Dennen Joins Forces with SteelSalvor
SteelSalvor, the Web-based steel auction and marketing site, and Dennen Steel Corp., a $100 million dollar U.S. service center, have announced a strategic partnership to make the distribution channel for non-prime steel more profitable, facilitate easier access to metals supply and address industry consolidation issues. As part of the agreement, Dennen Steel has taken an equity stake in the emerging Internet company and will leverage its relationships with steel producers to introduce the benefits of SteelSalvor to the mill sector.

Dennen’s investment validates the belief that SteelSalvor’s model for metals distribution will increase the value of excess and secondary steel materials for steel mills and their customers, says Scott Shapiro, CEO of SteelSalvor. By using SteelSalvor as a distribution channel, steel mills can increase their selling prices and reduce their administrative costs. Buyers or distributors of metals will benefit by gaining easier access to greater supply. SteelSalvor’s auction format, combined with its proprietary database, can be further used to simplify and facilitate agreements with mills.

“Excess and secondary steel is a huge, over $5 billion market that is stymied by traditional and exclusive distribution methods that are becoming increasingly less effective,” says Shapiro. “We see our business model as being disruptive to the status quo, but strategic to future success in this industry. It expands the potential universe of buyers and sellers and offers non-exclusive access to supply.”

SteelSalvor hopes that partnering with Dennen will give it more credibility with steel producers. “Together, we can facilitate a major industry distribution channel shift to address the changing market landscape,” Shapiro adds.

According to SteelSalvor, excess and secondary steel may represent as much as 20 percent of the steel market, depending on market conditions, with an estimated potential value of $5 billion to $13 billion annually. In this sizable non-prime steel market, trends such as market consolidation and shrinking North American steel consumption are affecting competitiveness. Mill consolidation is limiting access to supply and reducing buying power for many participants. Distributor consolidation is making it difficult for independent operators to compete effectively.

“The steel industry is at a critical juncture, and we’ll better serve our customers and suppliers long-term by partnering with SteelSalvor,” says Peter Dennen, senior vice president of Dennen Steel Corp., Grand Rapids, Mich. “We believe the steel industry is undergoing a natural evolution and will adapt as other industries have. For example, the music industry evolved with the digitization of recordings and the distribution shift from record stores to online downloading of songs. The SteelSalvor business model is consistent with our customer-centric philosophy of recognizing market needs and offering services to meet those needs. We believe that SteelSalvor is the future of distribution of excess and secondary steel and this partnership is the catalyst for change.”

Since its inception in 2001, Shapiro says, SteelSalvor has grown rapidly and continues to gain traction in the steel market with key service centers, insurance organizations, manufacturers and steel mills. In 2005, the company claims record revenue growth of $22 million, doubling its 2004 results. In addition, SteelSalvor increased the amount of prime and secondary steel posted on the site for auction from 57,000 tons in 2004 to 116,000 tons in 2005.

SteelSalvor closed first-quarter 2006 on track to grow by 50 percent over 2005, and is on pace to sell nearly double the amount of steel sold through auction on the site in 2005, Shapiro says. A record 17,000 tons of steel was sold on the site in February 2006 alone.

“With a successful business model that has netted a nearly 100 percent rate of repeat customers,” Shapiro adds, “SteelSalvor has developed a system that effectively matches buyers and sellers using an efficient and convenient online forum, helping customers turn excess steel inventory into cash.”

Dennen would not quantify the size of his company’s stake in SteelSalvor, calling it “substantial,” but noted that it will have no immediate impact on Dennen Steel operations.

“Dennen Steel is not buying SteelSalvor, or vice versa. They will run as completely separate entities. Dennen was a buyer and seller on SteelSalvor before this deal, and will continue to buy and sell on SteelSalvor where it makes sense. But Dennen is not getting out of its traditional service center business. This is just another avenue for Dennen to cement itself into the future of the industry,” he says.

“The steel mills control 75 percent of the steel that gets shipped in the United States, and we want to be their distribution partner,” concludes Shapiro. “We can add value in doing that, and Dennen will help us.”

Obituary: Bruce Farmer, Farmer’s Copper
The copper distribution industry lost a leader and a friend June 28 with the death of Farmer’s Copper Ltd. founder and CEO Bruce J. Farmer, Sr., 78, in Galveston, Texas.

