SIC 3567
INDUSTRIAL PROCESS FURNACES AND OVENS

Firms in this industry are primarily engaged in manufacturing industrial process furnaces, ovens, induction and dielectric heating equipment and related devices. Products not included in the classification include bakery ovens ( SIC 3556: Food Products Machinery ); cement, wood and chemical kilns ( SIC 3559: Special Industry Machinery, Not Elsewhere Classified ); cremating ovens ( SIC 3569: General Industrial Machinery and Equipment, Not Elsewhere Classified ); and laboratory furnaces and ovens ( SIC 3821: Laboratory Apparatus and Furniture ).

NAICS Code(s)

333994 (Industrial Process Furnace and Oven Manufacturing)

According to the U. S. Census Bureau, this industry had 351 firms employing 14,716 employees with a payroll of more than $586 million in 2001. The majority of these establishments employed fewer than 100 employees. The Annual Survey of Manufactures reported that more than 9,000 workers in this industry were in production, and 2001 total shipments were valued at more than $2.2 billion—a decrease from nearly $2.6 billion the previous year.

The concept of using heat to modify a material in some desirable manner originated very early in human history. Its application gave us names for eras like the Bronze Age and the Iron Age, as scientific advancement combined furnace design and fuels to achieve higher and more controllable temperatures and chemical reactions within the combustion or heating chambers. The Industrial Revolution brought the biggest advancements and launched the Steel Age as industry abandoned charcoal as the most common fuel and adopted coal and coke. By the end of the twentieth century, natural gas and electricity were displacing much solid fuel use.

However, near the end of the twentieth century many of the industry's prime customers did not utilize the new technologies. For instance, the steel industry used the Bessemer process, which involved blowing large volumes of heated air through molten iron in a furnace. The American steel industry began using the process in the 1860s. The open-hearth method, developed in the same decade, produced larger volumes of steel over longer periods of time, allowing for better quality control. By 1907, the open-hearth method was more popular than the Bessemer was. In the 1950s, however, furnace designers found they could improve the performance of the Bessemer furnace by using oxygen instead of air and the Bessemer furnace once again took the lead. By 1990, U.S. steel producers were using the Bessemer oxygen furnace for 59.7 percent of production, the open-hearth method for 3.5 percent, and electric furnaces had grabbed 36.8 percent of the market, according to Market Share Reporter.

This was only after more efficient foreign competition forced U.S. steel manufacturers to close outdated smelters and blast furnaces across the country. The area around Pittsburgh once supported 80,000 steel manufacturing jobs, but by 1990 fewer than 4,000 remained as the industry shut down and shifted production to newer mini-mill facilities.

In the 1990s, concern over air quality prompted passage of the Clean Air Act, which mandated reductions of nitrous oxide emissions from such facilities as smelters and blast furnaces and designated such facilities as prime areas of concern. The legislation required special operating permits and monitoring provisions.

According to the Industrial Heating Equipment Association (IHEA), total domestic and foreign orders for industrial heating equipment (as reported by 21 companies) dropped by 26 percent to about $218 million during the first three quarters of 2002, compared to the previous year. Domestic orders also dropped by 27 percent to roughly $178 million for the same period. Domestic industrial furnace and oven orders dropped by 56 percent to about $62 million. During the first quarter of 2003 (as reported by 16 companies) there was an increase of 1 percent over the same period in 2002. Domestic orders were down 5 percent, but foreign orders were up 48 percent.

Despite this uncertainty, the industry continued to look ahead. In 2003, IHEA reported that nearly one-fifth of domestic industrial energy use was process heating, as most consumer products require the use of process heating. Technology was being used to focus on making the systems more efficient, reliable, and cost effective, while at the same time improving both safety and automation. New research was developing a variety of laser sensors, as well as fiber optic and other advanced measurement process controls. In conjunction with the Department of Energy, the industry was moving toward the development of computerized assessment and control software in the early part of the decade.

Conceptronic Inc. of Rockville, Maryland, led the industry in 2001 with $197 million in sales and 1,600 employees. In 2003, the company specialized in systems operating under 400 degrees Celsius. Pittsburgh-based Chromalox Inc. was in second place with $136 million in sales and 2,000 employees. Rounding out the top three was Springfield Wire Inc. of Springfield, Massachusetts, with $126 million in sales and 800 employees.

Both U.S. exports and imports decreased in the 1990s and early 2000s. Asia and Western Europe were consistently the top foreign markets for the industry during these years. Along with nearly every manufacturing sector, this industry was hit hard by the transfer of jobs overseas as well as increased competition from foreign markets. According to the National Association of Manufacturers, quoted in the IHEA Newsletter , the recovery of the U.S. manufacturing industry as a whole was "the slowest on record since the Federal Reserve began tracking industrial production back in 1919." Nonetheless, the industry was looking up by the mid-2000s, with projected employment stabilization and economic growth.

Further Reading

Baker, Deborah J., ed. Ward's Business Directory of US Private and Public Companies. Detroit, MI: Thomson Gale, 2003.

Cole, John. "Moving Forward in Difficult Times." IHEA News , September 2003.

"Corporate Overview." Conceptronic. 6 March 2004. Available from http://www.conceptronic.com .

Darnay, Arsen J., ed. Manufacturing and Distribution USA. Detroit: Thomson Gale, 2003.

"DOE-IHEA Allied Partnership Agreement." Cincinnati, Ohio: Industrial Heating Equipment Association. April 2001. Available from http://www.ihea.org/third_level_pages/ind_APR1.html .

Laird, Joyce, "Reflow Technology Ready for Lead-Free Challenge." Electronic Packaging & Production , November 2001.

"A New Future for Process Heating." Cincinnati, Ohio: Industrial Heating Equipment Association. January 2003. Available from http://www.ihea.org/third_level_pages/ind_JAN03a.html .

"Orders Show Decline for First Three Quarters of 2002." Cincinnati, Ohio: Industrial Heating Equipment Association. January 2003. Available from http://www.ihea.org/third_level_pages/ind_JAN03e.html .

U.S. Census Bureau. Statistics of U.S. Businesses: 2001. 1 March 2004. Available from http://www.census.gov/epcd/susb/2001/us/US332311.htm .

U.S. Department of Commerce. Annual Survey of Manufactures. Washington: GPO, 2002.

U.S. Department of Labor, Bureau of Labor Statistics. Economic and Employment Projections. 11 February 2004. Available from http://www.bls.gov/news.release/ecopro.toc.htm .