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Steel is the magic watchword

PVF companies are optimistic as they watch availability and prices

By Joe Nolan, Associate Editor -- Industrial Distribution, 6/1/2004

From the large manufacturer whose sales are looking up, to the comparatively small but thriving distributor, those in the pipe, valves and fittings industries have at least one eye on steel these days.

George Anderson frequently has both eyes on the issue, as national sales manager for Conbraco, based in Matthews, N.C.

The company manufactures a variety of valves (butterfly, check, safety relief) and a number of forged steel products.

In addition to pricing, Anderson is concerned about the availability of steel and other metals. China is buying up enormous amounts of product, he explains.

"That's the challenge with any metal product. We have no idea what we'll pay or whether or not we can even get it," he says, emphasizing that this includes "any steel or iron product that is reliant in any way on scrap [metal]. And that's a big part of the steel market, taking scrap, re-melting and making 'new' steel, if you will."

Anderson has noticed an increase in project activity. Steel availability, he worries, might impact this.

"My major concern there is that this uncertainty of supply and cost may cause some to postpone project activity," he says. "I haven't seen that yet, but the specter of that looming over the market is my major concern."

Though he is not ready to call this increased activity a trend, Anderson adds that "our incoming orders started to look good back in February and into March, in particular. We seem to be experiencing a slight and slow recovery, but it's tenuous enough at this point that I'm afraid it won't take much to put things back on the skids."

Distributor Mark Magstadt, president of Hub City Supply in Lake City, Fla., is also concerned about metal prices, but more philosophical about it—up to a point. He admits that many of those prices have remained steady for a while.

"I don't know why the market stayed so controlled," he says. "A lot of people think this increase in the last six months has been a correction, of sorts. And I buy into that. It just seemed that it was time for something to happen," he says—while crossing his fingers and laughing a little as he adds that "it would be nice if it'd stop now, though!"

Both Conbraco and Hub City Supply have stayed strong by being willing to change and learn.

"A few years ago, we changed our philosophy and went to a lean manufacturing focus," Anderson says, referring to Six Sigma and a new ERP system as among their successful applications. "We're doing things quicker and better as a result."

Magstadt applauds Conbraco's willingness to change and evolve. Though vastly smaller (13 employees), Hub City has had to know when to shift gears, as well.

"I'm a huge believer in 'value-add,'" Magstadt says. "We don't just sell parts. We sell expertise and training."

Magstadt says this can be done regardless of company size—summing up the successful approaches of both organizations in their contemporary markets.

"I'm a believer in change," Magstadt says. "I like to network, find out some best practices and put them into play. That doesn't mean it will work for us, but I sure want to try them."

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