“No one is successful who doesn’t have a passion for the business,” asserts Wayne Bassett, president and chief executive officer of Samuel, Son & Co., Limited, of Mississauga, Ontario.

The 60-year-old Bassett has spent nearly his entire career helping to grow the privately owned company into one of the top five metals distributors in North America. In recognition of his passionate personal approach to management and his company’s long record of strong growth and profitability, Metal Center News has selected Wayne Bassett as the 2007 Service Center Executive of the Year.

Each year, MCN bestows this honor on an individual whose career and business strategies represent a model for the rest of the industry. Bassett has distinguished himself through his high-energy leadership style, his financial acumen, his communication skills and his ability to cultivate close relationships with suppliers, customers and employees, alike.

Since 1974 when a young Bassett joined its finance department, Samuel, Son & Co., Limited, has navigated an enormous amount of expansion and change, growing from around $50 million to about $2.4 billion in 2007 annual sales. Today, it’s a huge organization encompassing 95 facilities across seven Canadian provinces and 13 American states. Its 4,850 employees sell the full range of metal products and offer extensive processing and distribution services.

Part of Canada’s dominant service center duo, Samuel and its chief rival Russel Metals, also based in Mississauga, command a combined market share of roughly half the entire Canadian metals distribution business.

Samuel regularly benchmarks its performance against the industry’s top service centers, Bassett says, and measures up quite favorably. “We want to consistently be among the top four or five distributors in North America profit- wise. We also want to grow at least as fast as the average of the top 10 companies in the industry. Samuel, Son & Co. has perhaps the strongest balance sheet in the industry, with very little debt.”

Beyond the size and scope of its business, what makes Samuel unusual is its long history of family ownership. Founded in 1855 as a wholesale metal and hardware supplier, the company is now in its fifth generation of family management, headed up by Chairman Mark Samuel (see sidebar).

Mark’s father and long-time company patriarch, Ernest, led the company for 38 years prior to his untimely death in 2000. Under his leadership, the company opened and acquired numerous facilities throughout Canada and the United States.

In 1985, three of the company’s manufacturing divisions were combined to create a new company—Samuel Manu-Tech Inc.—which was taken public on the Toronto Stock Exchange. Samuel, Son & Co. retains a 72 percent stake in Manu-Tech. Combined, the two companies have annual sales of about $3.3 billion. Both are overseen by a board of directors that includes Mark Samuel, his mother and sisters, Bassett and four outside directors.

Today, management of the companies is a collaborative effort between Bassett, who is Samuel, Son & Co.’s president and CEO, and Mark, who holds the titles of Samuel Manu-Tech CEO and chairman of Samuel’s board. Bassett is the first nonfamily member ever to head Samuel, Son & Co.

Following the lead set by his mentor Ernie Samuel, Bassett has steered the company using an aggressive growth-through-acquisition strategy with an emphasis on expansion in the United States, reducing the company’s dependence on the smaller Canadian market.

“When the [Canada-U.S.] free trade agreement was signed in the late 1980s, Ernie Samuel directed us to enter the U.S. market. In 1989 we opened our first branch in Buffalo, N.Y. Today, the U.S. generates more than 50 percent of our business,” says Bassett.

Samuel is working to acquire a strong presence in all the major U.S. regions. So far it has 25 facilities across the country, together with 18 Samuel Manu-Tech facilities, and plans further expansion, notably on the West Coast and in the Southeast. In 2006, Samuel completed six acquisitions, and by the end of 2007 will have added four or five more. Its most recent acquisition was the purchase of the Engineered Metals Group from ESCO Corp., with branches in Denver, Los Angeles, Portland and Hayward, Calif.

Another one of Samuel’s key strategic objectives is to be diverse in terms of product as well as geography. Each geographic expansion allows for product expansion as, over time, the company can migrate its full product mix to the new locations. “The strategy is to carry the entire basket of Samuel products all through the organization. Right now we are looking for acquisitions all over the U.S.,” Bassett says, and candidates are plentiful. “Apparently, there are a lot of companies who look at the changes in the industry and think it’s time to sell.”

Samuel’s international ventures are not limited to the United States. Earlier this year it opened a 23,000-square-foot aerospace metals facility near Birmingham, England, as well as a sales office in Beijing, China.

Samuel, Son & Co. and Samuel Manu-Tech both benefit from several strategic synergies. As board members, Bassett and Mark Samuel provide the link between the two companies. “Mark and I both attend the financial reviews of both companies and sit on the acquisition committees of both companies,” Bassett explains. “The two companies help each other in many ways including leveraging our metal purchases, developing training programs, policies and procedures and pooled insurance, pension and other benefits. We also have a joint marketing committee to ensure that we take advantage of all synergies in our sales efforts.”

