| June 2007 |  |
| Service Center News | |
|
|
|
Heidtman Plans to Construct The facility will be capable of producing advanced and ultra-high-strength steels, including martensitic grades, in gauges from 0.015 to 0.090 inch, to a maximum width of 65 inches. “Our plan to build a new continuous annealing facility is a natural progression with higher strength steels, and reinforces our brand as the high strength experts,” says John Bates, chief executive officer. “It also underscores our commitment to our customers to remain at the cutting edge of technology. We see an emerging growth in demand for these products, especially in the automotive market.” Heidtman is looking at several Midwest locations for this project, which will cost approximately $225 million including downstream processing equipment. With an emphasis on logistical advantages, Heidtman is looking primarily at sites in Ohio, Michigan and Indiana, but has not ruled out other locations including the southern U.S. due to the growing number of automotive plants in that region. Russel’s Earnings, Revenues Down During First Quarter “For the second time since the peak in 2004, the price of steel dropped and, within a relatively short period of time, started to recover once the producers were able to bring supply in line with demand,” President and CEO Bud Siegel told investors and analysts during the company’s quarterly conference call. “Our operating profits as a percentage of revenues at 6.7 percent were above the previous 2005 low of 6.1 percent, which is positive as we always strive to have a higher EBIT with each succeeding trough.” Russel Metals reported first-quarter net earnings of $28.7 million (Canadian), 23 percent below the $37.3 million recorded during the same quarter of 2006. Revenues for the quarter totaled $684 million, a 7.7 percent decrease from the first quarter of last year, but 15.3 percent ahead of the $593 million posted during the fourth quarter of 2006. The company was able to liquidate $39 million worth of inventory during the quarter, though it had trouble reducing stocks in its energy tubular products segment. “We do not foresee any meaningful reduction in inventory levels in this segment until the fourth quarter due to the seasonal slowdown in drilling activity in the second and third quarters,” Siegel said. Russel’s metals service center operating profits for the first quarter of 2007 were $24.8 million, representing 6.8 percent of revenues of $363 million. The results strengthened from the fourth quarter of 2006 due to price increases late in the first quarter of 2007. The price increases helped to relieve the negative impact on margins of the excess inventory overhang throughout the service center industry. Shipments, while below the first quarter of 2006, improved from the fourth quarter of 2006. The company’s steel distributors segment, which sells primarily to third party service centers, had first-quarter 2007 operating profits of $11.5 million, or 8.2 percent of revenues of $140 million. The operating profits and margins were both below the same quarter last year and the fourth quarter of 2006. Revenues improved from the fourth quarter of 2006, but margins were negatively impacted by the same factors as the metals service centers. Energy tubular products segment revenues were $179 million for the first quarter of 2007, up from the previous quarter and slightly down from $186 million in the first quarter of 2006. An abundance of product and cautious drilling activity levels put downward pressure on the margins resulting in operating profit of $14.8 million or 8.3 percent of revenues. The seasonal slowdown in the second quarter is expected to be more pronounced than in recent years as year-over-year drilling rig counts have declined, company officials said. Main Steel Relocates Facility in Dallas Area The Arlington building will have three cranes, two 10-ton and one 20-ton, as well as a Herr-Voss leveler. The new building will have double the office space of the Dallas location and its shipping and receiving will be done via drive- through bays located inside the building. Main Steel Arlington will also have the option of utilizing rail access, which runs directly into the facility. Marmon/Keystone’s Gottschalk Gottschalk has been president of Marmon/Keystone since March 1989. He has been with the company, where he began his career as an accountant, since 1968. Gottschalk was the winner of the Metal Center News Service Center Executive of the Year Award in 1999. Additionally, nine metals industry leaders have been elected directors of MSCI. Six directors have retired from the board. The new directors include:
Retiring as directors are:
LB Steel Takes Ownership of Topeka Company LB Steel sells both non-prime strip mill plate and steel counterweights along with engineering, processing, fabrication and finishing services. The firm has a 450,000-square-foot plant and inventory of more than 200,000 tons of steel plate in Harvey, Ill. Robert Richards, vice president of sales and marketing at LB Steel, says the Topeka facility will retain the Topeka Metal Specialties name and become a division of LB Steel Inc. The company will retain the current 70 employees and gradually add 130 positions over the next two years. Topeka Metal Specialties was founded in 1964 by Hank Gerdes in a facility of less than 600 square feet and three employees. Through the years, the firm has served customers from throughout the Midwest by providing a variety of products including such items as specifically engineered cabs for over 100 different types of heavy-equipment and off-road vehicles. Ulbrich Stainless Opening Hong Kong Facility Ulbrich Asia Metals Ltd., a Hong Kong company located in Kwai Chung, is Ulbrich’s second Asian facility, joining a Shanghai representative office opened three years ago. The company says Ulbrich Asia Metals in Hong Kong significantly enhances Ulbrich’s ability to