Across our nation, challenges continue with supply chain and labor issues. With the turbulent times over the past 18 months having carved out challenges and opportunities, we take a look at what is happening within the PVF industry from the lens of Pat Benavides, vice president and COO of Tube Forgings of America Inc. (TFA). 

Established in 1955, TFA manufactures carbon steel and high-yield buttweld pipe fittings (elbows, reducing elbows, tees, caps, crosses, reducers), primarily used in the energy markets (oil and natural gas). TFA has its headquarters, manufacturing and warehouse operations in Portland, Ore. 

The manufacturer strives to provide its customers with industry-preferred quality products, on-time deliveries, and it is recognized for the excellent customer service it provides to its customers.

Ruth Mitchell: The economy and the industry have been on a rollercoaster ride for the past 18 months, which has significantly impacted PVF activities. What is the market currently doing in
your area?

Pat Benavides: The oil and natural gas sectors of the energy market that TFA services through its distributors is heavily dependent on the domestic and global supply and demand for oil and natural gas. The energy markets have bounced back in 2021 from the low activity we saw during 2020. This uptick in the energy markets has improved the business during 2021 for all domestic manufacturers that serve the PVF customer base.

RM: What significant trends do you see impacting the PVF market?

PB: Labor shortages and supply chain issues became major problems for all sectors of the PVF markets as businesses recovered from the COVID-19 shutdowns and closures. Some of these problems may continue to pose challenges even after COVID is well behind us. In both cases, these unprecedented challenges have caused TFA, like all companies in the PVF industry, to experience higher operating costs during 2021 and likely through at least the second quarter of 2022.

More and more of our distributors and end-users of our products are starting to once again recognize and appreciate the benefits that domestic manufacturers bring to the table — reliable and consistent product quality, the ability to better plan and manage inventories, reliable lead times, and a local contact when there are problems.

RM: What do you see as the market outlook? From your lens, when will your area and customer base bounce back to pre-pandemic levels?

PB: Marketwise, I can only speak about the energy markets that we serve. The bounce-back in the energy markets, going as far back as the business cycles in the early ’70s, has always been driven by higher oil and natural gas prices. The current and consistent higher energy prices that we’ve seen in 2021 have driven increases in MRO spending and new capital expenditures and created the higher levels of demand for PVF products that we’ve seen in 2021.

Hopefully, if oil and gas prices continue to trade at these higher levels, pricing levels that we haven’t seen since 2014, the bounce-back to pre-pandemic levels will occur and be sustainable.

RM: A lack of qualified labor and the struggle in transportation and logistics is impacting manufacturers and wholesale distributors. How does TFA help its wholesale customers navigate through the challenges of purchasing product — and delivery timing?

PB: We’ve been fortunate to have good planning tools that allowed us to plan and react quickly when we first saw signs of problems in the supply chain for our raw materials. Like everybody, we have seen delays, but to date, these delays have only affected a few of our line items. We hope the worst is behind us.

On the labor side, I think this has always posed challenges for manufacturers in the PVF sector; the pandemic only made matters worse. We’ve always been fortunate to have an excellent benefits package and ownership that invests in the employees as well as our plant and equipment; that has allowed us to retain our employees. 

But like others in the current conditions, we’ve had to get creative with sign-on bonuses, referral bonuses and targeted wage increases to recruit new talent.

RM: TFA is a member of the PVF Roundtable, an organization whose membership represents the oil, gas, utilities, chemical, and petrochemical industries. How has being a member helped TFA, and why is it essential that others lend their support to the group?

PB: TFA was actually one of the first handful of companies that joined the PVF Roundtable when Sidney Westbrook started the organization in the 1990s. TFA, with Mills Iron Works and a few others, was part of what was then a West Coast division of the Roundtable. 

Since those early days, the PVF Roundtable has evolved quite a lot. The steady growth across all sectors of the industrial PVF market differentiates the organization from other industry organizations and provides a very good opportunity for all levels of the PVF industry to network with each other and get different perspectives on markets, trends, challenges and opportunities.