Supply chain gets bigger with buyouts and groundbreakings

Above: Tempel Steel’s Apodaca, Mexico, plant is undergoing re-engineering of its existing production area and is building a second 185,000- square-foot facility. Tempel’s Focused Factory produces traction motor laminate cores for electric vehicles

November, 2023- Supply chain gets bigger with buyouts and groundbreakings

Quite a few well-known metals processors and distributors kept themselves busy with acquisitions and greenfield expansions during 2023. As we near year’s end, it might be useful to provide a roundup of that activity. Many of the projects extend into 2024.

GREENFIELD I

Worthington Industries Inc.—which is in the midst of dividing into two companies Worthington Steel and Worthington Enterprises—plans an expansion of its Tempel Steel facility in Apodaca, Mexico. Tempel will re-engineer the footprint of its existing production area and add operations in an adjacent 185,000-square-foot facility. These moves will facilitate a significant expansion of Tempel’s Focused Factory, which produces traction motor laminate cores for electric vehicles. With expanded production expected to come online in 2024, Apodaca will be Tempel’s largest production site for motor and transformer laminations for the EV market.

ACQUISITION I

In early October, Olympic Steel Inc. acquired Central Tube & Bar (CTB), which serves large OEMs and fabricators across the Mid-South from service centers in Conway, Arkansas, and Tulsa, Oklahoma, totaling 162,000 square feet of warehouse and production space. CTB performs valueadded fabrication services, including tube laser cutting, tube bending, robotic welding, flat laser burning and press brake forming. Its customer base includes transportation and agricultural equipment and construction contractors, among others.

While expanding our reach into high-growth markets in the Mid-South, CTB extends our valueadded contract manufacturing capabilities,” said Andrew Greiff, Olympic’s president and COO. “The addition of CTB into our tubular and pipe products segment, combined with the existing success of our Chicago Tube & Iron business, provides great opportunities for growth and synergies.”

ACQUISITION II

Also in October, Ryerson Holding Corp. acquired Norlen Inc., a fabricator in Schofield, Wisconsin. Norlen performs stamping, machining, painting and additional value-added fabrication services to industries including agriculture, HVAC and defense. “Norlen’s processing capabilities provide opportunities for Ryerson to grow our value-added business in the Midwest and beyond,” said Jeff Redfield, Ryerson’s North Region president.

ACQUISITION III

Reliance Steel & Aluminum Co. in May acquired Southern Steel Supply LLC, Memphis, which distributes merchant and structural steel, pipe and tube, steel plate, ornamental products, and laser cut and fabricated parts. Southern Steel is now a subsidiary of Siskin Steel & Supply Co. Inc. The acquisition expands Siskin’s geographic reach, broadens Southern Steel’s product mix and provides access to a wide range of capabilities through Reliance’s service center network, Reliance President and CEO Karla Lewis said.

ACQUISITION IV

In July, Leeco Steel bought Alvarado, Texas-based Titan Steel, a plate processor specializing in plasma and oxy-fuel cutting and machining. With Titan Steel, Leeco has expanded its value-added processing services and market reach, said President and CEO Denton Nordhues. The Alvarado team is able to produce parts that require precision machining and milling. These parts are often used as components on larger pieces of equipment, such as transmission towers, and can be time-consuming and inefficient for clients to produce in house. To support business growth from the Alvarado location, Leeco created a sales division dedicated to serving customers in the energy transmission and distribution industry.

GREENFIELD II

Flack Global Metals (FGM) opened its first physical metals service center April 26 on the campus of North Shore Steel in Houston. The 60,000-square-foot facility complements FGM’s geographyagnostic business model, leveraging a vetted network of toll processors to support client needs. Flack previously relied exclusively on a network of warehouses and toll processors to deliver its orders but the Port of Houston hub augments its ability to control material flows around the South and fosters closer management of certain high-touch supply chains for clients. The new service center carries painted hot-rolled, cold-rolled, galvanized, Galvalume and aluminum; bare and acrylic-coated galvanized and Galvalume; bare aluminum and stainless steel products.

