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O’Neal
Steel Acquires Leeco Steel
In a strategic move to enhance its presence in the market for specialized
grades of high-strength steel and alloy plate, O’Neal Steel,
Birmingham, Ala., has purchased the assets of Leeco Steel Products
Inc., Darien, Ill.
Leeco
is focused on distributing and processing specialized plate such
as carbon steel, alloy, high-strength, extra-high-strength, abrasion-resistant
and weathering steel.
Leeco
also operates a service center in Manitowoc, Wis. The two locations
service customers throughout the U.S., Canada and Mexico.
O’Neal
Chairman Craft O’Neal and President Bill Jones cite Leeco’s
specialized product mix as “an excellent strategic addition
to the O’Neal line.”
“We’re
always looking for opportunities to do more for our customers,”
Jones says. “The ability to supply and process even more types
of high-strength steel and alloy plate will enable O’Neal to
serve new and existing accounts in more ways than ever before.”
Under
O’Neal’s ownership, the company will do business as Leeco
Steel LLC. Like O’Neal’s other subsidiaries—Metalwest
and Aerodyne Alloys—Leeco will operate as a stand-alone company
led by current President Bob Pepoff and his management team.
Carrier
Woes, or Why It’s
Hard to Book Your Load
During the recent Steel Markets North America conference in Chicago,
sponsored by Steel Business Briefing and the American Institute
for International Steel, Carole Wink provided some key figures on
the costs and other difficulties of operating a carrier company.
Wink is the founder and senior vice president of Ancon Transportation
in Carson, Calif.
Since
2001, 20 percent of trucking capacity has exited the industry. “Ten
thousand trucking companies went out of business last year. So trucking
has been in a deflationary state and there is very little new investment
coming in.”
Seventy-five
percent of all products in the United States move by truck, Wink
said, and international trade is expanding. “The United States’
trade economy is back, yet there are far more loads than there are
carriers to take the loads.”
Carriers
are not buying new trucks because there is a shortage of drivers.
Driver turnover during 2004 was 110 percent, she said. The baby
boom generation is retiring and few young people show any interest
in this career.
“In
the future, probably $40,000 to $50,000 will be your basic pay for
a truck driver,” Wink said, adding that Wal-mart is paying
drivers $65,000 a year plus benefits. Some carriers “are trying
to buy their competitors just to get their drivers on board.”
New
transportation equipment and technology is expensive, and financing
is difficult to obtain, she continued. “A new engine costs
$4,500 more this year than it did last year. A tractor costs from
$80,000 to $120,000. A trailer costs $21,000 to $24,000.” This
has led to a shortage of trucking equipment. “Available equipment
is very tight right now. Delays are common,” said Wink.
Then
there are escalating insurance costs, especially workers’ compensation
and liability insurance, which rose 15 percent a year for the last
several years. That cost was never passed along to users, she added.
“There are no new company startups. The barrier to entry is
getting insurance.” Other hidden costs include regulatory compliance,
taxes, tolls and homeland security.
Record
fuel costs are much more evident. “It is prudent for shippers
to follow the fuel price indexes, and work with their carriers”
to negotiate appropriate fuel surcharges, Wink advised. “Many
truckers refuse to drive into California because fuel is so high;
they’ll stop at Arizona or Nevada.”
Regulated
hours of service for drivers went from 15 to 14. “That made
a huge difference. It isn’t the driving time, it’s the
waiting. So it’s extremely important to load and unload in
a timely manner. If not, detention [fees] kick in at $60 an hour,”
Wink warned.
She
predicted that freight rates, which had been low for many years,
will be changing radically—“20 to 25 percent depending
on where you are in the United States. This won’t be a one-time
event; it will continue to rise.”
—By Corinna C. Petry
Copper
and Brass Sales
Buys Slitco Metal Processing & Sales
Copper and Brass Sales, Southfield, Mich., has purchased Slitco
Metal Processing and Sales, Countryside, Ill. The company will continue
to do business as Slitco Metal Processing, and its president, Ronald
Buzinski, will continue to run the Slitco business as a division
of Copper and Brass Sales.
