January 1, 2005
2004 was a very busy and successful year for Ellwood Texas Forge. All of our businesses, but particularly oil and gas and industrial products (mining, crane wheels etc.), were strong. The challenge has been to ramp up production, cope with significantly higher raw material and natural gas costs and, more recently, to get adequate supplies of raw material.
Ellwood Texas Forge's safety programs continued to involve all employees - we use a modified process based upon the E.I. du Pont "STOP" program. Our quality and environmental certifications were maintained - ISO 9001:2000, AS 9100:2000, NADCAP and ISO 14001. Lean manufacturing was further introduced into our operations. As in prior years, several new products were introduced.
2005 promises to be another very busy year - our oil and gas and industrial markets continue to be strong and our missile and aircraft engine business will be more active than last year. We continue to see dramatic cost increases for raw materials, energy, some supplies and employee costs. After years of declining selling prices for many of our products, we can no long absorb or offset these costs by productivity increases and have raised prices to combat cost increases and retain adequate profitability.
Capital spending plans for 2005 include a new rotary furnace and mobile manipulator at our 11,000 ton press complex and several smaller investments to improve productivity and equipment reliability throughout our company. It has been very encouraging to see prior, large capital investments - 6,000 ton press complex, new machine shop, weld shop and CNC machine tools - help us to be more productive in the current strong market.
Again this year, we thank our customers, employees, suppliers and owners for their ongoing support.
