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Past, Present and Future

April 21, 2010
A lot has changed in the past two years, but Demshe Forge has the opportunity now to convert decades of experience into new rewards.
One of the two 12,000-lb hammers recently installed by Demshe Forge, with a 500-ton press, as part of its new strategy to supply large forgings to oiland- gas customers, with short lead times and ISO 9000 quality controls.

Every classic business success story is the same: someone has a vision, and through hard work and good fortune the vision is realized. Something like that is happening in the forging industry, but real life demands more than vision. One has to work hard, gain understanding, endure setbacks, and demonstrate good judgment in order to find the opportunities that convert a vision into business success.

Forging isn’t a particularly visionary industry: it involves force and accuracy, not nuance. In 1988, Roger Demers and a partner started DemShe Products Inc. on the basis of a single contract to produce tank track components. They located a 12-acre parcel in Port Robinson, Ontario, that was available to be developed for a forging operation, “and the rest was history,” according to Roger’s son, Patrick Demers.

Over the next decade or so Dem- She Products grew on the strength of automotive industry contracts. Roger Demers directed the purchase and installation of all forging lines and support equipment. Though he was president of the company through 2006, he is a hammer smith by trade and personally forged the first products. Over 19 years he supervised training for all employees.

The company that started out as a board hammer shop grew into a state-of-the-art computerized hydraulic hammer forging operation with the latest induction-heating technology. DemShe Products’ strategy was to remain small enough to ensure reliable customer service and product quality, though its good reputation grew along with its sales volumes, which rose from just $300,000 to $15 million per year.

Patrick Demers enters the story as a15-year-old high school student, and part-time janitor. He learned to operate a shear, a press, and then a hammer, and he spent 10 years earning a post-secondary degree in off hours. “As I progressed, so did the responsibility,” he recalls now. With experience gained, he became a supervisor and then the production manager, and then finally the plant manager.

The younger Demers’ potential was growing, but the world was changing around DemShe Products. Roger Demers explains now that the company was able to compete against the other 300 or so forging operations in the automotive supply chain, but the advantages began to shift to low-cost operations producing forgings offshore. It became harder to fight the strain of the high-value Canadian dollar, which along with steel surcharges could not be passed on to automotive customers without sacrificing the orders. Then, demand from the automotive OEMs began to wane, and with revenues slowing cash became scarce. By November 2007 DemShe Products was closed, and all the equipment was liquidated.

That may have been the end of the story, except that the Port Robinson site presented an opportunity for another business with a vision — and that represented a new opportunity for Roger and Patrick Demers.

The fact is that there are not too many sites available to start a new forging operation, but a new investor recognized that in the Canadian oil-and-gas industry there existed a need for a specialized supplier of forgings closer to home.

Oil and gas production is booming worldwide, especially in Canada, and this investor had a plan to provide customers with superior forged products, on shorter lead times, and at competitive prices. And, the former DemShe site was available.

In May 2008, the plant was bought at auction. It was an ideal match, says Patrick Demers, once again the plant manager, citing the new investor’s desire to build a strong customer base in the oil-and-gas sector, and to capitalize on the innate understanding of the production processes and equipment needed to execute the plan.

This 12,000-lb Chambersburg hammer, supported by a 7,000-lb/hr gas furnace, and 600-ton trim press, is among the production equipment housed in a new building adjacent to the original plant.

Today’s Demshe Forge Inc. is a one-stop shop for die sinking, forging, heat treating, and production machining. While the former DemShe Products was one among hundreds of suppliers worldwide competing for a share of a mature market, the new operation has a solid position in an expanding global industry.

Though the location and expertise are unchanged, these may be the only similarities to the former operation. “From November 1988 to November 2007, DemShe Products’ customer base involved high-volume, small-margin production of forgings,” Patrick Demers explains. “Today, our customer base is the opposite, and this is made possible because of the size of the equipment we have now.”

Which is a concise way to describe the significant changes at the Port Robinson plant. The existing facility was outfitted with new equipment to produce a range of smaller forgings. This includes:

• A 1,000-lb. Chambersburg double acting hammer, with a 300-Kw induction heating line, a No.4 reducer roll, and a 100-ton trim press.

• A KHU 250 Lasco hammer, with 600-Kw induction heating line, a No.4 reducer roll, and a 150-ton trim press.

• A 5,000-lb Chambersburg double acting hammer, with a 500-Kw induction heating line, a 2,000-lb./hr slot gas furnace, a No.6 reducer roll, and a 175-ton trim press.

For these lines there are a variety of finishing systems, including a shear, cold saw, and two band saws; a 34-ft2 Pangborn shot-blast chamber and a Goff hanger cleaning unit; four spindle CNC die sinking mills; and a CNC machining center.

But, the new business strategy included a decision to target a smaller segment of the forging market, “namely forgings in the range of 30 to 450 lbs.,” Roger Demers explains. “With fewer competitors we position ourselves as a source for these large parts. Coupled with our smaller forge shop, we now can supply one to hundreds of thousand parts weighing from ounces to hundreds of pounds.”

Compare this with the former operation’s products, which ranged from just a few ounces to 25 lbs., and largely for the automotive market. Now, forgings are produced for the oil-and-gas industry, as mentioned, but also for railway equipment, safety harness and shackle forgings, and truck and trailer components. Whereas the former operation’s carbon and alloy steel products ranged from ounces to 25 lbs., today’s wider selection is offered in carbon steel and numerous more exotic alloys.

The larger products required larger equipment, so a new, 8,000-ft2 building has been built adjacent to the original plant to house two full production lines. Two hammers have been acquired to produce the larger forgings:

• A 12,000-lb. Chambersburg double acting hammer, supported by a 7,000-lb/hr gas furnace, and 600-ton trim press;

• A 12,000-lb. Chambersburg double acting hammer, backed by a 2,000- lb/hr gas furnace, and a 500-ton press; as well as ,

• A heat-treating oven, with a quenching tank.

The availability of this equipment is more evidence of the opportunities presented by changes in the industrial landscape, and there is more expansion to come. Demshe Forge plans to add another 8,000-ft2 of production space to house a 20,000-lb hammer press.

Some aspects of the new Demshe Forge business provide a reliable link to the past. Most of the company’s longtime suppliers are in place again, and Roger Demers says the new company is satisfying new and old customers alike, thanks to its full service capabilities, and quality and cost controls. “With very tight controls, we are able to minimize our downtime, have total control over the quality output, and meet our customer needs with ontime delivery,” he observes.

In other cases, improvements have been effective at advancing the new business. “Our first priority was to get our ISO 9000 certification, Roger adds, “which was successfully achieved immediately, thanks to the dedication of our quality manager and the plant’s dedicated employees.”

Of course, experience counts, too. Plant manager Patrick Demers can rely on the understanding he’s gained over nearly two decades to oversee the company’s process technology and future development.

What’s different today is the potential for growth afforded by sound financial backing, and for greater reward from a new base of customers in a dynamic industry. They provide the opportunity to forge a classic business success story.