Hard Steel: Fabrication Serves as the Backbone to Manufacturing

This article originally appeared in Upstate Business Journal on September 24, 2020. 

Across the Upstate, manufacturers work to create everything from cars to aircraft to motors — with their goods shipped across the country and the world. Often, these manufactured products are carefully put together with molded, fabricated or cut pieces of metal. Due to its sturdiness, steel is the choice material for these products. Several companies here in the Upstate supply these companies with the steel fabrication — manufacturing various components that are necessary to create the cars we drive, the buildings where we work and the infrastructure we need.

Providing the Necessary Products to Build

One of these companies is Kloeckner Greenville, the Upstate’s branch of Kloeckner Metals Corporation. The company, publicly traded in Germany, produces and distributes steel and metal products. In 2017, it announced its investment of $11.3 million to expand its manufacturing facility at 1 White Horse Road, The Upstate Business Journal previously reported. Greenville County received $100,000 from the Coordinating Council for Economic Development to help with the costs of site preparation.

That expansion included a 50,000-square-foot bay with 43-ton cranes and a new highly automated slitting line fully capable of processing advanced high-strength steels and aluminum.

Kloeckner Metals had purchased Mac Steel in 2011, which included its Greenville facility.

“South Carolina’s world-class workforce continues to demonstrate a level of excellence that is unmatched, and as a result, companies like Kloeckner Metals continue to grow and thrive in our state. I congratulate this great company and look forward to all that we know they’ll achieve in Greenville County,” Gov. Henry McMaster said at the time.

The company ships carbon and nonferrous metals from inventories stocked in its 42 locations throughout North America.

The White Horse Road facility — which is 200,000 square feet — services Kloeckners’ customers throughout Georgia, Florida, North Carolina, South Carolina, Virginia and Tennessee, according to Kloeckner’s website. The facility in Greenville employs about 85 workers.

Kloeckner Metal Corporation sales are about 7 billion euros — around $8.3 billion — according to Bob DeMarco, executive vice president at Kloeckner. In North America, the company’s sales are about $3 billion.

“The Southeast has grown over the last 20 years or so as manufacturing has moved south,” said DeMarco. “South Carolina and our Greenville location have certainly benefited from this migration.”

At their facilities, the company slits, cuts to length and sells coil. “And we sell various long products into many markets — long products being beams, channels, angles, rounds, squares, flat, plate, tubing, pipe, stuff like that,” said DeMarco.

Many of Kloeckner’s customers are in the HVAC and automotive manufacturing industries and use these steel elements to churn out their own products.

The Pandemic’s Toll

While other industries have suffered due to the novel coronavirus pandemic, DeMarco said Kloeckner Metals hasn’t seen a significant impact. “Business did not fall to the level that we initially thought that it would,” he said.

During the economic shutdown, Kloeckner, like many manufacturers, was not ordered to close.

“In our 42 locations, we’ve been deemed essential in every state that we operate in,” DeMarco said. “We, fortunately, have not had any location shut down for any length of time due to COVID. We put rigorous policies in place to protect our employees, to protect our customers.”

“About 83,000 employees worked in blast furnaces and steel mills that produced steel for companies like Kloeckner Metals in 2019.” Source: Statista.

While DeMarco said data from the trade industry indicates business had been down by around 30% at the beginning of the pandemic around April, it’s now down about 15%. The company has had to reduce some of its workforce in some locations and go to four-day workweeks, but DeMarco said the company is on its “way back up.”

“It has not been a V-shaped recovery, but you can view it as like the Nike swoosh, right? So here’s that bottom of the V, and then it started back up and then halfway back up, maybe a little more than halfway back up,” DeMarco said.

The Situation for Steel Production

The overall steel sector suffered due to COVID-19 in what Barron’s reported was “obvious and some not-so-obvious ways.” The sector has had to deal with falling demand as some car and construction projects are halted, but while steel prices rose. In May, scrap steel prices were up 13% from last year, according to the outlet.

Production of steel has been changing for years now. The pandemic, DeMarco said, hit mills producing steel hard — due to the closings mentioned by Barron’s.

“Structural fabrication refers to the cutting, bending and assembling of steel to create different products. During structural steel fabrication, several pieces of steel are combined to form different structures of predefined sizes and shapes intended for assembly into buildings, industrial equipment, tools and various other final products.” Source: Kloeckner Metals Corporation

“I’ve been in the steel business now for 34 years. And that’s been a problem my entire 34 years: the overcapacity of steel production,” said DeMarco. “Many countries have built mills … to try and do something for their employment situation.”

However, he continued, each time one was built somewhere, another one somewhere else closed.