Major investment helps spur growth at Zochem
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BRAMPTON, Ontario—Zochem Inc. touts itself as the largest single-site producer of high-quality zinc oxide in North America, and it recently boosted its capacity by 44 percent through a $20 million expansion and upgrade project.
Zochem was established in 1933, has been in Brampton since 1974 and was purchased by Horsehead Holding Corp. in 2011.
Horsehead acquired Zochem as part of its strategy to shut down its prior zinc oxide facility in Monaca, Pa., and relocate it to a more up-to-date plant, according to Chris Ellen, Zochem director of sales and marketing.
That led to the investment in which four of Zochem's six furnaces were upgraded and a seventh added, bringing capacity to 65,000 metric tons from 40,000, he said. The project was completed in April, and the Monaca facility closed shortly thereafter.
Zochem was a good candidate for Horsehead to target because it had excellent distribution, rail access, was close to the U.S. border, and had the ability to expand and upgrade, Ellen said.
The expansion was necessary to be able to support the amount of business that both Horsehead and Zochem had for zinc oxide.
“You had to be able to produce enough to fulfill the business we wanted to keep from Monaca as well as keep the Zochem business,” he said.
The Brampton plant utilizes the French process to make zinc oxide, using only special high-grade zinc, which Ellen said results in a higher-quality material. Because of the efficiency brought in by the upgrades, Zochem can produce the higher capacity of zinc oxide using basically the same number of people, bringing the cost per ton of production lower.
The 85,000-sq.-ft. factory also has reduced off-spec production to 0.13 percent since 2013, has reduced costs by hundreds of thousands of dollars and has an exemplary safety record, with no injuries in more than 30 months, Ellen said.
Zochem employs 45, split about evenly between operations and administration.
Tire and rubber products are the leading markets for Zochem's zinc oxide. The firm also supplies the chemicals, ceramics, coatings, pharmaceuticals and agriculture industries.
“Tire and rubber customers look for on-time delivery,” Ellen said. “They don't want to keep a lot of stock themselves. We have a lot of vendor-managed inventory. That's important to a lot of tire customers. They want the capability to have product close so we can deliver on time and quickly as their needs go up and down.”
Some competitors will offer lower pricing—especially some suppliers in Asia—but the quality generally is not as consistent, according to Ellen. He said the firm looks to create an “effortless experience” for its customers.
“You go back to the places you know are easy to work with,” he said. “It may even be a little bit more expensive, but you'd rather go to the place you know when you put the order in you're going to get it on time, they'll bill you properly and will have people there to support you.”
Zochem has positioned itself in the market as that dependable supplier that customers can count on, one with ample capacity and a proven track record. “Some people can be skeptical of trying new suppliers for chemicals,” Ellen said. “Sticking with the tried and true supplier that has the highest capacity to produce and to deliver is a comfort to them.”
The company also has implemented a customer resource management system that will be integrated into the firm's management software.
Ellen said it will give its sales managers and customer service representatives quick access to all customer data. A redesigned website that is in the works will offer web tools to ensure customers have updated information and access to Zochem's technical information and support.
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