CHICAGO Metals service center operator Olympic Steel Inc. continues to grow its capacity and move further into downstream processing in spite of a slow-growing economy and tepid steel demand, executives said.
"We are evolving into more downstream pursuits, including fabrication and parts, specialty metals and other niche marketplaces," president and chief operating officer David Wolfort said during a May 3 earnings call.
For example, "we continued to expand our domestic market share of stainless steel, (and) we are expanding our participation in aluminum," Wolfort said. By doing so, Olympic has further penetrated the food service industry and commercial white goods sector, diversifying its portfolio, he said.
In addition, Olympic now offers pipe and tube to legacy flat-product customers and is introducing its flat products and capabilities to the customer base of its Romeoville, Ill.-based subsidiary Chicago Tube & Iron Co., he said. The company has also begun stocking pipe and tube at its service center in Monterrey, Mexico, and will soon stock these products at its facilities in Mount Sterling, Ky., and Cleveland.
Such expansion strategies have allowed the Bedford Heights, Ohio-based company to preserve margins that could be thin if dependent only on carbon sheet prices.
"We continue to evolve and grow our market share of value-added (processing)," Wolfort said. "A lot of (our new) equipment contours to specific customers, (performing processes) that have multiple steps ... that add value at each one of those steps. We cut product and then laser it, bend it, weld it, shot blast it, paint it, fabricate it and so forth."
As Olympic moves down the value-added chain, "we have added a lot of new accounts (and) our older customers continue to rekindle their participation," Wolfort said. "We needed the additional space and capacity to bear the weight of all this participation. We expect all that participation to come back to us and that we will retain the new business that we have."