Above: Reaching its 50th year in business, Pennsylvania Steel has grown to 11 locations and 360 employees.

Over 50 years, acquisitions and greenfield expansions place ‘small’ operation on a bigger map with more products.

August 2022- Founded in 1972 by Joseph Dombrowski, Pennsylvania Steel Co. Inc. is now in its 50th year. President Barry Walsh notes that Dombrowski “started with a used truck, borrowed money and a rented facility. He continues to be our patriarch.”

Pennsylvania Steel began as a prime hot-rolled sheet distributor, “doing business in plates and shapes and buying and selling whatever customers wanted throughout the Philadelphia market,” Walsh says.

“When I joined in 1981 as an inside salesman, the company was still pretty small. We had two trucks making local deliveries from a 15,000-square-foot warehouse and 15 or 16 people.”

By then, the company had become a specialist in cold-finished steel bar. “That’s an unusual switch, which redefined our identity,” Walsh says.

HISTORY

There have since been multiple evolutions of the service center, and there is more to come. In 1993, the company relocated to an 85,000-square-foot warehouse and continued servicing the greater Philadelphia market. In 1997, Pennsylvania Steel purchased Lucas Metals in York, Pennsylvania. “That put us into a greater geography. We brought cold-finished bar to their customers, while they had presence in aluminum and stainless steel products,” Walsh says.

       Pennsylvania Steel began deliveries in the greater Philadelphia area (above right) and has expanded from coldfinished carbon steel bar to bar, tubing, stainless steel and aluminum products.

In the early 2000s, the company purchased a tool steel distributor in the Philadelphia suburbs and ventured into the north New Jersey/ New York market. “There were closures in that [Jersey] market, creating a void. We put territory managers there to get our name out. We became very successful there.”

In 2005, PA Steel opened a greenfield site in New England, branching out into Connecticut and Massachusetts. Initially, “it went from one key employee driving around locating a potential warehouse to now having two locations and 55 employees” in the New England region, Walsh says. In 2007, the acquisition of Bethlehem Aluminum in Allentown “strengthened our position in aluminum. They did more plate distribution and had significant ties with aluminum bar producers. So that acquisition expanded our product line and helped to expand our geography to a different part of Pennsylvania,” he says.

      Processing capabilities include precision sawing, and the company continues to add space for inventories.

Four years later, Pennsylvania Steel purchased an aluminum plate distributor on Long Island, New York, and acquired Schwartz Steel near Charlotte, North Carolina.

Shortly after expanding to Charlotte, Walsh’s team received a phone call from a service center in Richmond, Virginia, that was looking to sell. Within five months, the footprint was expanded again into the South. Once Pennsylvania Steel opened a depot in Greensboro, North Carolina, its reach extended from Massachusetts down through the Carolinas.

“Our most recent acquisition was in 2016, when we bought Erie Metals in Cleveland, which is going very well. We are ready for more,” he says.

Along the way, through product strength and relationships, the company’s range is equally part of its growth. “Cold-finished bar is still king, but we are extremely active in aluminum bar and plate, carbon steel tubing, along with tool steel and stainless steel. We morphed quite a bit.”

PEOPLE ARE CRUCIAL

The best part of making good acquisitions, Walsh says, is being able to keep employees in place. “We have so much pride in our people. When you are acquiring small companies, everyone is crucial. They already ran lean. In some cases, ownership wanted to get out and retire; in other cases, some previous owners still work for us, such as the owner of the Long Island location. We are able to retain that talent, and we rebrand and bring all of our resources to bear on acquisitions and gain from their strength.” Deploying those resources, the company now puts out 60+ delivery trucks daily.

MACHINERY UPGRADES

The amount of processing customers demand—precision plate sawing, for example— has expanded tremendously, according to Walsh. “The crazy market that distribution has experienced in the last two years allowed us to upgrade our sawing equipment greatly. We won’t get into fabrication—get into our customers’ kitchens, so to speak. We are not bending or welding.” However, customers want processed material that’s ready to enter their own manufacturing operations immediately without secondary work.

Walsh is scaling back a bit and turning over his chief operating officer role to Mike Loveland, who was promoted after serving 11 years as vice president and general manager in the Southeast.

Loveland joined Pennsylvania Steel in 2007 at the New England Division, then transferred to North Carolina in 2011 to lead the Charlotte and Richmond operations. As COO, he oversees daily business and administrative functions for all divisions.

Loveland says his focus will be on growth and expansion. “We have been conservative and only made waves when it really meant something. When I started in 2007, we just opened in Connecticut. That was the third facility. Now we have eight service centers.

“We are always involved in talks about acquisitions,” he says. “We talk to eight to 10 companies a year [about selling],” but at the moment, “there are inflated valuations, and they have to be the right fit for our company.”

Greenfield expansion continues apace. The company has agreed to purchase a second 60,000- square-foot facility in Long Island and is building a 40,000-square-foot addition at its Bensalem hub.

“Like most service centers, we are doing more value-added processing,” Loveland says. In Bensalem, “we are adding sawing equipment and warehousing space. We will move our large bar inventory there, serviced by two 10-ton cranes.”

Following 50 years of history, the timing of opportunities today “is intriguing,” says Walsh. “What’s happening amidst our growth is that we are transitioning and getting second-generation management to take the company forward.”

Asked what suppliers and customers might expect next from Pennsylvania Steel, Loveland quips, “Watch out!” MM