DEMSHE FORGE - Two Forges on One Site
Not far from Niagara Falls, in a Canadian rural setting on a 12-acre site zoned for industry, sit two buildings that comprise Demshe Forge Inc., a producer of steel parts primarily for the oil and gas industry. The traditional “small” forge occupies the site’s original building and processes parts up to 25 pounds. The newer “heavy” forge is in a separate structure and produces heavier parts up to 450 pounds.
The Early YearsIn its present incarnation, Demshe Forge started in 2008, but its real roots extend much farther back. Twenty years farther, in fact, when Roger Demers and a partner started DemShe Products in 1988 with only a single contract to supply a single tank track component in hand.
In that same year, a 6-acre parcel of land was purchased in Port Robinson, Ontario. On that site, DemShe Products’ original 5,000-square-foot building, which housed a 4,000-pound Erie board hammer purchased at a military-facility auction, was built. A couple of years later an adjacent 6 acres was purchased, completing the current 12-acre site.
An experienced hammersmith by trade, Demers was instrumental in the purchase and installation of all original forging lines and support equipment necessary to get the fledgling company up, running and on a growth path. Appropriately, Demers himself forged the first pieces at the new company and has supervised the training of all its employees over the years.
Also in 1988, Demers drafted his son, Patrick, to work in the business. “The start of my career at DemShe Products began in November 1988 as a part-time janitor cleaning offices on weekends,” said Patrick Demers, currently Demshe Forge’s plant manager. As he went through high school, Patrick made the decision to work full time in the business. Through the years, he worked at every station, ranging from shearing steel to the ultimate hammersmith. Having mastered all of the floor positions in the plant, he accepted the opportunity to supervise daily plant operations.
As the years passed, the business grew and so did the product lines. But recession in the 1990s shifted the company’s mix of products toward the production of slack adjusters, a brake assembly part on heavy trucks. Through the remainder of the decade and into the new century, the company continued on its growth path, accepting some high-volume automotive and other work along the way.
However, the harsh fiscal realities of serving the automotive industry, especially during a time when it was in decline, eventually caused Roger Demers to sell the business to a management company in 2005. This did not work out well, however, and by November 2007 DemShe Products had to file for bankruptcy. Its doors were shut, and its assets were put up for auction.
DemShe Products’ strategy was to remain small and supply its customers with the best quality product possible. As the years went by, the company’s reputation grew, and so did its sales, which rose from around $300,000 (Canadian) per year in the late 1980s to about $15 million annually in 2003 before it had to close in late 2007.
Out of Bankruptcy, Demshe Forge EmergesIn the months that followed bankruptcy, Roger Demers was convinced by a potential backer to come out of retirement and back into the forging business. He agreed, and in May 2008, Demshe Forge bought, at auction, the buildings and land that were once home to DemShe Products. Immediately thereafter, a strategic decision was made to target a smaller segment of the forging industry – large forgings in the range of 30-450 pounds. With fewer competitors in this market segment, the company felt its path toward future growth would be best served by focusing on this niche. Coupled with the output of its smaller forge shop, it can now supply single to hundreds of thousands of parts weighing from ounces to hundreds of pounds.
With two returning customers, Demshe Forge soon recommenced its operations, establishing itself as a producer of low-volume steel parts. Demshe Forge currently employs 31 people in a non-union shop and is on target to hit $3 million (Canadian) in revenue this year. Many current workers were called back out of layoff from the former DemShe Products.
In order to successfully re-establish itself in the marketplace, the new company’s first priority was to get its ISO 9000 certification. In March 2010, the company was certified to ISO 9000:2008 standards, much to the credit and dedication of its quality manager and the plant’s employees.
The new forge has been successful in acquiring new customers and reacquiring its old customers. Its new customers are primarily involved in the oil and gas industry, to which 95% of the company’s output goes. The new 8,000-square-foot building housing the “heavy forge” had to be equipped in order to make these parts. Consequently, two 12,000-pound Chambersburg power hammers were purchased and installed in the facility, along with all the support equipment needed to produce these parts.