William
G. Sabol, president and COO of Copper and Brass Sales, says the
acquisition “provides our company with additional capabilities
in light-gauge and narrow-width slitting in red metals. This new
capacity aligns perfectly with our long-term strategic plans. We
are looking forward to working with Slitco’s employees as we
grow our business together.”
Buzinski
says the sale of his company is “a very positive transaction
that gives us strength to expand our customer base.”
Slitco’s
day-to-day activities will not change, he adds.
Novamerican’s
Sales Jump 40 Percent
Montreal-based Novamerican Steel Inc., a processor and distributor
with 12 locations in Canada, reported net sales of $206.3 million
and net income of $10.1 million for the first quarter ended Feb.
26, 2005. Revenues and earnings jumped 40 and 43.5 percent, respectively,
over the first quarter of 2004.
The
company sold and processed a total of 448,688 tons in the first
quarter, a 2.8 percent increase from the tonnage sold and processed
in the same three months last year.
The
first quarter, typically the company’s weakest period, was
successful despite lower steel prices that occurred with seasonally
weak demand and a surge of imports that arrived in the fourth quarter
of 2004.
Company
managers expressed optimism that the high levels of inventories
throughout the industry should abate sometime in the second quarter.
According
to Chief Financial Officer Christopher Pickwood, “Our business
in manufacturing sectors, such as automotive, construction, transportation
and heavy equipment, is continuing to show good demand heading into
the second quarter.”
U.S.
Metals Joins Esmark
Esmark, the Chicago-based service center operator, has acquired
U.S. Metals and Supply Co., St. Louis, for $16 million.
U.S.
Metals, which owns a seven-acre, 180,000-square-foot metal distribution
plant, reported 2004 revenues of $40 million. U.S. Metals President
Richard Killebrew will remain with the company to manage daily operations.
U.S.
Metals specializes in cold-rolled and coated steels and operates
two cut-to-length lines, processing approximately 60,000 tons of
steel annually. Primary customers are appliance makers, the construction
industry and metal shelving manufacturers.
“U.S.
Metals has a solid customer base, diverse product mix and broad
geographic coverage that gives us some significant synergies,”
says Esmark President James Bouchard.
Copper
Distributors Off to a Slow Start
With the data in for the first two months of the year, total service
center shipments of copper and copper alloy products are down by
3.6 percent vs. the same period last year, according to the latest
figures from the Copper and Brass Servicenter Association, Wayne,
Pa.
February
shipments this year were 7.1 percent behind those of February 2004.
Compared to the previous month, total February copper shipments
declined 4.9 percent, while alloy shipments dipped 3.5 percent.
Though
service center shipments of red metals overall declined 4.2 percent
in February, vs. the previous month, the average daily shipping
rate actually increased by 1.4 percent, CBSA officials noted.
Total
alloy shipments year-to-date were down 5.0 percent due primarily
to significant drops in shipments of 300 series rod and bar and
alloy sheet, while alloy sheet other than 200 series saw a month-to-month
gain of 0.9 percent.
CBSA
officials attribute the year’s slow start to service centers
that are still working off high inventories from the last quarter
of 2004. Reports from brass mills suggest that, while they are not
“booming,” they are doing better than their distributor
customers.
Briefs
McNichols
Co., Tampa, Fla., has relocated its Marietta, Ga., service center
to an expanded 47,000-square-foot facility in Kennesaw, Ga. The
expansion allows McNichols to provide a larger selection of hole
products to customers from its Atlanta-area branch.
Quality
Metals, a steel service center in St. Paul, Minn., has purchased
a 5/16ths-inch high-speed looping-type cut-to-length line from Red
Bud Industries. The 72-inch-wide line will allow material up to
5/16ths-inch thick to run in a deep loop at up to 400 feet per minute
without slippage. The line can handle critical-surface material
as light as 28 gauge, from coils up to 25 tons.
Marmon/Keystone
Corp. has introduced a new Value Added Software program that will
implement the functions of processing, managing and accounting for
value-added parts more efficiently. Tom Brenneis, value added manager,
explains, “As our value-added business became more complex,
we determined that a centralized, easy to operate system was necessary.
The new software allows M/K’s marketing staff, the customer,
mill and outside processors to access real-time data simultaneously.”
