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Article Excerpt
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STEVE CLINGAN IS SOMETHING OF A CONTRARIAN. The 76-year-old steel industry veteran readily admits his company is not the typical bundle-breaker. He carries far too much inventory, he says, and he's more interested in making a profit than just making a sale. "Our specialty is value-added processing. Almost every pound we ship has something done to it," he says.
Clingan believes many service centers fall victim to a high-volume mentality and sacrifice profitability unnecessarily. "There is a lot more price flexibility in steel than most merchants want to acknowledge. We have made it seem inflexible by commoditizing everything. If more distributors would recognize that, they would have a better looking balance sheet," he says.
Clingan Steel avoids much of the price competition by offering specialized processing services that not many competitors can duplicate. Certainly, the company's selling prices are lower today due to the difficult market conditions, but its margins have remained relatively unaffected because of the declining cost of materials, he says. "We are kind of a conservative company. We solicit business that maintains reasonable gross margins. That is what has given us the power to withstand any problems." He estimates company revenues will decline in 2009 by about 35 percent, "but we will make money at that number.
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"I promised the employees at the Christmas party last year that we would not lay anyone off this year, and we haven't. I just think that's good business. We think we have the highest morale of any shop in Chicago."
Clingan Steel specializes in high carbon, low carbon, alloy, HSLA, brass and stainless steel strip. It offers round edged,...
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