Running such a large private company has both advantages and drawbacks, Bassett admits. “One of the difficulties of being private is that we are managing for profit, not for the share price of the company. This forces us to be more careful in acquisitions. We have not made some acquisitions that we would have liked to because they sold at premiums in excess of what we were willing to pay.”

On the other hand, Samuel is more nimble than most publicly held competitors “who have to manage the company to make the analysts happy.” Samuel is free to think both short- and long-term, Bassett notes. “Ernie Samuel loved to see the company grow and was prepared to take calculated risks to make that happen. Before he passed away, we were able to make decisions with just one phone call. Today, Ernie’s wife and three children are the shareholders. We have a very strong board that is extremely supportive of our activities and can still make decisions quickly. This gives us a definite advantage in growing the business.”

Bassett started his career in finance, but was soon called on to work as a troubleshooter and help turn around struggling acquisitions. Along the way he gained valuable operations experience as he ran the branches during their transitions. He believes that each branch should be empowered to run autonomously, but with the support of corporate purchasing and marketing departments for each product area.

“The role of purchasing and marketing is to set up corporate programs with our suppliers that can be used by all the branches, to lead in the development of new products and services, and to ensure that we are meeting our commitments to our suppliers,” Bassett says.

Samuel’s size and financial strength allow it to take advantage of buying opportunities when they arise. It always purchases domestically if it can, but does source globally when necessary. “It’s critical that we provide our customers with the most cost-effective material possible. In some cases, we need to import material to meet tough customer specifications. Our trading company, Samuel International, is involved in importing and exporting metal products. This helps us to be alert to what is happening in the world market,” Bassett says.

Samuel believes its homegrown computer system, developed and refined in-house over the years, gives the company a major strategic advantage in handling information on purchasing, inventory management, value-added processing and other functions. “It gives us the necessary links to share inventory between branches, schedule production centrally, review inventory positions on a corporate basis and cost each order in a detailed way. It also allows us to assess customer profitability,” Bassett says.

Over time, acquired companies are migrated to Samuel’s system. Keeping an open mind, if an acquired company uses a better method, their best practice is adopted and incorporated into Samuel’s system.

Samuel also operates its own trucking company, Kim-Tam Truck Leasing Ltd., which handles the majority of its inbound and outbound freight in Canada and the midwestern U.S. with a fleet of about 180 trucks and 250 trailers. Currently, it is expanding operations into the northeastern U.S. “We believe that having our own trucking company provides improved service to our customers,” Bassett noted. “We also run it as a profit center, and it adds to our overall profitability. With the increased cost of transportation, we are moving much of our inbound transportation to rail and barge, however.”

Bassett credits Samuel’s talented and dedicated management team and its combination of union and nonunion workers with much of the company’s success. As a family-owned enterprise, Samuel takes a more paternal attitude toward its employees than many companies of its size. “We are very proud of the long tenure of most employees. We are dedicated to creating an environment that not only attracts employees, but makes them want to spend their entire career with Samuel,” Bassett says.

Samuel strives to recognize and nurture talented individuals. Its performance evaluation system gives all employees a thorough review of their accomplishments, sets objectives for the future and details the training they need to improve in their current position or to move up in the company.

“We have a four-year Samuel Way leadership training program for all employees at the supervisory level or above. We have a talent development program that singles out individuals who have the opportunity to be top performers in the future. We believe in hiring from within if at all possible and are quite prepared to move employees between branches or divisions,” Bassett says.

Turnover at the senior management level is nil, he adds. “Virtually no one ever leaves before retirement. I believe that’s a cultural thing. The family owners really care. We have a real entrepreneurial spirit in the place.”

In a company as large as Samuel, communication is critical. Bassett uses quarterly meetings of his Advisory Committee to keep his finger on the company’s pulse. Besides Bassett and Mark Samuel, the committee is made up of 15 key executives—not necessarily just the most senior managers, but also younger employees who bring a different perspective to the discussion.

Once a year, the company brings together 150 key contributors to a three-day management conference. The attendees are split into breakout groups to compare notes on various product categories and functional areas such as finance or operations. The Advisory Committee uses their feedback to continually update and improve the company’s strategic plan.

Bassett travels extensively, visiting as many branches as possible each year and making himself accessible to every employee—no small task with over 90locations. “When we redo the strategic plan every three years, I visit every branch to explain it to them. I believe it’s critical that they understand exactly where we are going,” he says.