      Reliance Steel & Aluminum Co. acquired Southern Steel Supply LLC, Memphis, in May 2023.

ACQUISITION V

In February, Flack Global Metals acquired Fabral, which produces metal building components. Founded in 1967, Fabral ships to residential, commercial and post frame/agricultural customers. With this acquisition, FGM launched the third segment of its business: a direct equity investment platform focused on steel-consuming OEMs. Founder and CEO Jeremy Flack said, “Fabral gets us one step closer to end consumers of metal building products, making FGM a more informed partner no matter if you use our distribution services, our financial services, our manufacturing capabilities or any combination of the three.” Fabral has eight locations throughout the United States with 246 employees and over 500 customers across those facilities.

ACQUISITION VI

At the end of July, Michigan-based Alro Steel purchased Heimansohn Steel in Clarksville, Tennessee. Founded in 1896, Heimansohn Steel performs such services as cutting, shearing, drilling, punching and bending. This purchase will allow Alro to grow its customer base in Tennessee and Kentucky, while providing a wider product line, processing and delivery for custom cutting orders.

GREENFIELD III

Mill Steel Co. purchased a 90,000-square-foot facility in Mansfield, Ohio, at the end of August to supports its Cleveland Metal Exchange subsidiary, which it acquired earlier in the year. The expansion signals Mill Steel’s entrance into the flat-rolled stainless steel and aluminum metal markets. Th e new location is equipped with a 72-inch-wide slitting line, 60-inch-wide slitting line and a 50-foot-deep looping pit for surface-critical material processing. The company will also add a cutto-length line in Ohio. Concurrently, Mill Steel is spending $18 million on its Detroit facility by installing slitting, packaging material handling and warehouse capacity. These changes are scheduled for completion in 2024.

ACQUISITIONS VII, VIII

Kloeckner Metals Corp. made a downstream acquisition in August: Sol Components, which produces end-to-end structural solar solutions for the commercial and utility renewable energy sectors. Kloeckner Metals CEO John Ganem said the addition of Sol Components “will elevate our portfolio of high-value-added products and services. This strategic acquisition underscores Kloeckner’s unwavering commitment to being a partner in shaping a sustainable tomorrow.” Kloeckner also closed on its acquisition of National Material of Mexico, an independent 10-branch service center and materials supplier serving automotive and industrial end markets. The regional presence, customer segments and NMM’s solid footprint within the automotive sector make the transaction a perfect fit for both companies, according to Kloeckner’s leadership.

ACQUISITION IX

Lapham-Hickey Steel Corp. bought Arrowhead Steel Co. last spring. The company, founded by Arnold Koldenhoven in 1987, distributes flat-rolled steel products, particularly corrosion inhibiting coated steel sheet and coil. Koldenhoven and his team continue to service customers under the Arrowhead Steel name. “The acquisition of Arrowhead Steel gives us the opportunity to enter markets in which we have limited exposure today,” said COO Will Hickey. “Their customer footprint aligns with existing Lapham-Hickey production facilities, which will allow us to strengthen our service and selection.” Both companies are located in suburban Chicago. Factors determining the favorability of expansion and acquisition activity in the metals marketplace next year will include demand for products and services, commodity pricing, budgets, productivity, available workforce, private financing and community support. Let’s hope the winds blow in the direction of smart investments in 2024.Mill Steel Co. purchased a 90,000-square-foot facility in Mansfield, Ohio, at the end of August to supports its Cleveland Metal Exchange subsidiary, which it acquired earlier in the year. The expansion signals Mill Steel’s entrance into the flat-rolled stainless steel and aluminum metal markets. Th e new location is equipped with a 72-inch-wide slitting line, 60-inch-wide slitting line and a 50-foot-deep looping pit for surface-critical material processing. The company will also add a cutto-length line in Ohio. Concurrently, Mill Steel is spending $18 million on its Detroit facility by installing slitting, packaging material handling and warehouse capacity. These changes are scheduled for completion in 2024.