydraulic system.
The hydraulic room was the latest expansion to the floor space occupied by Gulfco. Gonzales summarizes the expansion this way: “When Gulfco moved from (a former plant in) Beaumont to the current location in 1965, the company started with 80,545 ft2 under roof. We have since added an additional 110,112 ft2 to reach our current size of 190,657 ft2 under roof.”
More about Gulfco
As noted, Gulf Coast Machine & Supply Co. was organized as a machine shop in 1919. During its early years, the company manufactured oil-field and marine equipment and provided maintenance and repair services for oil companies. Since then, it has grown into one of the largest and most productive forging facilities in the Southwest.
How did Gulfco reach its leadership position in the forging industry? Its explanation reveals some of its operating principles: “The answer is found in a philosophy of customer service. Because of a variety of applications for forgings, Gulfco approaches each product on an individual basis. There is no ‘typical’ forging customer. Gulfco considers the individual needs of each of our customers and produces forgings to the exact customer requirements and specifications.
“This relationship works for us — and for the customer,” the statement continues, “because we at Gulfco sincerely believe in quality and service. That is why we pride ourselves on our record of providing quality products at a competitive price and delivered on or before the required delivery date.
Gulfco also points out, “Although our main business is forging, we also maintain a large and well-equipped machining facility to provide semi-finished and finished machined products. Through the years, we’ve developed our machine tool facility and built a strong labor force of highly skilled craftsmen.”
Forging and ring rolling
Gulfco is equipped to produce open-die, rolled-ring, and die forgings. Forgings produced may range up to 36,000 lb., depending on the product size and shape. These may be shaped components, discs, bushings, shafts, etc.
A large part of Gulfco’s output consists of seamless rolledring forgings to meet the varied needs of petroleum refineries and other industries. Gulfco is capable of rolling rings up to 132 in. in outside diameter with a length up to 48 in. Its ring mills handle up to 25,000 lb. in forging weight, which allows Gulfco to meet maximum size needs of most customers. Saddle rings are available up to 80 in. in OD and 58 in. in length, weighing up to 36,000 lb. See table for more specific data on capabilities.
Machining and heat treating
With over 50 machine tools, Gulfco is capable of meeting any customer’s machine requirements, and is able to machine up to 138 in. in diameter.
In 1985, after two years of research and study, Gulfco added a state-of-the-art heat-treating plant. This plant enables the company to normalize and anneal its products, as well as liquid quench and temper. With computer-aided historical data on each heat and type of steel, Gulfco is able to select heat-treating temperatures to achieve the properties required by the customer.
Quality assurance and testing
Quality assurance is top priority, according to Gulfco. To ensure forging quality, Gulfco has a complete on-site laboratory for mechanical testing of material prior to forging. Gulfco offers the following testing services: tensile, Charpy impact, corrosion, ultrasonic, magnetic particle, liquid penetrant, metallography, and chemical analysis
Gulfco carries a large inventory of materials in the form of billet steel from 10 to 40 in. square and ingot from 13 to 50 in. round. The company is capable of saw cutting up to 53 in.
With a computer-aided quoting system, Gulfco can offer both quick and accurate quotations. A computer tracking system allows sales representatives to provide the current status of projects to customers.
Major Investor in Gulfco’s Future
In February Industrial Opportunity Partners LLC , Evanston, IL, announced it had made an investment in Gulf Coast Machine and Supply Co., in the form of subordinated debt and preferred equity, and assumed a significant ownership interest in Gulfco.
Kenneth Tallering, senior managing director of IOP, commented, “We are very pleased to support the recapitalization of Gulfco, a company with top-tier customers and a long history of supplying quality forged products. IOP is excited to build on these strengths to continue Gulfco’s growth in the oil and gas and petrochemical markets while also expanding into new markets not presently served by Gulfco.”
Nicholas Galambos, operating principal of IOP, pointed out, “IOP’s investment in Gulfco highlights IOP’s strengths of investing in businesses with strong products and market positions and providing these businesses with resources to grow and improve. With respect to Gulfco, IOP is supporting the installation of a new large forging press and related furnaces in order to increase capacity and improve efficiency to enable it to support its customers growing needs for large forgings.”
Mills & Stowell Investment Bankers, Houston, represented Gulfco and the LeBlanc family in the recapitalization process.