Above: Kloeckner Metals is working to diversify products, geography, services and its customer base.
March, 2025-For industries that own and operate plants and equipment, the investment is large and it takes time to realize returns. That is why longterm planning is so crucial to success. But that requires commitment, vision, faith in outcomes and the ability to execute.
Kloeckner Metals Corp., a subsidiary of Klöckner & Co., has about 2,800 employees across roughly 60 locations in the United States and Mexico, and generated $4.5 billion in revenue in 2023.
Plasma cutting, laser blanking and other processes bring highly engineered products to customers.
In the past couple years, Kloeckner has been acquiring companies, investing in the latest technologies and building up its processing capacity, particularly for aluminum sheet products. It’s a “yes, and” approach.
John Ganem, CEO of Kloeckner Metals Corp., spoke with Modern Metals about all the projects that are propelling the company into the future.
Until recently, Kloeckner Metals operated service centers in Monterrey and Queretaro, Mexico, both of which performed contract slitting and cut-to-length processing for industrial OEMs. “That was the core business model prior to making larger acquisitions and executing a diversification strategy,” Ganem says.
In 2023, the company acquired National Material of Mexico (NMM). With 10 sites in Mexico, it is one of the largest service center networks in the country. NMM is heavily focused on automotive, which “opens a lot of doors; we expect long-term growth as manufacturing moves back to North America,” Ganem says. The acquisition also allows Kloeckner to expand its automotive-related business in the U.S.
National Materials brought with it an electrical steel business, Corefficient, which makes transformer cores. “That helps us diversify and move significantly up the value chain,” he says.
There is also an aluminum and stainless business within NMM. “The key is diversification and differentiation to drive profitable growth.”
Through expansion and acquisitions, toll processing is becoming a larger part of Kloeckner’s business.
ENGINEERED PRODUCTS
Kloeckner has formed a partnership with BWD Technologies (BWD is an acronym for Blanking Without Dies) in Dearborn, Michigan, a young company that Ganem says has cutting-edge technology.
“BWD is a leader in laser blanking, which differs from typical blanking and stamping. Laser blanking is efficient, shortens lead times and is very cost effective. OEMs don’t have to invest in dies, and the maintenance and storage of tools.
This is a complex engineered product,” Ganem continues, and the finished quality is saving OEMs money and virtually eliminating quality issues experienced through the traditional blanking process.” The blanks are configured, ready to be stamped and made into a fender or hood.
“With dies, blanking is different. Each die makes only one part. The laser cuts any part and eliminates setup time.” The blanking line is also coilfed, which makes the process “efficient and fast. There are few rejections based on quality,” Ganem adds.
“BWD seems to be at the forefront. In Mexico, we are installing a laser blanking line focused on automotive aluminum, and BWD will provide the technical support,” he continues. “We will work together to grow that business.”
ALUMINUM & STAINLESS
In November, Kloeckner announced its plan to build an aluminum flatrolled processing facility on the campus of Aluminum Dynamics LLC in Columbus, Mississippi.
“This will be the most modern flagship operation we have—fully automated—with dedicated processing capacity for Aluminum Dynamics,” Ganem says.
The focus will be on both industrial and automotive customers. The facility will perform slitting, cut to length and, eventually, laser blanking.
“We have run toll processing operations before,” according to Ganem. That business focused on carbon steel and represented less than 5 percent of Kloeckner’s revenues. “Now we are aimed at a higher valueadded portfolio. When you process aluminum, there are different economics with better overall returns. Toll processing is somewhat insulated from day to- day service center business, where prices are volatile. Increasing that business is good, especially for products and services that are more high value in nature. Here, the focus is on diversification and creating an optimal balance between core service center processing, managed services and distribution.”
Last July, Kloeckner purchased the Camden, New Jersey, operations of Amerinox Processing, which toll processes stainless steel and aluminum and has polishing capabilities, including #8 mirror finish. Other services include buffing and cut-to-length for both sheets and plates.
“This, too, is part of the same diversification strategy,” Ganem says. “We didn’t have these polishing and finishing capabilities in house before. This gives us a greater amount of tolling and more high value-added capabilities.”
ECONOMIES OF SCALE
With these acquisitions, Kloeckner has experienced “significant growth since 2021-22. Our shipped volumes have increased by several hundred thousand tons representing a double-digit percentage increase. We are buying more from our mill suppliers and adding new mill suppliers. With scale comes some level of economic efficiency,” Ganem says.
He notes that the company is not a spot buyer. “We are planned in approach. We go to market together with the mills in a lot of ways. More volume across multiple product lines helps us achieve stronger supplier partnerships.
Slit coils are loaded into a truck trailer at one of Kloeckner’s nearly 60 facilities.
AUTOMATION
Kloeckner is in the process of mapping out its automation strategy. “We see it in several ways. Automating at an operational level, we are modernizing our asset base. We can increase capacity and productivity.”
Looking to the future, Ganem expects that markets will remain tight but, by deploying automation technology, “we can sustain operations and remain valuable as a supplier. When you operate so many facilities,” he says, “each is different, with different configurations. You cannot automate everything in older plants but with new facilities, you can go all in and get a big bang for the buck.” In its plant-by-plant strategy, Kloeckner will apply the technology that makes the most sense.
Another push is to improve processes with AI. “How do we become a true data-driven decision-making company? We have good data, but we have an opportunity now with business analytics,” says Ganem. “AI can make data powerful and in real time,” allowing employees to spot trends and make informed decisions.
Kloeckner has a project team working on how to integrate AI into its business systems. “There are some big companies with great solutions, like Microsoft and Google. The team has to determine how to deliver the data in a way that managers and employees can best use it. When that goal is realized, we become a more powerful organization.”
A fabrication subsidiary, Industrial Manufacturing Services, makes fully finished parts and components.
FABRICATION
Kloeckner Metals purchased fabricator Industrial Manufacturing Services (IMS), based in Lancaster, South Carolina, during the fourth quarter of 2023. “That was also about value creation,” according to Ganem. “We will always be a service center. At the same time, we must differentiate and move up the value chain. Since 2015, we have focused on making parts and components beyond slitting and cut-to-length, and we deliver processed parts direct into assembly operations.
“We can also make fully finished parts, painted and welded, and that is becoming a bigger part of our business,” he says. By combining service center and fabrication capabilities, Kloeckner offers a complete supply chain solution. “If you need slit coil, if you need a painted part, we can do both, which creates efficiencies across the entire supplier chain for our customers.”
WELLNESS
At Kloeckner, “we talk about investments and strategies and incorporating technology. But our business is only successful because of our people. We have a people-centric culture,” Ganem says. An in-house wellness campaign focuses first on physical safety and health. Ganem says 2024 was Kloeckner’s safest year in history.
“We are also bringing mobile medical assistance on site. Many employees who have healthcare benefits weren’t getting their annual physical examinations.
“We also have an initiative for mental health,” he continues. “We radically improved our available benefits so people can get the help they need.” The assistance will help discover what challenges an employee faces, secure an appointment and “be able to erase the stigma, put your hand up and ask for help.
“We wanted to be out front, and we are having success with that,” Ganem says. “We did a deep dive and it wasn’t just the employee needing help but the spouse or child. Our commitment to wellness is focused on the Kloeckner family.
“I think it is this type of commitment and compassion that sets us apart. It makes people want to come here not merely for a job, but to build a career.”
Kloecker Metals, 678/658-3678, kloecknermetals.com.
