Haynes International, Inc. operates as a developer, producer, and distributor of technologically advanced high-performance nickel- and cobalt-based alloys.
The company's products, which are sold primarily into the aerospace, chemical processing, and industrial gas turbine industries, consist of high-temperature resistant alloys (HTA) products, and corrosion-resistant alloys (CRA) products. HTA products are used by manufacturers of equipment that is subjected to extremely high temperatures, such...
Haynes International, Inc. operates as a developer, producer, and distributor of technologically advanced high-performance nickel- and cobalt-based alloys.
The company's products, which are sold primarily into the aerospace, chemical processing, and industrial gas turbine industries, consist of high-temperature resistant alloys (HTA) products, and corrosion-resistant alloys (CRA) products. HTA products are used by manufacturers of equipment that is subjected to extremely high temperatures, such as jet engines for the aerospace market, gas turbine engines used for power generation and industrial heating equipment. CRA products are used in applications that require resistance to very corrosive media found in chemical processing, power plant emissions control and waste treatment. The company also produces its products as seamless and welded tubulars, which represented approximately 12% of fiscal 2023 (year ended September 30, 2023) net product revenues and in wire form, which represented approximately 6% of fiscal 2023 net product revenues and in slab, bar, and billet form which, in the aggregate, represented approximately 18% of fiscal 2023 net product revenues.
The company has manufacturing facilities in Kokomo, Indiana; Arcadia, Louisiana; and Mountain Home, North Carolina. The Kokomo facility specializes in flat products, the Arcadia facility specializes in tubular products, and the Mountain Home facility specializes in wire and small diameter bar products. The company's products are sold primarily through its direct sales organization, which includes 11 service and/or sales centers in the United States, Europe and Asia. All of these centers are company-operated. In fiscal 2023, approximately 75% of the company's net revenue was generated by its direct sales organization, and the remaining 25% was generated by a network of independent distributors, resellers and sales agents that supplement the company's direct sales efforts primarily in the United States, Europe, and Asia.
Products
High-temperature Resistant Alloys: HTA products are used primarily in manufacturing components for the hot sections of gas turbine engines. HTA products are also used in gas turbine engines produced for use in applications such as naval and commercial vessels, electric power generation, power sources for offshore drilling platforms, gas pipeline booster stations, and emergency standby power generators. The company's HTA products offer excellent resistance to oxidation, sulfidation, metal dusting, and other high-temperature degradation modes. As such, the company expects its HTA products to be relevant in emerging technologies for lowering carbon footprints, while chemical, petrochemical, and several other industries could also create additional long-term growth opportunities.
Corrosion-resistant Alloys: CRA products are used in a variety of applications, such as chemical and petrochemical processing, power plant emissions control, hazardous waste treatment, sour gas production, and pharmaceutical vessels. In addition to the use of CRA products in the chemical and petrochemical processing industry, the company has seen an increased demand for some of these alloys in applications, such as gas-to-liquid and synthetic gas operations. Unlike aerospace applications within the HTA product market, the development of new market applications for CRA products generally does not require long lead times.
Strategy
The company's strategy is pursued within the overarching goal of safety, which continues to be its core priority. Its approach to safety includes providing leadership on awareness, communication, accountability, and process change. In addition to its ongoing focus on safety, the company seeks to continue to improve its business performance, which includes providing high-value differentiated products and services, and pricing for that value. This is combined with pursuing reduced costs, including yield and process improvements, with the result being expansion of its gross margin percentage and a significant reduction in its breakeven point.
While maintaining this improvement focus, the company continues to evaluate new opportunities and applications for its products, particularly in its core markets of aerospace, chemical processing, and industrial gas turbines, but also in the areas of renewable clean energy sources and other developing technologies relating to environmental and climate change issues. These opportunities include new generation jet engines with better fuel efficiency and fewer emissions, as well as the use or consideration for use of HAYNES alloys in advanced ultra- supercritical power plants, concentrated solar power, fuel cells, molten salt nuclear reactors, waste-to-energy, hydrogen production, and use of supercritical-CO2 power cycles for energy generation.