Bassett also brings his personal touch to relationships with top suppliers, whom he truly considers partners. “We believe in having supply agreements with all our key suppliers. By working closely with them, we can find ways to make the relationship more profitable for both of us.”

Profitability among Canadian companies has been hurt recently by the dramatic shift in the exchange rate. From the mid 1990s until early 2005, the value of the Canadian dollar was low relative to the U.S. dollar. Canadian manufacturers benefited from a significant cost advantage and prospered as they exported two-thirds of their nation’s manufactured goods to the United States. In the past two years, Canadian manufacturers have seen their advantage erode as the U.S. dollar weakened. The Canadian currency strengthened by over 20 percent in 2007 alone, actually exceeding the value of the U.S. dollar for a period in October and November.

“Canadian manufacturing cannot cope with a change of this magnitude, particularly when it happens so quickly. We are losing customers at an alarming rate as they move their businesses to the United States, Mexico and in some cases to Asia,” Bassett says.

Samuel is no exception, he notes. “Last year, Samuel Manu-Tech opened a major roll forming facility in Iuka, Miss., which is producing product formerly made in Ontario. We recently opened a major steel strapping facility in Heath, Ohio, and closed a major strapping facility in Scarborough, Ontario. We also opened a stainless steel tubing plant in Saltillo, Mexico, that is producing product that would have been made in Markham, Ontario.”

Competitive conditions are extremely tight in Samuel’s traditional Ontario heartland. “The majority of Canadian manufacturing is located in southern Ontario, and there are a limited number of customers. The competition there is tougher than in any other geographic region where we operate. With the strong Canadian dollar, we are also seeing quite an increase in competition from U.S. service centers,” he says.

Ten years ago, Bassett notes, 60 percent of Samuel’s profit came from Ontario. Today that figure is less than 15 percent. Because Samuel does about half its business on each side of the border, it has a natural hedge against the competitive effects of currency shifts and is no longer as reliant on the Ontario market.

Samuel’s expansion into Western Canada has also offset some of its erosion in Ontario. Servicing customers in the energy, infrastructure, truck manufacturing, agriculture and mining markets in the western provinces now accounts for more than 10 percent of Samuel’s overall sales.

One valuable byproduct of acquiring companies is that their most talented senior managers usually come along as part of the deal. “We’ve been able to infuse new blood into the organization through acquisitions,” Bassett says.

Two prime examples are Ted Doyle, now president of Samuel’s Flat Rolled Products Division, and Al Bromley, president of the Eastern USA division. Doyle started his career in the steel industry with Canadian steelmaker Stelco in 1966. In 1972, he and a partner started up a cold-finished bar operation, which was purchased by Samuel two years later. Bromley started his career after college in 1974 with a sales job at Pitt Steel. He left there in 1982 to work for Casteel, which was purchased by Samuel in 1983. Both have worked their way up through the ranks to serve as Bassett’s right-hand men.

Doyle and Bromley both express admiration for their boss’s knowledge and intensity, sharing the following observations. “We’re awed by his understanding of the industry. He has so much energy, it’s hard to keep up with him. He’s brilliant with numbers; he often has the calculation done in his head before we can find a calculator. He’s an excellent coach; he knows how to ask the right questions and how to think outside the box. He makes employees feel valued. There are no closed doors; if you have an idea, you have the opportunity to present it.”

On a personal level, Bassett brings a tremendous work ethic and a great sense or urgency to the office every day, and expects his senior managers to live the business just like he does, Doyle adds. “He holds your feet to the fire. He’s a pretty demanding guy. But he also is very fair. If you take on a challenge, he’ll back you to the very end.”

Bassett recalls one important lesson from his mentor Ernie Samuel. “His belief was to let people do their own thing. You could make a colossal screw-up and he’d ask you two questions: How are you going to fix it? And what did you learn from it? He allowed you to learn from your mistakes.”

Bassett has been an able steward of the Samuel family’s beliefs and values, which are spelled out in the company’s mission statement:

• We want to develop lasting, mutually beneficial relationships with our customers and suppliers.
• Teamwork makes us better.
• Continuous improvement is vital to our success.
• Entrepreneurial spirit is an essential part of our culture.
• Our people are the source of our strength, vitality and reputation.
• Being socially aware and responsible is central to our idea of business success.
• Always doing the right thing. Never compromising our integrity.

Samuel’s conservative, old-fashioned family values are even reflected in the company’s dress code—strictly suits and ties. At Samuel, be it attire or attitude, there’s no such thing as business casual.

Canadian Collaboration Hits Close to Home

Mark Samuel, the 44-year-old chairman of family-owned Samuel, Son & Co., Limited, and its publicly traded sister company Samuel Manu-Tech, takes a lot of pride in his family’s 152-year legacy of ownership.

