Optima seeks captive supply from KES

Nov 26, 2012 | 10:49 AM | Michael Cowden

Tags  Optima Specialty Steel, Kevin Stevick, Kentucky Electric Steel, SBQ, Michigan Seamless, Niagara LaSalle, cold-finished bar, seamless tube Michael Cowden

CHICAGO — Optima Specialty Steel Inc.’s planned acquisition of Kentucky Electric Steel LLC (KES) should give the company better control over its supply chain as it tweaks the Ashland, Ky., facility to add special bar quality (SBQ) round capacity to the mill’s capabilities, the company’s top executive said.

SBQ rounds are used as feedstock for both the seamless tubular products manufactured by Michigan Seamless Tube LLC and the cold-finished bar products made by Niagara LaSalle Corp., the two companies that were brought together to form Optima Specialty Steel, company president and chief executive officer Kevin Stevick told AMM in an exclusive interview following the announcement of the acquisition (amm.com, Nov. 20).

The certainty of having a captive SBQ supply should give Optima Specialty Steel a competitive advantage that it didn’t have when it had to go out on the open market to buy feedstock for Niagara LaSalle—the biggest single customer of KES—and Michigan Seamless, Stevick said, noting that Optima combined the two companies in part to more efficiently purchase SBQ bar.....