Tube & Pipe
Monday | 27 July, 2009 | 3:48 am

Oddballs and heavy walls

By John Loos

July 2009 - They say variety is the spice of life. In the steel pipe business, variety is what sets you apart from the competition and keeps you active in unusual economies.

Just north of St. Louis in Bridgeton, Mo., Omega Steel Co., a national distributor of carbon and carbon alloy pipe, owes much of its success to its diverse inventory and the broad knowledge of its experienced management and sales team.

Founded by Greg Semmel in June 1980, Omega began by brokering angles, channels and beams. After five years of selling structural steel, Semmel took Omega into a niche market of heavy-wall and oddball tubular goods, with much success. Between 1997 and 1998, Omega purchased Sligo Steel, a structural steel distributor founded in 1834 with locations in Decatur, Ill., and St. Louis. During the same time, Omega was awarded 1.5 million feet of 24-inch pipe on consignment from a gas company and created Premium Pipe, a new prime pipe division. Today, the Omega Steel Group, consisting of Omega Steel, Premium Pipe and Sligo Steel, has a diverse product range, from used and structural material to fully certified ASTM/ASME and heavy X-grade API products. It stocks upwards of 15,000 tons of inventory in St. Louis, Decatur and Houston.

"With X-grades, there are few distributors out there," says Semmel, president of Omega. "You have to have patience in this field as these products can sit up to three or four years and consume inventory dollars. By having [X-grades] in large quantities, we automatically become a player with any job that our customers have. We’re known for oddballs and heavy walls, so if it’s something unique, we’re going to get a phone call from a lot of distributors because they know we carry these hard-to-find items. And that gives us a tremendous advantage."

Reputable sources
Along with its nontraditional inventory, Omega has built a reputation of being a knowledgeable resource for its customers and tries to match the best pipe product with each inquiry.

"We try to clarify what our customers are looking for," says Semmel. "A lot of times, a customer will give you partial information on an inquiry, so we try to gather as many pertinent details as possible in hopes that we can deliver the most affordable options on the products they need. We might end up saying, for example, ‘Do you really need prime A106 material at $2 a pound for a bumper post, or can we consider something less expensive?’ We try to fit the inquiry as best we can. Our salesmen make sure that they’re fulfilling the customers’ needs and not overselling them with a product they don’t need."

Because the company complements its prime pipe stock with surplus, structural, limited service and used pipe, Omega makes sure its inventory is labeled, stored and tracked as accurately as possible. For example, Omega uses TraxiT software to keep and recall all mill test reports on its inventory contained in its extensive database.

As far as value-added services, Omega has two 24-inch production band saws, two 16-inch band saws, a 34-inch to 40-inch saw on the drawing board, mechanical torches with cutting bands to guarantee square cuts (which can cut and bevel up to 60-inch-diameter pipe), a painting booth, a sandblaster, and a fusion bond removing oven to clean pipe up to 34-inch OD and 60 feet long.

Experience matters
For 15 years, International Pipe & Supply, Oklahoma City, has bought and sold pipe with Omega, creating a unique symbiotic relationship in the pipe market. In terms of inventory, International Pipe is the yin to Omega’s yang, specializing in new and used light-wall prime pipe from 0.188-inch walls to 0.5-inch walls. This differentiation allows both companies to take advantage of each other’s expertise and deep inventories, adding to the variety of their individual offerings.

"Semmel and his associates have tremendous experience in the industry," says Don Karchmer, president of International Pipe. "It’s hard to find companies that do what they promise and walk the walk, but Omega honors their commitments. It’s easy to do business with people like them because there are so few companies that do what they say they’re going to do."

Karchmer suggests Omega can "walk the walk" because of its experienced staff. Of course, with a 175-year-old steel company like Sligo incorporated into its operations, this comes as little surprise.

"We have six employees with more than 30 years’ experience each and a total of 170 years of experience in our sales and management teams," says Semmel. "We’ve been blessed with loyal and dedicated employees. This allows us to help our customers when they have critical questions. We’ve seen almost everything over the years."

"They have some real depth behind their sales staff," adds Karchmer. "They have a terrific vice president, Paul Everett, and sales manager Skip Palazzolo, who do both purchasing and sales and carry tremendous depth in the industry. I really believe that if you have a question about anything to do with heavy-wall or seamless pipe or any of their product, [Omega’s staff] aren’t just order-takers. They’re people who understand what they sell. And having an understanding of what you sell makes a difference in today’s market."

Karchmer adds that in 15 years of doing business with Omega, he’s never had a serious issue with an order. And in the handful of times a minor hiccup has occurred, he says the company’s corrective response has been quick and efficient.

"Honor, ethical conduct and trust, and honesty are the trademarks of Semmel’s company," says Karchmer. "If there’s an issue or a problem, they step up to the plate and take care of it. How people handle mistakes--that’s when their colors shine."

In the end, positioning a company to satisfy a niche market only works if the company’s operational fundamentals are sound. A wide inventory or product range may make a company unique, but reliability, consistency in service and performance are what will make it stand out. Understanding this, Omega’s approach to its market is surprisingly straightforward.

"Our philosophy is to be competitive on all quotes, listen to customers, aid them in their quest to get orders and help them any way we can," says Semmel. "We back up what we sell." MM

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