Demshe Forge also changed its end-user market focus from automotive to the oil and gas energy sector. Ninety-five percent of its output serves the energy market. Geographically, Canadian customers account for 50% of the company’s output with 30% from South Korea and 20% from the U.S.
Roger Demers is the current president of Demshe Forge, as he was of DemShe Products during its existence. His son, Patrick, having completed his education through 10 years of weekend and evening classes, is the new company’s plant manager.
Small and Heavy ForgesDemshe Forge Inc., in its present structure, consists of two distinct facilities co-located at the company’s 12-acre site. The “small forge,” which includes the facilities of the former DemShe Products, is less than 25,000 square feet in area and contains three full production lines as well as related support equipment. The “heavy forge” is in a newly erected 8,000-square-foot building located 300 feet behind the small forge. It is comprised of two full production lines. Among the services available in-house are a die shop, machining facility and an engineering department with computer-simulation capabilities.
When an order is received, the first thing to do is see if it is a repeat order. If so, existing dies must be checked and prepared for production. If not, new dies must be designed and machined, often in-house. Before production can begin, bar stock of the appropriate materials and sizes must be ordered and received. About half the company’s output is carbon steel; the other half is stainless steel. Round or square bar stock from 13/8-inch square up to 10-inch-diameter round is used. These are cut to appropriate lengths for further processing. Production for parts weighing 25 pounds or less occurs in the small forge. Heavier parts are produced in the large forge, which has a part weight capacity of about 450 pounds.
Lengths of raw bar material enter the small forge, where they are induction heated to processing temperature. From the induction furnace the heated bar stock is positioned on one of the three production hammers. The small forge currently operates with the following equipment:
- A 1,500-pound Chambersburg double acting hammer fed by a 300-kW induction furnace, a No. 4 reducer roll and followed by a 100-ton trim press
- A KHU250 Lasco Hammer fed by a 600-kW induction furnace, a No. 4 reducer roll and followed by a 150-ton trim press
- A 5,000-pound Chambersburg double acting hammer fed by a 500-kW induction furnace and a 2,000-pound/hour slot gas furnace, a No. 6 reducer roll and followed by a 175-ton trim press
- One shear, one cold saw and two bandsaws
- One 34-square-foot Pangborn shotblast unit and one Geoff hanger unit
- Four spindle CNC die sinking mills
- One production CNC machining center
- A 12,000-pound Chambersburg double acting hammer fed by a 7,000-pound/hour gas furnace and followed by a 600-ton trim press
- A 12,000-pound Chambersburg double acting hammer fed by a 2,000-pound/hour gas furnace and followed by a 500-ton trimming press
- Both hammers are followed by a heat-treat oven with quenching tank
Further part treatment may include trimming, shot blasting and/or tumbling. The company performs some non-destructive testing as part of its quality program and has a coordinate measuring machine station for dimensional checks. For more sophisticated testing, an independent testing lab is used.
Looking AheadMoving forward, Demshe Forge has made a fundamental change in its strategy toward the markets it serves. It has re-focused itself from a supplier of high-volume parts to that of a specialist in shorter production runs. As Patrick Demers points out, “The prospects of our heavy forge look promising, as there are only a dozen or so competing plants in North America with the same capability.”
With its two plants in place on its 12-acre site, Demshe Forge’s greatest challenge at this time is to make itself known to potential customers in the marketplace. With its very tight controls, the company is able to minimize downtime and exert total control over the quality of its output, thereby meeting its customers’ needs with short lead times and prompt deliveries. And with the continued economic pressure to buy North American, the firm hopes to see more and more customers switch from overseas forges to a more local supplier base. With its quality certification in hand and its full-service capabilities in place, the company is poised to serve its customers with competitive products at a competitive price.
“The exciting part of what’s happening is that Canadian work has come back because of dollar parity. Our future looks very promising,” Patrick Demers concluded.