supply titanium, nickel and cobalt alloys as well as stainless steels to its Asian customer base. The 1,000-square-meter facility stocks and supplies a full array of alloys, has finishing capabilities and room for expansion. “It is another step that continues our international focus and builds on our already strong presence in the Asian marketplace,” says Chris Ulbrich, president and COO of the company. Vitucci Back for 2nd Term as President of ASD Vitucci plans to increase membership in 2007 by offering quality presentations at all regional meetings and conferences and implementing a mentoring program for young executives in the industry. Thomas N. Smith Sr. of B&D Steel Co., Holland, Pa., will spend another year in the role of executive vice president of ASD. Smith is next in line to become the president of the association. Robert Pelles, president of Premium Metals, Inc., Cleveland, will retain the position of treasurer. Other returning officers include Dave Raco of Carnegie, Pa.-based Tomsin Steel Co. as Eastern Region vice president, and Jim Barnett of Grand Steel Products Inc., Farmington Hills, Mich., as Central Region vice president. New board members from the Central Region include Peter Dennen of Dennen Steel, Grand Rapids, Mich., and Mike Bush of Century Steel LLC, Chicago Heights, Ill. Returning directors from the Central Region include Tim Loeffel of Loeffel Steel Products Inc., Barrington, Ill.; William Feniger of Universal Metals LLC, Toledo, Ohio; Greg Gross of Northshore Metals, Deerfield, Ill.; Brian Robbins of Mid-West Materials Inc., Perry, Ohio; and Steve Lutz of Tomson Steel, Middletown, Ohio. Returning directors from the Eastern Region include Steven Bergman of Premier Steel Inc., Englewood, N.J.; Ron Chase of Action Steel, Astoria, N.Y.; Albert Gedeon of Lane Steel Co., Pittsburgh; and Lisa Goldenberg of Delaware Steel Co. of Pennsylvania, Fort Washington, Pa. BRIEFS Titanium Industries, Rockaway, N.J., was the recipient of the Business Expansion Award presented by the Morris County Economic Development Corp. Titanium Industries is a manufacturing distributor of titanium mill products, nickel alloys and other high performance materials, with five domestic facilities plus two additional sales offices and three international locations. The company invested $5.2 million relocating from Parsippany, N.J., to its current 50,000-square-foot facility in Rockaway. Ryerson Inc. in North Kansas City, Mo., has purchased a 135-inch by 72-inch by 50,000-pound precision multi-cut blanking line from Red Bud Industries. The new line will process stainless, aluminum, galvanized, prepainted and coated steels with tensiles up to 90,000 psi. Capital Steel and Wire, Lansing, Mich., and Phillips Steel, Long Beach, Calif., have selected STEEL PLUS ERP software from Bayern. Both companies have also chosen STEEL PLUS Imaging for mill test report and document imaging needs. Greer Steel, Dover, Ohio, has honored Mittal Steel USA as its 2006 Supplier of the Year. Mittal’s Riverdale and Cleveland facilities were selected for performance in providing Greer with the highest quality material and service. Oakside Solutions Ltd., United Kingdom, has installed a 0.315-inch by 72-inch by 50,000-pound SCS coil line from Red Bud Industries. The line features a coil stage and load system that allows up to five coils to be prestaged for processing, plus two Bradbury hydraulic levelers, which include a removable roll feature. PEOPLE John Campo has been hired to fill the newly created position of vice president of sales and marketing for O’Neal Steel, Birmingham, Ala. Campo has more than 30 years experience in the metals industry, working for both mills and service centers in sales, management and executive capacities. Charles Maul has been named vice president of commercial for Greer Steel, Dover, Ohio. He will be responsible for business expansion and overall sales effort, including management of the sales force at the Dover facility and Greer’s service center in Ferndale, Mich. Marmon/Keystone has made four account manager appointments at various service centers. Aaron Kranz has been appointed in Chicago, Greg Suttmiller in Denver, Sandy Muller in Los Angeles and Stan Stompor in Southampton, Mass. McNichols Co., Tampa, Fla., has appointed Rick Willauer as district manager at its New Brunswick, N.J., service center. Willauer will oversee all sales and plant operations at the New Brunswick district, as well as its satellite distribution center outside Baltimore. Steve Teague has been appointed southern regional manager at Vulcanium Metals, Northbrook, Ill. Scott Warford, national territory sales manager, has been honored for 15 years of service at Almetals Inc., Wixom, Mich. Letter to the Editor The reader that you quote in this column has some very legitimate comments. All are valid, but I would not discount the amount of influence poor materials management and purchasing practices have on the market. I believe that many companies talk a good game, but spend far more time concentrating on "metal costs" than professional materials management. Most distribution companies spend 90 percent of their time negotiating price rather than service, value-added opportunities or lean concepts. How many companies have spent capital on inventory management programs and systems? How much external education have service centers offered their employees? How many people measure an individual item's index, rather than just the inventory turn? In recent months, I have seen major distributors dumping nickel alloy materials at $4 to $6 a pound below replacement costs. To me, this is irresponsible and reactive behavior as opposed to proactive and professional materials management. Much of this reactive behavior is created by "publicly traded" companies that are doing these things for all the wrong reasons. Greg Chase |
|
Questions or comments about Metal Center News. E-mail feedback@metalcenternews.com