A technology first used 40 years ago to hold fluid inside industrial gaskets now keeps smartphones and flat-screen televisions the world over from overheating, thanks to the innovation of Parma-based GrafTech International.
Originally a manufacturer of carbon brushes and the electrodes used to power the first street lights, the company has survived for more than 125 years in Northeast Ohio by evolving products and applications in the area of graphite material science.
It has diversified into about 50 different sectors, including steel, advanced consumer technologies, solar power, diamond drill bits, lithium ion batteries, nuclear applications and fuel cells.
“That’s innovation,” says Craig Shular
, the company’s chairman and CEO. “You take a base technology used in one product and create another product that looks completely different, with a solution that is completely different.”
One of the company’s biggest growth sectors, however, has been in thermal materials. Used in electronic devices, they are produced in the company’s 22-acre Lakewood site near West 117th Street and Detroit Avenue.
The thin sheet of graphite — about a quarter the size of a human hair — is laid inside nearly all smartphones, tablets, small lap computers, flat-screen televisions and e-readers, to evenly distribute heat.
Though Graftech’s largest revenue stream is in the steel industry — about 80 percent of its income is generated from graphite electrodes used to melt steel on a smaller scale than traditional blast furnaces — high-tech innovation markets are a huge growth area, with few competitors for the company and high-profit margins. As a result, GrafTech’s technology is in nearly all devices in this segment.
“You start out with few competitors and then in 20 or 30 years, you have a lot of competitors,” Shular says.
Yet, the nature of the technology also demands that GrafTech moves quickly as well. The cell phone has gone from the size of a brick to something that can fit in your back pocket and handles voice, data, pictures, applications and streaming video.
“[It] changes dramatically every three months or so,” Shular notes. “So this specific area is not only driven by innovation, but the ability to serve very fast-moving markets.”
GrafTech began to generate sales in thermal management about eight years ago when flat-screen TVs were picking up in the marketplace. Back then, phones were pretty simple and didn’t have a lot of heat issues. That’s not the case today.
“Because they have all this functionality, they had tremendous heat issues,” Shular says. “Sales have continuously picked up in this area.”
A research and development grant from Ohio’s Third Frontier program also helped the company accelerate its development. “Sometimes you leave the competitors behind because they just can’t keep up,” he says.
In 2008 and 2009, smartphones didn’t experience a recession like much of the country and some of the markets that GrafTech serves. In fact, smartphone sales went up every year from 2009 to 2011. That was good news for the Lakewood plant, which grew from 95 employees in 2010 to 150 earlier this year, with more potential hires on the way.
Over the past few years, GrafTech has added hundreds of employees worldwide to make it a 3,000-person company with $1.3 billion in revenues in 2011.
GrafTech has production facilities on four continents and sells its products in 70 countries around the world.
“I would attribute that to new technologies that we have come up with,” Shular says.
But the company hasn’t forgotten its roots. At the 35-building site in Lakewood, the company (originally known as the National Carbon Co.) helped build the roads and the homes to house early employees. And although they’re running a Lean Six Sigma operation inside, the exteriors of the century-old buildings remain the same.
“To maintain our history and our team spirit,” Shular says, “we’ve kept many of the original buildings.”