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Jul 5, 2018 - READ MORE: Harley-Davidson, stung by tariffs, shifts some production overseas ». Aluminum powder and alum
Carbon County business expanding, innovating — and battling aluminum tariffs

PHOTO GALLERY: Ampal Inc., a Lower Towamensing Township producer of aluminum powder. Its parent company, U.S. Metal Powders, is celebrating its 100th anniversary in July. The company is also in the process of expanding production by 50 percent as well as contesting the aluminum tariffs imposed by the Trump administration. (RICK KINTZEL/ THE MORING CALL)

By Andrew Wagaman Of The Morning Call

JULY 5, 2018, 4:30 PM

estled against the Aquashicola Creek and the northern slope of Blue Mountain, the nation’s most productive aluminum atomizer runs 24 hours a day, seven days a week. Ampal Inc.’s manufacturing facility in Lower Towamensing Township is in itself unassuming, but President Louise Ramsey Thomas will encourage you to step back toward Little Gap Road and take in the surroundings. The Wall Street veteran marvels at its beauty. Ampal is a 40-employee family business that produces more than 10,000 tons annually in aluminum

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powder — the most in the nation. Its parent company, U.S. Metal Powders Inc., is celebrating its 100th anniversary this weekend. The Palmerton-area manufacturing facility has been in operation since 1981, but Thomas moved the company headquarters there from Flemington, N.J., after succeeding her father, K. Clive Ramsey, who died in 2016. Since then, Ampal has opened a research and development lab, or “Global Technical Center,” and is planning a manufacturing line that would increase production another 50 percent and add up to 10 jobs.

Worries over tariffs But a shadow looms over the excitement. Last week, Thomas filed three exclusion requests with the U.S. Department of Commerce to avoid the recently imposed tariffs on aluminum it imports from Canada. The company filed an additional request this week. She wishes President Donald Trump would step back and see the bigger picture. There’s just one U.S. smelter from which Ampal can buy the T-bar ingots compatible with its manufacturing line — and it’s in Washington State. Transportation costs make this option “not viable,” Thomas says. The majority of its raw material comes from Canada via rail. In a letter sent to about a dozen federal, state and local officials, Thomas said the 10 percent tariffs represent a major disruption to Ampal’s business. It competes against companies in Europe, the Middle East and Asia, all of whom sell aluminum powder tariff-free to American businesses (more than half of Ampal’s customer base). If the exclusion requests are not granted, Ampal may have to re-evaluate its expansion plans and even consider downsizing, she wrote. That would come with an added twist. “We have long-term, fixed-price contracts with defense suppliers to the United States government, which have been established based on our prior understanding of the aluminum markets and pricing,” Thomas wrote. “It is ironic that the administration is citing national security as one of the primary driving forces for this pending action.” Trump first announced the steel and aluminum tariffs in late February, but he delayed implementation against Canada and Mexico in late April amid continued NAFTA negotiations, and many analysts considered it a short-lived bargaining tool. But NAFTA talks broke down, and the tariffs went into effect June 1. Canada’s retaliatory tariffs went

into effect last week. China and Europe responded with tariffs of their own. The Department of Commerce received more than 20,000 exclusion requests since the first steel and aluminum tariffs went into effect May 1. According to a recent study by the Trade Partnership, a Washington, D.C., consulting group, Trump's steel and aluminum tariffs will create an estimated 33,000 U.S. jobs — but eliminate 180,000, including 36,000 manufacturing jobs. Protectionist trade policies have a long history of offering modest but tangible and concentrated economic gain in exchange for much greater, but dispersed, economic destruction, according to a 2017 paper by Scott Lincicome, an international trade attorney. Four studies of U.S. import restrictions between 1950 and 1990 found that every job saved by the restrictions cost U.S. consumers an average of $620,000 in current dollars.

Technical innovation For Thomas, the threat of tariffs has added a layer of uncertainty to already difficult business decisions. Most importantly, tariffs have diverted scarce time and resources away from doing what businesses are supposed to do: create value. When their father died in 2016 after more than 30 years running the company, Thomas and her two brothers decided to retain the business despite all having careers of their own. Patrick and Peter Ramsey are board members and their sibling group text is active just about every day, Thomas said. “We didn’t want to sell the company,” she said. “One, we want to carry on Dad’s legacy, but we also have a lot of confidence in the business and we want to grow it.” READ MORE: Harley-Davidson, stung by tariffs, shifts some production overseas » Aluminum powder and aluminum alloy powders have a slew of uses — reagents in the chemical industry, explosives and propulsion, welding and conductive inks for solar cells, to name a few. Aluminum is a lightweight metal, and among those it’s the cheapest. The key is creating alloys that are strong enough to replace heavier, more expensive counterparts. Under the leadership of vice president and technical director Jessu Joys, employees in the new R&D center are working on innovations in additive manufacturing, powder metallurgy and powderinjection molding. For example, Ampal makes proprietary powder blends during which powder particles are sintered — or solidified — using heat, to create a material that’s both high strength and lightweight. Such materials are crucial to the automotive industry — lighter vehicles help companies meet emissions standards and gas mileage targets.

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Ampal is working with the U.S. Department of Energy’s Ames Laboratory at Iowa State University on atomization technology that reduces the amount of raw material that goes to waste. After aluminum is melted, it flows through a device called an atomizer that creates a wide spectrum of particle shapes and sizes, which have different uses in different industries. The Ames Lab’s nozzle technology gives powder companies like Ampal more control over the particle size distribution, allowing it to more narrowly produce droplet sizes for a particular use with little raw material in various other sizes leftover. Perhaps the most exciting development is in additive manufacturing, or 3D printing using metal powders. “Right now additive manufacturing is driven by aerospace and medical [device] manufacturing, but as the material becomes more flexible in properties and price, it will hit lower-level commodities,” Joys said. “Aluminum is in a very good position, it’s just that we need to add more characteristics to it.” Ampal is in the process of creating a partnership with Lehigh University’s Center for Advanced Materials and Nanotechnology and Additive Manufacturing Lab, which own one of the few Renishaw industrial platform 3D metal printers in the country and is at the forefront of metals-based 3D printing research. Rick Vinci, director of the center, said aluminum is not currently one of the widest-studied metals when it comes to 3D printing. That’s because the aluminum alloys most commonly used in manufacturing do not print well (they tend to crack). But, he said, there is “huge potential” for researchers and companies that specialize in aluminum to tinker with the alloy characteristics and create more reliable and higher-quality printing. “The efforts at companies like Ampal are very well-timed to make a big impact,” he said. “In five years, it might be too late to get into the game.” Remember, the industry is a global one, Thomas said. Myopic regulation today very well could influence its competitive advantage tomorrow. [email protected] Twitter @andrewwagaman 610-820-6764 Get the inside scoop on the Lehigh Valley's business scene on The Business Cycle, themorningcall.com/business

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