He appreciates how rare and unlikely it is for a company to survive to its fifth generation of family management. “Some of it is good planning and some of it is good luck,” he admits. Not only must the company navigate the challenges of a competitive commercial marketplace year after year, but each generation needs family members who have both the aptitude and interest to succeed the previous generation. “There were a couple of generations there where we only had one individual available to move the company forward,” Samuel noted.

Mark’s father, Ernest Samuel, was the long-time patriarch and leader of the family business, with Wayne Bassett reporting to him as head of the Samuel, Son & Co. distribution business, and Mark reporting to him as head of the Samuel Manu-Tech manufacturing business. Under Ernie’s leadership, the companies experienced explosive growth, from about $6 million when he took over in 1962 to $2 billion when he tragically died in 2000 from injuries sustained in a boating accident.

Today, management of the company is a collaborative effort between Bassett, Samuel, Son & Co.’s president and CEO, and Mark, who holds the titles of Samuel Manu-Tech CEO and chairman of Samuel’s board. Upon Ernie’s death, the company formalized its board to include Mark and Wayne, five family members including Mark’s mother Elizabeth, and four outside directors who bring additional expertise and objectivity to the deliberations.

“In terms of philosophy, we’ve been a relatively conservative company. We’ve rarely bet the farm, but we’ve always been focused on growth. So it’s a growth-oriented philosophy, but not growth at any cost. We’d rather grow the bottom line than the top line,” says Mark, who holds a degree from Harvard University.

Pointing to an upcoming trip in which he and Bassett planned to visit Samuel facilities in nine different cities over just four days, he added, “It’s a grind, but also a great opportunity to manage while walking around, listen to the issues directly, and to express the company’s values firsthand.

“The plan is really a consultation between Wayne and myself in terms of the overall strategy of the company, as approved by our board. For me to be effective in that role, to both interpret issues for the board and also to assist Wayne, I feel I need to remain current on the business.”

With over $3.3 billion in 2007 revenues, Samuel is among the largest family-owned enterprises of any type in North America, and is among the top five companies—public or private—in the North American metals distribution market.

Mark Samuel firmly believes that the benefits of private ownership far outweigh the drawbacks. “It certainly poses some challenges. We don’t have the ready access to cash that some of our competitors do. But that’s not really a problem given our strategy of growth through value-investing,” he says. “We don’t have to be as focused on quarterly results, and we drill that down to our management team so they are always thinking long-term about what’s right for the business.”

He expresses deep respect for Bassett’s financial and management abilities, noting that he started in the company’s accounting department in 1974 and has spent nearly his whole career at Samuel. “He grew up with the organization and the organization grew up with him. He is very good counsel to both the company and the family. We’ve put decades of trust in him.”

The Samuels have never had any qualms about handing Bassett the keys to the family business. “In fact, it’s a model we believe in. We’ve always believed that you have to delegate authority and empower people. Wayne won’t be with us forever; there will come a day when he retires. But hopefully not soon.”

Samuel’s sixth generation is waiting in the wings, but not quite ready for the big stage yet. Mark and his sisters have five children ranging in age from 4 to 16. “We’d like to believe that what we have put in place—the executive model and board structure—will allow for the continued success of the company, and for family members in the next generation to be as involved as their talents and interests dictate.”

He expects Samuel to remain a family firm for a long time to come. “We enjoy being a family business. We appreciate the way that the values of the business reflect the values of the family, and vice versa. It’s great to see those values put into action.”

Kudos of All Kinds

Samuel, Son & Co., Limited, is widely respected by suppliers, customers, peers and even competitors.

Executives from IPSCO and Dofasco, two of Canada’s leading steel producers, have a long history of shared success with the company and its leader Wayne Bassett.

“Samuel is obviously a major force in the service center industry in North America, and certainly Canada, with a long history and a proud family legacy,” says IPSCO President John Tulloch. “Clearly, much of Samuel’s success has been due to Wayne’s effort and leadership. The Samuel family has a lot of confidence in him.

“I have worked closely with Wayne since 2000, with a lot of direct one-on-one interaction. Wayne’s operating style is very much hands-on. He actively manages the business rather than just being a caretaker, and obviously the results show that,” Tulloch says.

Brian Aranha, vice president, commercial at ArcelorMittal Dofasco in Hamilton, Ontario, notes that his company’s relationship with Samuel dates all the way back to Dofasco’s founding in 1912. Dofasco supplies steel to both Samuel’s steel distribution business and its Samuel Manu-Tech manufacturing arm. “They are a significant customer of Dofasco and we are also a customer of theirs. We do some processing with them.”