Mr. Farmer was born Aug. 5, 1927, in Galveston to Leslie George Farmer Sr. and Mary Elizabeth Robertson Farmer. He joined the U.S. Merchant Marines and served during World War II. He returned to Galveston to complete high school and attend the University of Houston. He married Robbie Jeanette Hudler, who preceded him in death.

After working for the family business, Farmer’s Marine Copper Works (which became Farmer’s Alloy Fabricating), Bruce Farmer founded Farmer’s Copper & Industrial Supply in 1980. He built it into one of the largest copper and brass service centers in the country. He had a significant influence on the red metals distribution industry, serving as president of the Copper and Brass Servicenter Association from 1998-2000.

“Bruce was considered a statesman in the industry and association. He was so highly regarded by suppliers and customers, and even competitors,” said Frank Brown, CBSA executive vice president.

With a significant distributor sales program in place, he worked closely with many of the CBSA members.

“We sell quite a bit to the distributors around the country,” Bruce Farmer told Metal Center News earlier this year. “We kind of help each other. A lot of the distributors are members of the CBSA. We’re competitors, but we’re friendly competitors.”

He is survived by his wife of eight years, Linda Wells Farmer; sons Bruce J. Farmer, Jr., Robert Wayne Farmer, Richard Lee Farmer and Douglas Keith Farmer; daughters Lisa Renee Barrow and Jo Lin Brownlee; and numerous grandchildren and great-grandchildren.

Sons Robert and Richard serve as co-presidents of Farmer’s Copper. Keith and Bruce Jr. are vice-presidents in the family business.

Olympic Buys Out GSP Joint Venture
A subsidiary of Olympic Steel Inc., Cleveland, will acquire the remaining joint venture interest in GSP LLC from The Goss Group Inc.

The GSP joint venture was organized in 2002 to support the flat-rolled steel requirements of the automotive industry as a Michigan Minority Business Enterprise. Following the acquisition, a subsidiary of Olympic Steel will own 100 percent of GSP, which will no longer qualify as a Michigan Minority Business Enterprise.

Olympic Steel intends to assess the operations of GSP in the near term. The purchase price was $100,000.

Olympic Steel also completed the purchase of Tinsley Group-PS&W Inc., an indirect subsidiary of English company Eliza Tinsley Group PLC. PS&W is a full service fabricating company that utilizes burning, forming, machining and painting equipment to produce a wide variety of fabrications for large original equipment manufacturers of heavy construction equipment.

Platinum Equity Adds
Metals Supply Co. to Fold
Platinum Equity has expanded its reach into the service center sector with the acquisition of Metals Supply Co. Ltd. The acquisition follows the May purchase of PNA Group.

Houston-based Metals Supply Co. is a $100 million steel service center with a sizable presence in Texas and surrounding states. It provides structural carbon steel products to commercial and industrial steel fabricators, metal building manufacturers, third-party distributors and other customers.

“Metals Supply Co. has established a strong regional presence in Texas and the surrounding states, and we think it will be a terrific complement to the existing three businesses that make up PNA Group,” says Jacob Kotzubei, senior vice president for mergers and acquisitions at Platinum Equity. “We intend to integrate MSC into PNA Group.”

In May, Platinum Equity acquired Atlanta-based PNA Group, which processes steel and distributes it to fabricators, manufacturers and distributors throughout the United States. PNA Group consists of Feralloy in Chicago, Delta Steel in Houston and Infra-Metals in Atlanta.

Financial terms of the deals were not disclosed.

Platinum Equity, Beverly Hills, Calif., specializes in the merger, acquisition and operation of a broad range of companies.

Samuel Manu-Tech Buys Advanced Tubing
Samuel Manu-Tech Inc., Toronto, has acquired Advanced Tubing Technologies Inc., a manufacturer of tight-tolerance structural tubing components and assemblies for the all-terrain vehicle, powersports and transportation industries in North America. This acquisition expands Samuel Manu-Tech’s existing capabilities in robotic welding and steel tube bending.

Founded in 1997, Advanced Tubing Technologies maintains a 120,000-square-foot facility in Statesville, N.C., and reported sales of $21 million in 2005.
The transaction is structured as a 100 percent stock purchase. The purchase price is approximately $18.2 million.

“We are very pleased to welcome Tube.tec and its dedicated employees to our growing family of metal processing businesses,” says SMT Chief Executive Officer Mark Samuel. “Tube.tec has demonstrated innovation and expertise in value-added manufacturing and we expect them to thrive within our organization.”

