ARC Specialties

By Eric Peterson | Jul 25, 2023

Company Details


Houston, Texas



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Running a company that's a case study in innovation, CEO Dan Allford is bringing automation from factories into offshore drilling, operating rooms, and shipbuilding yards.

Running a company that's a case study in innovation, CEO Dan Allford is bringing automation from factories into offshore drilling, operating rooms, and shipbuilding yards.

While working for Hughes Tool by day, Allford founded ARC Specialties as a side hustle. "It started out of my garage in 1983," says the self-described "welding geek."

Allford melded that passion with automation as the business grew and went full-time with ARC in 1990. "Being a Houston boy, I was immersed in the oil patch, so that's where most of my work came from initially, and it still does," he says. "But since then, we've diversified. We're doing electric cars, we're doing gas cars, we're doing missiles, we're doing stuff in agriculture, even medicine, you name it. These days, we're in 33 countries and most industries."

Today, ARC Specialties works out of a 100,000-square-foot facility on the west side of Houston. "We're vertically integrated," says Allford. "We design and build everything in-house. That means we need an R&D lab, mechanical and electrical designers, a machine shop, a weld shop, a paint shop, and an assembly area."

Stand up to stand out

The differentiator? "We're not afraid of the tough jobs," he answers. "For example, in robotic welding, probably 80 percent of all welding is resistance welding, spot welding, or MIG welding, and yet at our shop, less than 20 percent are those processes. So we take the processes the other guys don't want to do: plasma, laser, electroslag, submerged arc."

The oil industry has been a great proving ground for ARC, as the requirements for manufacturing valves and other parts are often higher than other industries. That means the automation to make them needs to handle more and different tasks.

"The oilfield is one of the most harsh environments," explains Allford. "All the oil left is so deep, and the temperatures and pressures are so high down there, they must treat all oil as if it were sour. Sour means corrosive, hydrogen sulfide, so we must inlay all these valves with corrosion-resistant material to withstand this environment."

Taking on these kinds of jobs has opened doors for the company, he adds. "We've got hundreds of these valve machines running worldwide, and recently we got a call from the nuclear valve industry. They realized we had already done all their work for them, so we're now transferring this technology from the oilfield into the nuclear valve industry. They have different sets of problems but very similar solutions."

The status quo for valve-making in the nuclear industry is manual welding. "You can't achieve the productivity and the quality necessary to compete in the oilfield with a manually welded valve, and ironically, the nuke industry is a bit behind," says Allford. "We transitioned from stick welding to plasma welding, from manual to robot, from high reject rate to low reject rate."

The COVID-19 pandemic led to a slowdown in the oil industry, leading Allford to pursue work from EV OEMs. "The electric vehicle industry is quite dynamic and creative, so they're going away from sheet metal chassises to cast chassises," he notes. "When you make a large casting, one of the secondary operations is trimming."

"Traditionally, you do that with a trim press, and a trim press costs a million bucks and a trip press die costs a million bucks. But, as I said, the EV industry is quite creative, so instead of trimming with a trim press, they came to us and asked if we could do it with a robot and a plasma torch. Plasma is just an amazing process. Plasma is the fourth state of matter, and it's a great way to cut metals, so we've got a dozen robots out there now trimming these cast chassises."

Moving in on the lasers

ARC has parlayed that success into the broader automotive market. "My job is to encroach on lasers' territory," says Allford. "Plasma is safer, lower initial cost, and much lower energy costs, so we've been successful in the internal combustion engine segment with the OEMs in replacing laser cutting with plasma cutting. We've got our accuracies down to plus or minus 3/1,000th of an inch, which is almost laser quality at a tenth of the energy costs."

Allford says many of his latest targets are not traditional manufacturing environments. "Our big push lately has been moving robots out of the factory into the problems," he says. "We're putting together our third drillship robot system, so when you're drilling an oil well on the Gulf of Mexico or the North Sea, the drillship is not anchored, it's dynamically positioned above the ocean floor using GPS and thrusters, but you have to connect that drillship to the ocean floor. It may be two miles away, and you still have to drill through several miles of rock to get oil."

"The way you connect that drillship to the ocean floor is called a riser. It's a huge bolted flange conductor tube that connects the drillship to the ocean floor. They are manufactured in 70-foot lengths, and we have to bolt enough of them together to make that two-mile span. Traditionally, this has been a very dangerous, labor-intensive project to pick up these 50-pound bolts and torque them to 18,000 foot-pounds of torque as you assemble this."

The bottom line? "We're able to do them 30 percent faster, and we're able to get humans out of harm's way," says Allford. "We just won the 2023 FANUC Innovative System of the Year for our offshore robot, but that's just one example of us taking the robots out of the factories and moving them into the field."

Automation solves workforce issues

Shipbuilding for the U.S. Navy is another example of ARC automating outside the factory. Regardless of the application, it all comes back to workforce issues, says Allford. "There's a shortage of skilled welders as the workforce ages and grays. They're not just looking for efficiency; they're looking for robots or people with the skills necessary to weld high-strength steels, which is not an easy task."

As reshoring accelerates, automation is quickly becoming a must-have, he adds. "It's essential, because everyone in America has a high standard of living. In order to maintain that, that means we have to be more efficient so there's greater profit per part. The only way to achieve that efficiency is through automation."

"The reason we have plentiful food and very few people working on the farm is because agriculture was our first automation success story in America. We went from half the people working on the farm down to less than 2 percent -- and more plentiful food. That's why I find it ironic when people fear robots or want to tax them because it's really no different than a tractor or a dishwasher. It's just another labor-saving device."

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