The key elements of the company's strategies are to ensure it is compensated for the high-value differentiated products and services it provides; increase production and sales volumes; focuses on increasing production capacity and capabilities for high-value premium products; work closely with customers and end users of its products to identify opportunities to develop and manufacture new high-performance alloys; focuses on superior customer service and allows for mill flexibility and value-added services for the customer; continue to expand the company's environmental, social, and governance (ESG) initiatives; and continue to evaluate strategic relationships in the industry in order to enhance its competitive position and relationships with customers.
Patents and Trademarks
The company maintains a total of approximately 17 published U.S. patents and applications and approximately 227 foreign counterpart patents and applications targeted at countries with significant or potential markets for the patented products.
In the aerospace, industrial gas turbine, and other high temperature alloys markets one of the alloys that has already seen significant commercial success is HAYNES 282 alloy. The alloy is specified into major aerospace and industrial gas turbine applications, as well as for certain high temperature components in the automotive and industrial applications. The American Society of Mechanical Engineers (ASME) code case for this alloy was approved in fiscal 2021. The code case will help further expand the use of the alloy into pressure vessel and boiler applications requiring ASME approvals. Another new alloy for use in the aerospace and industrial gas turbine markets is HAYNES 244 alloy. It combines high strength to 1400 degrees Fahrenheit with a low coefficient of thermal expansion. Commercialization is ongoing for this alloy, and it has been specified into certain aerospace engine programs and is being evaluated on others.
The company's customers in the chemical processing industry and corrosion resistance alloys markets have extensive applications for HASTELLOY G-35 alloy, particularly in wet phosphoric acid production. Commercialization is ongoing for HASTELLOY HYBRID-BC1 alloy. HYBRID-BC1 alloy is a CRA product with applications in the chemical processing and petrochemical industries that has demonstrated resistance to hydrochloric and sulfuric acids, as well as several organic acids. Most recently the alloy has found applications in agrichemical and refinery industries, as well as chemical processing applications that are growing as a result of the manufacturing of electric vehicle batteries.
In the oil and gas industry, HASTELLOY C-22HS alloy has found multiple applications. Commercialization of this alloy continues, as is the testing, evaluation, and promotion of this alloy with special emphasis on applications for this industry.
In addition to the successful commercialization of the above alloys, the company continues to develop applications for three new alloys which are still being scaled up at the mill and are in the early stages of the commercialization process. HAYNES HR-224 alloy is an HTA product with superior resistance to oxidation and excellent fabricability, and is being assessed in certain current and emerging technology applications. HAYNES HR-235 alloy has excellent resistance to metal dusting in high temperature carbonaceous environments. Good progress in developing new applications for the alloy for petrochemical and syngas production applications has been made this past fiscal year. Most recently, HAYNES 233 alloy was introduced to provide excellent oxidation resistance coupled with superior creep strength at temperatures to 2100°F or higher. Commercialization for this alloy is ongoing and significant progress has been made over the past year in developing applications for this new alloy in aerospace, industrial gas turbines, power generation, and other high temperature applications.
The company's strategy is to file patent applications in the U.S. and any other country that represents an important commercial market.
End Markets
Aerospace: The company has manufactured HTA products for the aerospace market since the late 1930s and has developed numerous proprietary alloys for this market. Customers in the aerospace market tend to be the most demanding with respect to meeting specification requirements, precise tolerances and achieving new product performance standards. Stringent safety standards and continuous efforts to reduce equipment weight, reduce emissions, and develop more fuel-efficient designs require close coordination among the company, the aero-engine original equipment manufacturer (OEMs), and their customers in the selection and development of HTA products. As a result, sales to aerospace customers tend to be made through the company's direct sales force. Demand for the company's products in the aerospace market is based on the new and replacement market for jet engines and the maintenance needs of operators of commercial and military aircraft. The company's HTA products are used for static components in the hot sections of aircraft engines. The company views the maintenance, repair and overhaul (MRO) business as an area of continuing long-term growth. Three of the company's newest alloys that are enabling new technologies with wrought and additive manufactured products are HAYNES 282 alloy, HAYNES 244 alloy, and HAYNES 233 alloy.