Briefs
Coil Steels Processing, Brisbane, Australia, has installed a cut-to-length/blanking line from Red Bud Industries, Red Bud, Ill. The line incorporates Red Bud’s grip feed measuring system allowing the line to produce blanks with plus/minus 0.127 millimeter part length repeatability straight from coil.
Red Bud will host an open house to showcase its stretcher leveling and heavy-gauge cut-to-length technology at McNeilus Steel in Dodge Center, Minn., the week of July 24. To arrange a tour, contact Dawn Walker at 800-851-4612 or visit www.redbudindustries.com.

UK-based Falcon Steel Ltd. has ordered a 111,000-ton color coating line and 150,000-ton hot-dipped galvanizing line from SAS Group. The line will be built on a 10-acre site in Newport, South Wales, UK. Construction on the coating line is expected to begin in September and be completed in April 2007. The galvanized line will then be installed and is expected to be completed in July 2008. Installation of a cold mill and a push-pull pickling line will complete the company’s five-year growth plan in the UK.

National Bronze & Metals Inc. President Michael Greathead was selected as one of five finalists for the Ernst & Young Entrepreneur of the Year Award in the manufacturing and distribution category. The award honors entrepreneurs whose ingenuity, hard work and perseverance have created and sustained successful, growing business ventures.

Hyco Metals & Supply Co. Inc. will install a new SMS Demag Ltd. PRO-ECO slitting line at its Empire Steel & Processing facility in Chino, Calif. The line will have a capacity of 0.250 inch by 72 inches and can handle 50,000-pound coils at speeds up to 1,200 feet per minute.

Bushwick Metals, Butler, Pa., has completed installation of a new ERP computer system. The installation at Bushwick, an affiliate of Marmon/Keystone Corp., was completed without disruption to daily operations.

Lafayette Steel Sales, Indianapolis, has ordered a turret head coil slitting line with automatic slit coil packaging from Braner USA, Schiller Park, Ill.. The new line will process 60,000-pound, 72-inch-wide, hot- and cold-rolled coils in gauges to 0.250 inch at line speeds of up to 1,000 feet per minute.

Amtex Steel, University Park, Ill., also has ordered a turret head coil slitting line from Braner USA . The slitting line will process 72-inch-wide, 60,000 pounds coils in gauges to 0.250-inch at speeds up to 1,000 feet per minute.

People
Steel Technologies Inc., Louisville, Ky., has named Roger D. Shannon as its new chief financial officer. Shannon will join Steel Technologies on July 24. Shannon previously was employed with Brown-Forman Corp. as assistant treasurer and assistant vice president. He replaces Joe Bellino, who was hired as executive vice president and CFO at Kaiser Aluminum.

Robert M. Kaniecki has retired as executive vice president-administration at Marmon/Keystone Corp., Butler, Pa. Kaniecki will continue to serve as a consultant and special assistant to President Norman E. Gottschalk Jr. Kaniecki spent 30 years with the company, helping oversee relocation, expansion and construction of 25 service centers and sales offices. Also, David T. Rosson was promoted to account manager at Marmon/Keystone’s Denver service center. He will be responsible for southern Colorado, New Mexico and west Texas.

O’Neal Steel, Birmingham, Ala., has promoted Blake Bannon to district manager at its Waterloo, Iowa, operation. Since joining O’Neal in 1991, Bannon has worked in both inside and outside sales, has served as sales manager and was most recently assistant district manager in Waterloo.

Mark G. Borland has been named national director of marketing at Tamarac, Fla.-based Future Metals, an affiliate of Marmon/Keystone Corp. Borland had been national marketing manager-stainless and aluminum at the company’s Chicago service center.

Ranger Steel Supply has named Keith Gremp general manager of its new distribution center and sales office in Tulsa, Okla. Gremp had been raw materials manager for the utilities division at Valmont Industries.

Correction
In MCN’s June 2006 Directory of Master Distributors, Edgen Corp. should have been listed at 18444 Highland Road, Baton Rouge, La. 70809; telephone, 225-756-9868; e-mail, jeff.bikshorn@edgencorp.com; Web site, www.edgencorp.com.

They offer carbon steel, carbon alloys, stainless steel pipe and tube, and fittings and flanges. Their divisions—ProMetals, Sisco Service Industrial Supply Co., Thomas Pipe and Radnor Alloys—now operate as Edgen Corp.