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Waupaca Pursuing Ambitious Expansion, Investment Strategy

April 19, 2016
Four-part, three-year plan includes more DI volume, new molding technology, and an eighth foundry for the cast automotive parts group Streamlining supply chain Customer demand for ductile iron A Mexican presence
Waupaca Foundry — widely known for its expertise with vertical molding lines — will install a horizontal molding line at its Tell City, IN, plant.

Following the completion of its merger with Hitachi Metals Automotive, Waupaca Foundry Inc. has set forth a four-part, three-year plan to update production programs and modernize some operations at its seven iron foundries, and to add new capacity.  “The merger positions Waupaca Foundry to meet evolving customer needs for cast, machined, and assembled iron castings,” according to Mike Nikolai, President and COO, of the Wisconsin-based organization.  “We are better able to streamline the supply chain for casting buyers and fulfill plans to increase revenue and profitability.”

Waupaca Foundry was purchased by Hitachi Metals Ltd. in 2014 for a reported $1.3 billion. 

Earlier this month gray iron, ductile iron, and compacted graphite iron (CGI) group consolidated its organization with that of Hitachi Metals Automotive Components USA LLC, a deal outlined in February. A Lawrenceville, PA, ductile iron foundry incorporated from the HMAC organization was added to the six foundries of the Waupaca organization (three plants in Waupaca and one in Marinette, WI; Tell City, IN; and Etowah, TN.)  

Two auto parts machining and assembly plants from the HMAC organization, in Effingham, IL, and Wellsboro, PA, are added to the group. These continue to produce and market Hitachi Metals’ brand products (including HNM series high-strength ductile and Hercunite series heat-resistant cast parts.)

Looking forward, Waupaca plans to convert the Etowah, TN, foundry to producing ductile iron exclusively. “Customer demand for ductile iron is growing,” according to Nikolai. In an interview, he indicated that the group’s ductile iron needs have increased with new requirements presented by the Hitachi organization, and that the Lawrenceville foundry is already operating at peak capacity.

Next on the new agenda is to create a “machining solution” for selected cast products. By selecting capable machine shops and fabricators near to its foundries, and coordinating its production programs and various automotive OEMs and Tier suppliers’ requirements, Waupaca aims to create an effective supply chain to fulfill its customers’ requirements.

A more specific project will see Waupaca install a horizontal molding line at the Tell City, IN, foundry, replacing one ductile iron molding line there but adding to overall molding capacity and maximizing the melting capabilities of that plant.

While Waupaca is widely recognized for its expertise with vertical molding operations, Nikolai explained that the foundry’s customers have made it clear that they prefer more options for products cast with horizontal molding  

The most ambitious aspect of the new strategy will see Waupaca expand into Mexico, either by acquiring existing capacity or initiating a new project. Nikolai explained that different approaches are being considered for the project, but he emphasized that the Hitachi organization places a high priority on establishing a presence in Mexico under its own control within the three-year time frame. In that regard, different options (i.e., greenfield construction, acquisition of existing capacity) are under consideration.

Editor's note: This article has been revised from an earlier version of the report.