Consolidation key for US distributors: execs

Mar 14, 2013 | 10:58 AM | Corinna Petry

Tags  Service centers, consolidation, purchasing power, profits, Reliance Steel and Aluminum, Metals USA, Kloeckner Metals, Jeremy Flack Flack Steel

CHICAGO — The fragmented steel service center industry must consolidate further to combat overcapacity issues, which dilute the sector’s purchasing power, industry executives said this week.

“We are going to wake up and see the overcapacity,” Jeremy Flack, chief executive of Cleveland-based service center Flack Steel Ltd., said March 12 at Platts’ 9th Annual Steel Markets North America Conference in Chicago.
According to Flack, there are too many points of sale and too low barriers to entry. As a result, distributors “are struggling for relevance with mills” and appear to be “creating little economic value.” ....

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