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Chattanooga challenge: Mapes & Sprowl barges into new territory with its acquisition of a Tennessee toll processor.

Article Excerpt
Mapes & Sprowl Steel Ltd., one of the oldest Chicago area steel service centers, found itself occasionally turning business away for lack of space and resources. That all changed last November when the company purchased JIT Terminal Inc., Chattanooga, Tenn.

The acquisition represented a departure for Mapes & Sprowl on several levels: the company now services enameling and electrical steel buyers from a location in the Southeast, has entered the toll processing business, and has become a much more flexible provider of value-added services.

This location, with its barge capability on the Tennessee River, also increases Mapes & Sprowl's freight options, offering a cost advantage over truck and even rail. "We can buy in bulk from mills that can ship by barge," says Gary Hamity, company president.

Hamity, who also serves as chairman of the renamed JIT Steel Service, says the Tennessee acquisition started up well, making money in its first two months under new ownership.

"We are landlocked in Elk Grove Village. We have no rail spur here, and no ability to put more steel storage or processing equipment here. If we didn't expand elsewhere, it would have confined our opportunity to grow," he explains.

Mapes & Sprowl continues its tight focus on sales of enameling and electrical steels, which made expansion into southeast Tennessee a logical move due to its concentration of appliance manufacturers. "We're really familiar with a number of the big [oven range] players. It seemed like a natural location for us, but to do brick and mortar wasn't in the cards," Hamity adds.

Mapes & Sprowl had developed a relationship with JIT Terminal...