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Thursday | 09 December, 2021 | 12:26 pm

Taming turbulence

Written by By Corinna Petry

2021 marked Champagne Metals’ 25th year in business. The founders are developing the next generation of leadership as well as people throughout the organization.

Aluminum distributor and processor assesses its first 25 years of growth and works toward a new era of successful service

December 2021 - Champagne Metals just celebrated its 25th anniversary in business. According to co-founder, President and CEO Mike Champagne, “We are a family owned, privately held company that invests its money back into the business.”

As the second generation of family moves into leadership roles, he doesn’t expect he’ll be compelled to sell the company. “We have great people coming up. We have the kind of people able to take over for the next generation. My goal now is to hand this off to my family.”

Champagne and his wife, Kim, “started with very little money,” he recalls, but they had “the gumption, enthusiasm and a willingness to gamble. Throughout the 25 years, there were challenging and rewarding times.  Considering the circumstances, 2020 was a great year, and this year is certainly better,” he says. “We are humbled but very proud it worked out.”

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Salespeople reach out to end users, fabricators and OEMs—everyone who uses aluminum.

Aluminum demand soars

Jake McGlothlin, vice president of sales and marketing for Champagne Metals, says the company is seeing “phenomenal demand; we are having strong sales months and quarters, which would be even stronger without the supply chain obstacles. I see it as a positive: It keeps things from getting too hot too fast and pushes [order backlogs] into 2022. We don’t think demand will slow down next year unless there is another black swan” like the COVID-19 pandemic.

The company is seeing strong order rates from the commercial vehicle market. This is especially the case for last-mile delivery vehicles, such as those driven by FedEx, UPS and Amazon.

“Another surprisingly big market during the pandemic is the marine industry. Most of our marine customers have backlogs through the fourth quarter of 2022,” McGlothlin says. “People are buying pontoon boats in record numbers. People canceled their overseas vacations and went camping or spent all summer on the lake. Pontoon boats have gained popularity with young and old alike.”

Champagne Metals continues to increase market share, he says, earning more business with manufacturers of semitrailers and Class 8 trucks. “We have further diversified into other markets. In the past, we were predominantly focused on heavy and wide sheet and coil.  More recently, we’ve seen great gains in the more traditional standard-size sheet market.

A lot of customers are also dependent on the oil and gas industry, says McGlothlin, especially in the region served by the company’s Oklahoma operations. “As oil pricing starts ticking up, it’s not great for consumers, but it has driven demand for tanker trailers. We participate heavily in that industry as well.”

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Champagne Metals has been filling up its extra-wide cut-to-length and slitting lines over the past few years.

New business

Geographically, Champagne Metals is gradually branching out into other regions. “We have facilities in Oklahoma, Missouri and Indiana,” says McGlothlin, but the company services strategic customers as far as the East Coast, Southeast and Western U.S., Canada and Mexico.

“We have had a good emphasis on hiring salespeople who are adept at cold calling,” he notes. Those salespeople “reach out to end users, fabricators and OEMs, and everyone who uses aluminum. We’ve seen double-digit new customer growth over the past two years.”

Much of the company’s growth has been organic, either capturing more business with existing clients or advancing along with those customers’ own growth. For example, when a customer acquires another company, “we get that additional business.” Word of mouth has been effective, too. “Our customers who outsource work to fabricators sometimes introduce us to them and to their other customers,” McGlothlin explains.

Seeking balance

“Almost everyone has been affected by supply chain shortages,” says McGlothlin. “For example, wood, extrusions, foam and wiring” are in short supply for customers. Class 5 to 8 truck manufacturers reduced build rates while waiting for semiconductors, he adds.

At the pandemic’s outset, aluminum mills reduced capacity as manufacturers idled factories, “but demand then skyrocketed and there was such a dramatic shortage of aluminum. So the balance was out of whack.”

Because of those constraints, “customers want assurance of supply. Being privately owned gives us the ability to keep robust inventories; our on-time delivery rate is something to be very proud of,” McGlothlin says.

“We gained customers when competitors could not supply on time. Anyone who ran too lean risked losing orders. Manufacturers “started calling us, and we were able to respond with the material they needed. So we picked up customers from our competitors. Customers now want redundant supply. That’s been a big positive in a turbulent market.”

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The company won new customers when competitors could not supply on time. Anyone who ran too lean risked losing orders. Manufacturers started calling and Champage Metals was able to respond with the material they needed.

People and equipment

Champagne Metals has been busy filling its extra-wide cut-to-length and slitting lines during the past few years and perfecting those processes. For example, the company “installed new racking systems and coil staging equipment to make space more efficient and production less labor intensive,” says Brandon Champagne, vice president of operations. New side loaders are planned as well as a new preventive maintenance module within the company’s existing ERP software suite. “The new software will help us stay current and streamline the maintenance process,” he says.

Many companies across the country have reported difficulty filling open positions during the past 22 months. “We retained people, but it’s adding more that’s challenging,” Brandon Champagne says. “We’ve done some creative things to get people in the door.” That includes hiring an employee focused on “helping with our staffing needs,” and “it seems to be having a positive impact.”

Training is very important for retaining new hires, he says. “It also helps that our tenured people have stayed with us, which ensures we don’t lose industry experience and the knowledge of how we do things.”

As for benefits, “We are more flexible about adjusting hours. We moved to four 10-hour shifts and a three-day weekend.” Shifts overlap so all production needs are met, says Brandon Champagne.

Culture club

Overall, he says, “It’s a crazy time, but we are working on the same strengths we always have: high quality, timeliness, sticking to our roots, making sure the culture gets passed on to new employees.”

McGlothin concurs. “We were just in for our annual sales meeting,” where the company’s success was analyzed. “We looked at the culture,” and the greatest value lies in “having people who trust and respect one another. They get along internally and with the supply chain team. As we bring the company past its first 25 years, we are creating a fun and energetic place to work,” he says.

“Going to work over the past two years has been challenging and trying” for many, McGlothlin continues, “but we work with people who feel they are all in this together. They want to grow the company and enjoy hanging out with one another. In the future, I will continue to look for those people. They have to fit into the culture.” MM

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