A Rutgers University research project supported a New Jersey service center founder’s plans to reinvest in his business.

By Dan Markham,
Senior Editor

• Quick Facts
  

Sydney Sussman’s entrance into the steel business was triggered by economics. Or, as he puts it, “my absence of economics.”

Sussman was a 30-year-old husband and father of three struggling to make a living in the mid-1950s. On a suggestion from a friend, he bought some steel with the intent of reselling it.

“What I made on commission in my first steel sale was twice what I would have made in a year in what I was doing,” Sussman recalls. “I couldn’t spell steel, but I was in the business.”

The following year, 1957, he borrowed $10,000 and some office space from his father-in-law, rented a typewriter and purchased a used desk. Certified Steel was born. “Here we are in the year 2006, and I’m still in it.”

For Sussman and Certified Steel, however, it was a decision a decade ago that set the course for the company’s current success. In 1996, the business was at a critical juncture. Certified Steel had become a $20 million service center, but one badly in need of some reinvestment. Current President Diane Kane describes the dilapidated building that housed the company’s equipment and inventory as a place “where it rained heavier inside than it did outside.”

Sussman needed to make a serious decision about the direction of the Certified Steel, and none of his options looked terribly enticing. He could sell it, he could liquidate it or he could opt for an aggressive growth strategy that would cost a lot of money. A love of the steel business and a sense of obligation to employees who helped build the company left the third option the only choice.

“There was no way I could look at 90 or 100 people and say ‘I got my bundle, you’re fired,’” says Sussman, whose focus had shifted from his core business to other ventures at the time. “So the best choice was to rebuild it, remake it.”

In a fortuitous stroke, about the same time Sussman was mulling the future of his company, Certified Steel was contacted by Rutgers University to participate in a program for its MBA students. The university offered 14 students to do market research for the company as part of their class work.

“It ended up being like a consulting project,” says Dante Germano, Certified Steel’s chief financial operator, but one that cost peanuts compared to the fees a regular consulting firm would charge.

“They did all sorts of research on our industry and our market. They come down and interviewed us and analyzed the data to look at specifically how we lined up in our market,” Germano adds

What they determined was that Certified Steel remained a “viable business with room for growth and potential,” Kane says, “just not in the building we had.”

“We got a very comprehensive analysis of the issues,” Sussman says. But for the company founder, the most important aspect of the study was its confirmation of his desire to reinvest in the business. “All I needed was a green light that I wasn’t crazy.”

Satisfied with this second opinion, Sussman launched Certified Steel on a $16 million growth plan, starting with the purchase of land for construction of a new facility. He eventually settled on a nearby site in Hamilton, N.J.

In 1998, Certified Steel moved into a new 250,000-square-foot building just a few miles from its original Trenton location. In 2002, the company expanded again, adding 80,000 more feet of space to its now state-of-the-art facility.

With the physical expansion came capability additions as well. Certified Steel now processes and distributes sheet and coil products, hot-rolled plate, angles, channels, beams and rebar.

Certified Steel operates two leveling lines—a Herr-Voss line that handles coils up to one-half inch thick, from 36 to 96 inches wide, weighing up to 80,000 pounds; and a B&K line from Cooper, Weymouth & Peterson for lighter-gauge material, 30 to 96 inches wide, from 0.071 to 0.375 inch thick.

Certified also offers plate cutting services with four burning units, including a plasma unit that can handle material up to one-half inch thick, 120 inches wide and 480 inches long. Its three multi-head torch cutting machines can cut material up to 10 inches thick. It also operates seven cut-off saws, a hydraulic shear and rebar shear. The company also provides toll processing upon request.

Today, the still-independently owned Certified Steel does about $80 million in annual business from its home office in Lawrenceville, N.J. It maintains sales offices in northern New Jersey and on Long Island, N.Y.

The 120-person company sells roughly 120,000 tons of steel per year to an estimated 1,100 customers within a 125-mile radius of its southern New Jersey headquarters. It buys much of its steel from Gerdau Ameristeel.

At the conclusion of the initial expansion, Sussman turned over the day-to-day operations to Kane, who started with the company in 1978 as an inventory control clerk. The 79-year-old Sussman says Kane has had no trouble representing Certified Steel in the male-dominated metals industry.

“She’s done a marvelous job,” working her way up through the company. “She’s extremely respected in the industry,” says Sussman, who now serves as CEO.