September 11, 2020 2020 MCN Top 50 Service Centers
Reliance Steel & Aluminum’s revenues of $11 billion in 2019 make it North America’s largest service center company for the 13th straight year.
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There may come a time when Metal Center News’ Top 50 list is not topped by Reliance Steel & Aluminum, but there are no signs of that on the horizon.
The Los Angeles-based company maintained its position as North America’s leading metals distribution for the 13th straight year. Though revenues dipped modestly in 2019 to $10.97 billion, the company remains well ahead of its closest competitor, Ryerson.
As it does every year, Metal Center News compiles sales figures for North America’s largest service center companies for their most recently completed fiscal year. For most companies, that represents calendar year 2018. The result is the MCN Top 50, now in its 18th year.
The Chicago-based service center company actually narrowed the gap a little in the most recent year, as 2019 revenues were up to $4.50 billion. Yet Reliance generates more sales than the next three-largest service centers combined.
The rest of the Top 10 remains unchanged from the previous year, with only a slight shuffling of the order. thyssenkrupp Materials NA, Southfield, Mich., jumped one place to No. 3 with $3.2 billion in revenue in 2019, while Toyota Tsusho America, Georgetown, Ky., moved up two places to No. 8 with $2.5 billion last year.
Rounding out the Top 10 were mainstays Kloeckner Metals, Roswell, Ga., at $3 billion, Mississauga, Ontario neighbors Samuel, Son & Co. and Russel Metals at $2.8 billion each, Birmingham, Ala.-based O’Neal Industries and Steel Technologies, Louisville, Ky., at 8 and 9 with $2.4 billion in revenue and Columbus Ohio’s Worthington Industries sitting in 10th at $2.2 billion.
The Top 50 demonstrated considerable stability this year, with only two new entries on the list. Cambridge-Lee Industries, a non-respondent last year, rejoined the Top 50 at No. 45, with 2019 sales of $124 million. And at the end of the list, Springfield, Ohio-based Benjamin Steel and Sabel Steel Service, Montgomery, Ala., flip-flopped, with Benjamin taking the final position with $100 million in sales.
The Top 50 had one notable non-respondent this year, last year’s 26th-largest company Esmark. The Sewickley, Pa.-based company had 2018 revenues of $550 million.
Esmark’s absence from this year’s list only partly explains the decline in revenues for the Top 50. This year’s Top 50 totaled $57.7 billion, a drop of 6.5 percent from last year’s all-time record figure. Still, the 2019 sales figure was the third highest since Metal Center News began the list in the early 2000s.
Interestingly, next year’s list may also see little change from this one, as the coronavirus has curtailed activity in the service center sector in more ways than one. Business levels dried up in a way not seen since the Great Recession of 2008-09. With that has come a near-absolute halt to consolidation in the distribution space.
None of the major steel service centers have been involved in a full acquisition this year, an almost unheard-of development in the industry.
The closest was the early January transaction that gave Worthington majority ownership of its previous 50-50 pickling venture with Samuel.
The last true combination of Top 50 companies occurred more than a year ago, when No. 19 Steel Summit Holdings, LaVergne, Tenn., merged with Magic Steel Sales. That June 2019 deal led to Steel Summit enjoying the greatest leap in this year’s list, moving up five spaces after growing sales nearly $100 million last year.
The only outlier to the recent buying freeze has been red metals specialist Wieland Metal Services. The company was created when the German parent company picked up Global Brass and Copper two years ago, which included its service center business, A.J. Oster. It has now begun to expand its service center holdings. Wieland acquired Scott Brass earlier in the year, then made a second deal this past month to acquire sister companies in Connecticut, Marjan and Nasco.
The only other significant transaction since the virus took hold involved a couple of Canadian companies, with Cascadia Metals acquiring the specialty metals business of Varsteel.
Meanwhile, the biggest companies and the most active acquirers remained on the sideline through the first eight months of 2020. Serial acquirer Reliance hasn’t made an acquisition since picking up Fry Steel at the tail end of 2019, Russel Metals has been quiet since October and Ryerson, Samuel and Kloeckner, among others, have gone more than a year since adding to its distribution holdings.
Looking at other results of this year’s survey, the Top 50 employ more than 61,000 people, a noticeable decline from the 65,000-plus last year. They operate more than 1,100 stocking locations, occupying more than 104 million square feet of warehouse and processing space. Both of those were also modest declines from the highs of the prior year’s survey.
Carbon and alloys represent the dominant product line for the continent’s largest distributors. Of this year’s Top 50, only three companies – Wieland, Cambridge-Lee and Lake Worth, Fla.-based Eastern Metal Supply – don’t carry carbon steel products.
The Midwest remains the most highly served area by Top 50 companies, with all but two selling into the region. The Southeast runs a close second. All but nine of the service centers in this year’s survey sell some product internationally, most often to Canada and Mexico.
Despite the pandemic, many service centers remain optimistic they will finish 2020 ahead of next year on the sales front. Thirty-three companies were willing to share projections on 2020 sales. While many anticipate declines, overall sales from those companies were expected to increase by approximately $1 billion.