The company hopes to achieve major savings in time and labor among
all participants. The system has already reduced cycle time of daily
inventory, order entry transactions and invoicing issues.
Keystone
Specialty Metals Inc., Bensalem, Pa., has installed a PMI Accur-Cut
shear table, which allows the stainless steel flat bar distributor
to produce tight tolerances on the width of sheared and edged flat
bar from 1/8th to 1/4-inch thick. The shear will also help the company
cut lead times on bar processing orders.
United
Steelworkers of America-represented employees of Powerlasers Ltd.,
Concorde, Ontario, voted to accept a collective bargaining agreement
that ended a three-week lockout at the plant. The contract contains
job security provisions, wage increases and a variable compensation
plan. Sixty Steelworkers were locked out Feb. 10 after talks broke
down over wages, pensions and other issues. The union was certified
at Powerlasers last summer. The contract goes into effect upon ratification
and remains in place through Feb. 1, 2008. Powerlasers is a supplier
of laser-welded blanks and integrated laser processing systems.
iMetals
Inc., a distributor of carbon and specialty steel bar products based
in Aurora, Ill., has selected the Axiom Enterprise Resource Management
System as its new business system. The software developer is AXIS
Computer Systems Inc. Jason Fowler, CEO of iMetals, says Axiom integrates
all of the company’s business processes around a single base
of information, and should help iMetals gain the efficiencies needed
to support continued growth in sales and customer service.
Del
Metals, a general line and flat-rolled service center in Toronto,
has chosen Invera’s Stratix metals industry enterprise software
product to manage its metal price book, shop floor production recording
and automated mill test certificate generation.
Russel
Metals reported that its chief executive officer and other senior
executives exercised their stock options recently. Edward “Bud”
Siegel, CEO, exercised options and sold 225,000 common shares. He
holds 800,000 shares worth approximately Cdn $14.2 million. Siegel
has 375,000 common share options remaining after the exercise. Brian
R. Hedges, chief financial officer, exercised options and sold 95,000
common shares. After giving effect to the trade, Hedges holds 100,000
shares worth Cdn $1.8 million and 170,000 common share options.
Berlin
Metals LLC, Hammond, Ind., a steel distributor and processor, has
earned an ISO/TS 16949 Quality Management System certificate and
an ISO 9001:2000 Quality Management System certificate.
The
Material Works, a steel toll processor in Red Bud, Ill, has earned
certification to ISO 9001:2000 quality standards.
Obituary:
Maurice Horwitz
Maurice Horwitz, 96, former president of Marmon/Keystone Corp.,
Butler, Pa., died March 26 at his winter home in Arizona.
Mr.
Horwitz, son of the founder of Keystone Pipe & Supply, later
renamed Marmon/Keystone, was president of the company for 25 years
when he retired in 1978.
“Maury
was associated with our company for some 50 years and will always
be respected and admired for his contributions to the metals industry,”
said Marmon/Keystone President Norman E. Gottschalk Jr.
Mr.
Horwitz had served as a director of the National Association of
Steel Pipe Distributors. He was a director of the United Way in
Butler, Pa., was former president and chairman of a community health
center, a YMCA trustee and former president of Congregation of B’Nai
Abraham.
Survivors
include his wife, Janice; two sons, Tem and Henry; and eight grandchildren.
People
Chicago Tube and Iron Co. has appointed Dan Deffenbaugh as director
of marketing for stainless and aluminum products. He is responsible
for growing stainless and aluminum sales throughout CTI. Deffenbaugh
has 27 years of experience in the steel industry, most recently
as a regional sales manager for Tubular Steel Inc., St. Louis. Before
that, he was with Transtar Metals in Atlanta, as director of tubular
products.
Robert
Haas has been promoted to vice president of sales at Main Steel
Polishing Co., Tinton Falls, N.J. Haas, who has been with Main Steel
for 13 years, has served as both a regional sales manager and national
sales manager. David P. Yundt was promoted to vice president and
director of stainless products. Yundt, who has managed stainless
products since he joined the company in 1993, has 29 years of experience
with stainless sales and marketing. He will direct the growth of
stainless steel flat-roll through mill-direct processing.
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