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MCN 2019 Top 50 Service Centers

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MCN Editor Dan Markham Reliance Steel & Aluminum's record revenues of $11.5 billion in 2018 keeps it atop the annual survey of North America's largest service center companies. 

See the 2019 Top 50 Service Centers

Reliance Steel & Aluminum's run at the top of Metal Center News' Top 50 has reached a dozen years, with no end to the company's dominance in sight. The Los Angeles-based service center company enjoyed record revenues of $11.5 billion in 2018, nearly three times more than its next largest competitor. Reliance's sales increased more than 18 percent over 2017. 

As it does every year, Metal Center News compiles sales figures for North America's largest service center companies for their most recently completed fiscal year. For most companies, that represents calendar year 2018. The result is the MCN Top 50, now in its 17th year. 

Reliance claimed the top spot from now-perennial No. 2 Ryerson Holdings Corp. in 2008, when it hit $7.3 billion in sales. The gap has only grown since then, as a steady diet of acquisitions has pushed the company to top $10 billion in sales in most years since 2014. 

Overall, 2018 marked a record year for revenues for the continent's largest distribution companies, with the Top 50 raking in $61.1 billion. It is only the second time the Top 50 have eclipsed $60 billion, beating the previous mark of $60.6 billion set in the pre-recession year of 2008. 

Clearly, higher steel prices driven by the Section 232 tariffs played a large role in the record sales numbers of 2018. The total marked a massive gain from the $51.1 billion reported the previous year. The Top 50 total jumped 19.2 percent, the largest year-over-year gain since the post-recession increase of 21.9 percent in 2010.

Marks were set across the list. Sixteen companies topped $1 billion in revenue in 2018, three more than the prior year and two more than the record set in the 2017 Top 50. Houston's Triple-S Steel and Kenwal Steel Corp., Dearborn, Mich., became first-time members of the Billion Dollar Club, while South Bend.-Ind.-based Steel Warehouse rejoined after falling just below the figure last year. Mill Steel Co., Grand Rapids, Mich., expects to crack the figure next year. 

Among the Top 10 companies, the biggest jumps were made by Ontario's Russel Metals and thyssenkrupp Materials NA, Southfield, Mich., which each moved up two spots to third and fourth, respectively. The composition of the Top 10 service centers remained unchanged from the 2018 list. 

Behind Reliance and its industry-leading $11.5 billion, the rest of the Top 10 included Chicago's Ryerson at $4.4 billion; Russel Metals, thyssenkrupp and Kloeckner Metals, Roswell, Ga., tightly bunched at $3.2 billion; Mississauga, Ontario-based Samuel Son & Co. at $2.9 billion; Birmingham, Ala.-based OíNeal Industries at $2.7 billion; Steel Technologies, Louisville, Ky., at $2.6 billion; Worthington Industries, Columbus, Ohio, at $2.5 billion; and Georgetown, Ky.-based Toyota Tsusho America at $2.3 billion. 

The rising tide lifted virtually all boats in 2018. Only one member of the Top 50, Liberty Steel Products, North Jackson, Ohio, reported a decline in revenues last year compared with 2017, while Eaton Steel Bar, Oak Park, Mich., reported identical sales figures. Every other member of the Top 50 saw some level of increased sales last year. 

One notable omission from this year's list is Union Partners, the Oak Brook, Ill.-based private equity firm that has become one of the most active acquirers over the past several years. The company, which did not submit at Top 50 form, has a portfolio that includes previous Top 50 mainstay Contractors Steel, Livonia, Mich., which checked in at No. 40 last year. 
Though activity has been somewhat muted thus far in 2019, a few acquisitions have taken place between Top 50 players. No. 18 Norfolk Iron & Metal, Norfolk, Neb., kicked off the year by completing an acquisition of OíNeal Flat-Rolled Metals from OíNeal Industries. Later, No. 35 Magic Steel Sales of Grand Rapids, Mich., was acquired by Lavergne, Tenn.-based SteelSummit Holdings, ranked No. 24 in this year's list. 

Copper distributor A.J. Oster, Warwick, R.I., ranked 29th, was also part of a recent deal, getting acquired by Germany's Weiland Werke as part of the merger of Weiland and Oster's parent company, Global Brass & Copper Holdings. 

At the back half of the list, Klein Steel Services, Rochester, N.Y., became a first-time entrant, clocking in at No. 50 with 2018 revenues of $112 million. That is a little less than the total reported by last year's No. 50. 

Reliance Steel & Aluminum is not just North America's revenue leader, but also dwarfs its peers in virtually all measurements. The company employs 15,000, more than twice as many as the next-largest company. It maintains 300 stocking locations, about three times more than anyone else in the industry. And it maintains more than 35 million square feet of warehouse space, nearly one-third of the reported total for the entire Top 50. 

The Top 50 reported 1,250 stocking locations, a modest increase from 2018. But employment enjoyed a more robust gain in 2018, increasing from 60,000-plus to more than 65,000 workers. 

Looking ahead, 34 companies were willing to provide projections for 2019 revenues, with mixed results. Sixteen companies projected revenue gains next year, while another 13 anticipated declines. Altogether, those companies projected a total increase of $341 million, though that total includes an expected gain of more than $200,000 by SteelSummit, which includes the results of the acquisition. 

Excluding that transaction and its effects, if the expected revenue gains in 2019 were spread across the entire Top 50, 2019 sales would hit $61.5 billion in 2020, another record high. Any increase in total revenues from the Top 50 will likely need to come through market share gains or acquisitions, as service center shipments were below 2018 levels through the first half of the year.

See the 2019 Top 50 Service Centers