CCMCO in the News

Tulsa firm to help Romanians build pipe-casting plant
Tulsa Business Journal, August 7- August 13, 1998 page 7

$18 Million pact means 40 jobs at Tulsa plant
An all-star "cast" of local state and business leaders has helped a local company land a major casting equipment contract abroad. Centrifugal Casting Machine Co. has signed an $18 million contract to supply casting equipment and training to Sidermet S.A. of Calan, Romania.

Sidermet is owned by the government of the state of Romania. This contract makes Centrifugal Casting Machine Co. the largest exporter of centrifugal casting equipment in the world. The contract also means up to 40 "mostly technical" new jobs at the Tulsa plant -- a doubling of their current workforce, said Tom McKee, president. Additionally, the contract will disperse $5-6 million to local vendors and suppliers, he said.

The centrifugal casting equipment produced by the company used rotating molds to feed molten metal uniformly into a pipe mold cavity. Water pipes produced at the Calan plant will be used to upgrade the water transportation infrastructure throughout Romania, beginning with Bucharest, the country's capitol city.

The population of Bucharest is approximately two million. The population of Romania is about 23 million.
Besides the $18 million worth of equipment provided by Centrifugal Casting, the pipe-making plant is also purchasing new furnaces from Romanian sources and is undergoing other modernization efforts.

The factory conversion will cost approximately $32 to $33 million.Once the plant is completed, CCMC personnel will assist in onsite training, operations and consulting for Sidermet. McKee said the first pipe will be manufactured in the spring of 2000.The plant will provide approximately 250 jobs in what is currently an economically depressed area.

Members of the Metropolitan Tulsa Chamber of Commerce, Tulsa's Mayor's office, the United States Export-Import Bank and the Oklahoma's Governor's office all contributed to the procurement of the contract, McKee said. McKee said that because "obtaining contracts is highly political in Romania... the strong showing of officials was necessary for the project's success."

A chamber-sponsored trip to Romania in 1996 was a "key element of support," he said.
In 1996 Mayor Savage met Victor Ciorbea, when he was serving as the mayor of Bucharest. Ciorbea later went on to become the prime minister of Romania. At the state level, Gov. Frank Keating "wrote the letters and made the phone calls," that opened doors for the company, McKee said. Securing the Romanian contract "is an example of the partnership that can and must exist between city, state, chamber and private businesses," Keating said.

The Export-Import Bank of the United States, working through locally-owned American Bank provided both working capital to Centrifugal Casting to build the pipe making equipment and to Sidermet for purchasing the equipment. The ability to manufacture their own pipe will greatly benefit the Romanians on two fronts, according to Barbara Gardner, chamber chairman and leader of the 1996 Chamber delegation.
Gardner said that Romania's water transport infrastructure is in poor repair. "Their water system at present loses 60 percent before it gets to intended destination," she said. The water that does come from the tap is undrinkable, she added. Also, the country's reliance on imported pipe to upgrade their water system has put a strain on the country's finances, she said. Romania spends $20-50 million a year on pipe from foreign sources, she said.

To purchase this pipe, the country must use World Bank credits, "which are very precious," Gardner said. The one-time $18 million dollar plant investment should bring those costs to zero, McKee said.
McKee, whose company does business in 20 countries a year, said this contract takes Centrifugal Casting "to the next level of growth." "There will be many more projects like this and we will go after them, he said."
McKee said that 60 to 80 percent of Centrifugal Casting Co.'s annual business is in foreign exports.

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