In 2004 Orb Electrical Steels faced a precarious future. After 106 years of manufacturing steel, the management team decided that a comprehensive business makeover was required if Orb was to survive and thrive in the global electrical steel industry. Will Stirling talks to Mark Cichuta and John Homewood about a total business transformation.
Five or more years ago, had you asked a resident of Newport, Gwent what went on at the big factory off Corporation Road, it’s unlikely that they would have known. Before 2004, the local community knew little about Orb Electrical Steels and many thought the buildings were merely redundant warehouses. Today Orb is firmly on the map. The local newspaper, the South Wales Argus, has a number of stories about the steelmaker on its website, under the name Orb or Cogent Power, its parent company, and Orb has made no attempt to keep the business turnaround that has occurred in the last five years a secret. In February 2008, for example, the company’s Project Renaissance sold 23 acres of surplus land for development, revenues that were reinvested in the company to help update it for 21st century steel production. Part of the investment was a £4m construction contract including a modern 30,000 sq ft head office, and several essential improvements to the factory buildings. It was the biggest investment in the business since the 1960s, according to General Manager Mark Cichuta. Other improvements included a new welfare centre, shower facilities, canteen and locker rooms and a new chemistry laboratory. And today an estimated £75m of the site’s spend goes into the Newport and South Wales economies.
Fundamental improvements in infrastructure were just part of a long term strategy to transform the whole business into a world-class company, a strategy that included: implementation of lean thinking throughout – which included reducing waste and focusing on a better quality, high value product – more efficient manufacturing processes; a safer working environment; better staff facilities; improved customer and supplier relations and a shared vision and passion for the future of the reborn business from customers, suppliers and staff alike.
The history of Orb
Orb Electrical Steels is one part of Cogent Power, a wholly-owned subsidiary of Corus, in turn part of the Tata Steel Group. There are two other businesses in the Cogent group, Surahammars Bruks in Sweden and Cogent Power Inc in Canada. Orb in the UK specialises in the production and global sales of grain oriented steels used for electrical transformers and power generation.
Steel has been processed or manufactured on this site, alongside the River Usk in
south-east Newport, since 1898 when the Lysaght family opened the first factory. Orb Works produced aluminium for fighter aircraft in World War II, then in 1947 the decision was made to specialise in electrical steel. Also known as non-oriented lamination or grain oriented transformer steel, this is a speciality steel manufactured in cold-rolled strips or laminations often less than 0.30 mm thick.
Once assembled, the strips form the laminated cores of power transformers, and the stator and rotor parts of electric motors. The transformers are used in housing estates, hospitals, factories and other industrial applications. Orb now concentrates solely on the manufacture of these grain oriented electrical steels or “GO”. Therefore the magnetic properties and permeability of the steel is vital to its end use (see box How GO steel is made).