Chemical Processing: Both CRA and HTA products supplied by the company are used in the chemical processing market. Demand for the company's products in this market is driven by the level of MRO and expansion requirements of existing chemical processing facilities, as well as the construction of new facilities. The expansion of manufacturing of chemicals from natural gas in North America is expected to be a driver of demand in this market. In addition, the extensive worldwide network of company-owned service and sales centers, as well as its network of independent distributors and sales agents who supplement the company's direct sales efforts outside of the U.S., provide, in certain cases, a competitive advantage in marketing its CRA and HTA products in the chemical processing market.
Industrial Gas Turbine (IGT): Demand for the company's products in the industrial gas turbine market is driven primarily by utility-scale electricity generation, both for base load, as well as for backup generation during times of peak power demand. Industrial gas turbines are also used for power and propulsion in certain classes of ships and ferries, most commonly as derivatives of popular aero turbine engines. Demand is also generated by mechanical drive units used for oil and gas production and pipeline transportation and for back-up sources of power generation for hospitals and shopping malls. The company also has a strong presence in micro turbine applications, which provide decentralized power and thermal heating for many key markets including as backups for renewable energy. The company's products have allowed turbines to operate at higher temperatures and efficiencies for much longer service intervals than had been previously achieved. The company is supporting customers to enable the use of hydrogen as an alternative fuel for next-generation gas turbines.
Other Markets: Other markets in which the company sells its HTA products and CRA products include flue-gas desulfurization (FGD), oil and gas, waste incineration, industrial heat treating, automotive, thermocouples, sensors and instrumentation, biopharmaceuticals, solar, and nuclear fuel. The company also sells its products for use in the oil and gas market, primarily in connection with sour gas production. The company's alloys, such as ULTIMET alloy, are also actively marketed and used in wear and tear - corrosion applications.
Sales and Marketing and Distribution
The company sells its products primarily through its direct sales organization, which operates from 14 total locations in the U.S., Europe, and Asia, 11 of which are service and/or sales centers. All of its service and/or sales centers are operated either directly by the company or through its direct or indirect wholly-owned subsidiaries. Approximately 75% of the company's net revenues in fiscal 2023 were generated by its direct sales organization. The remaining 25% of the company's fiscal 2023 net revenues were generated by a network of independent distributors and sales agents who supplement its direct sales in the U.S., Europe, and Asia.
While the company continues to make concentrated efforts to expand foreign sales, the majority of its revenue continues to be from sales to the U.S. customers.
Environmental Compliance
The company's facilities and operations are subject to various foreign, federal, state, and local laws and regulations relating to the protection of human health and the environment, including those governing the discharge of pollutants into the environment and the storage, handling, use, treatment and disposal of hazardous substances and wastes. In the U.S., such laws include, without limitation, the Occupational Safety and Health Act, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, and the Resource Conservation and Recovery Act.
The company has received permits from the Indiana Department of Environmental Management and the North Carolina Department of Environment and Natural Resources to close and provide post-closure environmental monitoring and care for certain areas of its Kokomo and Mountain Home, North Carolina facilities, respectively.
Research and Technical Costs
The company's research and technical costs were $4,126 for the year ended September 30, 2023.
Competition
The company's primary competitors in flat rolled products include Special Metals Corporation, a subsidiary of Precision Castparts Corp. and ATI, Inc.
History
Haynes International, Inc. was founded in 1912. The company was incorporated in 1986.
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