Service Center Metals Completes $25M Expansion

March 14, 2017 / Current News

By J. Elias O’Neal, Richmond BizSense

A local aluminum manufacturer recently unwrapped an eight-figure expansion of its operations – and more growth could be in the works.

Service Center Metals completed a $25 million upgrade and addition to its facility at 5850 Quality Way in the SouthPoint Business Park in Prince George County.

Run by Richmond resident R. Scott Kelley, SCM produces aluminum rods and bars; tube and pipe; and shapes used in construction, transportation and machinery.

“There is a huge demand for aluminum products right now,” said Kelley, the company’s president and CEO. “That in return is helping us grow locally.”

SCM grossed about $150 million in revenue in 2016, Kelley said.

As part of the expansion, SCM added 190,000 square feet to its complex, which now totals 426,000 square feet. Kelley said the plant added another furnace, two aluminum casters and a sorting machine for its scrap aluminum operation.

The new aluminum casters, which produce melted aluminum tubes known as billet, were activated last week.

“This is a 24-hour, seven-days-a-week operation,” said Kelley, who lives in Shockoe Slip, during a recent tour of the facility. “With the new presses in place, we’re going to be able to grow our capacity while maintaining our quality.”

The company used an undisclosed out-of-state lender to finance the expansion, Kelley said. The firm did not receive state or county incentives.

SCM’s expansion will allow the firm to add 35 to 40 new positions to its operation of about 200 employees, Kelley said, with an average wage of about $25 an hour, including incentive pay.

Kelley, along with vice presidents Chip Dollins Jr. and Randy Weis, launched the operation in 2003 after individual stints with Reynolds Metal Co. They started out with an 81,000-square-foot facility, Kelley said.

After a lull during the recession, Kelley said the firm ramped up operations in 2013 to meet the demand for aluminum, mostly from the automobile industry.

Kelley said automobile producers are under increased pressure to satisfy regulatory requirements on greenhouse gas emissions and fuel efficiency. As a result, he said, vehicle light-weighting has come to the forefront – propelling aluminum as a go-to material for manufacturing cars and trucks.

“It’s really helping to fuel significant changes in this industry,” Kelley said, “and that demand continues to grow, which is prompting us to grow with the demand.”

In 2014, the firm added 81,000 square feet to install a re-melt casting facility for melting scrap aluminum.

Equating parts of the heavy-duty manufacturing operation to a Play-Doh mold machine, Kelley said the furnace heats the aluminum up to 1,100 degrees. The aluminum then is placed into logs that can be pressed into various shapes. The aluminum logs also are sold to other extrusion makers.

By August, Kelley said, the firm will hit the milestone of 1 billion pounds of aluminum products sold since its inception.

And more growth may be on the horizon at SCM.

Preliminary plans call for the plant to add another 110,000 square feet if demand continues, Kelley said. He added SCM looks to grow its operation outside of Prince George County, although Kelley said the firm has not settled on any sites.