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Thursday | 09 November, 2017 | 11:20 am

Paying it forward

By Corinna Petry

Above: A welder works on a large-diameter cylinder at Loveman Steel & Fabricating.

Plastics company executive saves a steel company, launches new product line

November 2017 - Don Kruschke comes from a family of Ohio entrepreneurs whose primary expertise lies in buying, selling and servicing  machines and other equipment for the plastics industry. While driving around Bedford Heights in the outer ring of Cleveland, in search of space for the Plastics Machinery Group, Kruschke found Loveman Steel Corp.

“I was looking for a building for my [plastics] machinery and came across a business that was in receivership. I went into the building and saw they made really neat, large, custom-fabricated parts. The [projects] were very big in size with heavy fabrication,” Kruschke says.

“I met the people and took a liking to them. It was a personal connection,” he adds.

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Oxy-fuel cutting of heavy plate is one of the many processing services provided by Loveman Steel & Fabricating.

Back in 1990, Kruschke helped found a company called Stopol with his father and brother. Stopol began as a dealer of used plastics equipment with just three employees. Over the years, it expanded to sell new and reconditioned thermoforming, blow molding, extrusion, injection molding machines, and broadened its service offerings to include auctions, liquidations, appraisals and merger and acquisition consulting.

Loveman Steel’s Chapter 11 bankruptcy proceedings had been dragging on for several years by the time Kruschke was apprised of the situation. “I saw that the people had not been appreciated. I asked about the sales approach, how they did things, etc., and it seemed like they were stuck back in time.”

Kruschke took a calculated risk on Loveman Steel, which was founded in 1931. “We purchased the place in December 2016. It was like a black dungeon so we ended up redoing the factory ceilings, lights and floors.”

Fundamentally, he sought to use what he learned growing Plastics Machinery Group and apply it to the steel company. The former company, Stopol, became insolvent in 2009 so Kruschke purchased “two of its four divisions and brought those back to profitability. PMG has continued to expand a bit over the years. I saw this opportunity and so I am trying to replicate my model,” he says.

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The fabricator assembles ladle lids for steel mills across North America.

Quality is No. 1

“My approach with customers is: If they say jump, we ask, how high? Quality is No. 1,” Kruschke says. “We want to try to beat expectations. Without quality you have nothing. If a customer wants something in 14 days, we try to get it to them in 10 days. If they want it in seven days, we will try to deliver in four.”

When Kruschke acquired Loveman Steel via a bankruptcy court-approved sale, “we reached out to key accounts and they brought their business back,” he says. “Both companies—Plastics Machinery Group and Loveman Steel & Fabrication—deal with some of the largest companies in the world so that’s the reason to have a sophisticated presentation in the [rehabbed] building. Visitors from all over the world are coming to this shop.”

Employee appreciation

According to Kruschke, transparency and incentives are helping to generate goodwill among Loveman’s team. “The core of this company is the talented people. We are changing the mentality of employees, letting them know they are important. We let them know how the company is doing,” including disclosing sales figures.

In return, he says, “Employees have offered several contributions, including tips to streamline and maximize productivity and ideas for projects focusing on high-production assembly line processes.”

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For years, customers that anneal coils have come to Loveman for the bases, separators, convector plates and inner covers.

The kind of fabrications that Loveman typically performs—large-scale, heavy-duty pieces that measure up to 22 wide by 100 feet long and which weigh up to 80 tons—are often one-offs and therefore are very labor intensive.

Kruschke initially budgeted $1 million for the revitalization of assets, but the capital outlay has been closer to $2.5 million.

“We will be upgrading equipment as production orders come in but first, we want to have sufficient funds for bonuses. Bonuses are a priority. I have to give credit to our team for sticking it out and going through tough times. Having gone through receivership [with Stopol], I know it can cause a lot of stress not knowing what’s going to happen.”

MM 1117 service image5Since December 2016, Loveman Steel & Fabrication has been hiring. “We were down to about seven people.”

Work samples

Loveman Steel & Fabrication can build complete blast furnaces, water-cooled panels, scrap shredders, air handling and pollution control equipment, process tanks, gear housings, machined parts and other plate fabrications.

The shop, 80,000 square feet with a rail spur, can burn steel plate up to 24 inches thick. “We do convector plates and ladle lips for the steel mills. We can corrugate and roll our own steel,” says Kruschke.

Loveman Steel makes quite a few of the sections of hardware that are assembled into annealing towers: the bases, separators, inner covers. “Coils in steel and tin have to be annealed,” he says. “Convector plates go between the coils, four to six high, then you put an 18-foot by 76-inch-diameter inner cover over that. The companies we do business with love our covers. We sell them to steel mills throughout North America.”

All of Loveman’s products qualify for Buy American provisions in local, state and federal projects. “We fabricate beams for bridges and buildings and they are highly specialized,” Kruschke says. Loveman Steel also has experience welding large-diameter, thick-walled pipe.

Product innovation

In addition to fabricating plates and beams, box columns and nodes, and producing annealing hardware, Loveman Steel is now also manufacturing trench and stone boxes for construction sites.

“There are laws for safety trenches,” which are sunk into the earth to protect workers from the sides eroding. Stone boxes hold and eliminate the loss of bedding material on work sites. “Our goal and emphasis is to try to sell those. We also are making a major marketing effort to customize them—construction contractors can have their name and logo on the boxes.” As examples, Loveman produced trench boxes with the colors of professional and college sports teams based in Ohio. “We can do other team colors, too,” Kruschke says. “Why not pretty it up for company exposure?”

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Stone boxes like these built by Loveman Steel & Fabricating hold and eliminate the loss of bedding material at construction sites.

Because the business has been around so long, he says, Loveman Steel is fortunate to “get so many inquiries via email every day.” Because of that, “very little sales effort is necessary.”

Lead times on most fabrications are four to six weeks and, as of October, “order backlog was up to six weeks. But if someone needs something sooner, we will rush it through,” he says.

Now that the company survived 86 years, thriving is next, says Kruschke. “We want to produce faster, and reduce labor costs. We are honing our skills and making the products No. 1 in the market. We are going after the business that we do very well and we won’t take something we are skeptical about. We have to keep the work within the bull’s eye.” MM

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