Samuel’s family orientation is at the heart of the company’s relationship with key suppliers and customers, he says. “Wayne Bassett personally takes the time to get to know his suppliers very well. The family ownership, over time, has promoted that type of approach within the company.”

Bassett’s knowledge is not just limited to the numbers. He’s very much in tune with what’s happening each day in the company’s operations, Aranha observes. “One hallmark of Wayne’s is he really knows the overall environment in which he’s operating. He steers the company very effectively in changing conditions.”

While Wayne is very approachable, he’s also a tough negotiator, and extremely competitive, he adds. “If you’re out with him on the golf course, he’ll have a bet going with you before you know it.”

Don Pether, retired president, CEO and chairman of Dofasco, has known Bassett for 20 years, as well as Ernie Samuel, the late company patriarch and Wayne’s mentor. “Wayne is an extremely driven individual. He is really the driver behind that whole business. I have seen that company grow tremendously under his leadership.”

Bassett’s business acumen goes well beyond his financial skills. He involves himself in all aspects of the company, and has been particularly adept at making acquisitions and blending them into the business, Pether notes.

He credits Bassett, along with Mark Samuel and other members of the company’s board, for their ability to achieve success while maintaining the legacy of family ownership. “The intensity of the drive to grow and excel is unlike any other service center business I have seen. And it filters down from Wayne to his action-oriented team,” Pether says.

He’s been a strong voice for the industry in the Metals Service Center Institute and other organizations, helping to keep the metals sector healthy, Pether adds.

Bob Weidner, president and CEO of MSCI, calls Bassett “the consummate metals business leader. He is strategic in his thought process, a visionary, and dedicated to ensuring the competitiveness of the North American manufacturing sector. From the moment I met Wayne, I knew that he shared a passion for this industry and was willing to embrace change in pursuit of excellence. He is truly one of MSCI’s greatest volunteer assets, and a real friend.”

Aidan Hughes, materials manager for Gates Corp.’s London, Ontario, operation, is a customer of Samuel’s. Gates manufactures steel pulleys for the automotive industry, buying coiled steel and circular blanks from Samuel.

“In the automotive industry, everybody has to be on top of their game. Samuel certainly does its part to make sure I get the product I need when I need it,” Hughes says. “Samuel is a strong, reputable supplier, and understands that everyone is in business to make a buck. They try to make sure that we’re competitive.”

Bassett commands the respect of even his biggest rival, Bud Siegel, president and CEO of Russel Metals. “I have known Wayne for many years and have found him to be highly professional in all our dealings. His firm has been the major competitor of Russel Metals in Canada, and we have been able to co-exist during both the good and bad times of this industry. This is a testament to Wayne’s leadership.”

Lunches Launch Long Career

In 1965, fresh out of high school where he excelled in math and science, Wayne Bassett went looking for a job as an accountant. Responding to an ad in the paper, he joined the firm of Pannel Kerr MacGillvray, where he articled (apprenticed) for five years in order to earn his C.A. (certified public accounting) degree. Among his clients was Samuel, Son & Co.

Bassett, who by that point had the entire staff reporting to him, had become unhappy with the firm’s profit sharing scheme. One day he decided to take the staff out to lunch, which as it turned out lasted for the rest of the day. The following day the partners of the firm docked everyone a day’s pay—whereupon Wayne quit. Showing up for his regular luncheon meeting with his client Samuel, he announced that he would not be buying lunch and, in fact, needed a job. Al Titus, Samuel’s vice president of finance, hired him on the spot.

His first job was as assistant controller in 1974. Over the next 20 years he worked his way up through the ranks until his appointment as president of Samuel, Son & Co., Limited, in 1995—the first non-Samuel president in 140 years of family ownership. Following Ernest Samuel’s death in 2000, he also assumed the CEO’s title.

Outside the company, Wayne has served actively on various committees and boards of the Metals Service Center Institute and its predecessor the Canadian Steel Service Center Institute, where he has advocated for a more professional approach to costing for industrywide profitability.

Wayne has also served on the advisory board of Ontario’s Sheridan College and acted as a lecturer on international business studies and global purchasing.

Wayne and his wife Judy, who will celebrate their 40th anniversary in March, count among their favorite civic and charitable endeavors support for the About Face Foundation, Big Sisters of Mississauga and Toronto’s Hospital for Sick Children.

Wayne and Judy have two adult children, daughter Cathy and son Jason, and five grandchildren.

Wayne lists among his hobbies fast cars, fast boats—and work.