Business Spotlight: Family of Steel

Stainless steel distributor Certified Metals Inc. is starting 2013 with a new owner, but he’s no stranger to the business – or to the company’s founder.

President David Neill in December purchased the company from founder and CEO James Louth in a cash and stock deal with terms undisclosed. Louth is staying on as technical adviser and consultant, while he entrusts the company to Neill, his son-in-law.

“I would like to see this company go on in Springfield through my family like some other companies have around here,” says Louth, who started Certified Metals 35 years ago after cutting his teeth in industrial steel sales in Tulsa, Okla., and Houston, Texas.

Now operating in a 30,000-square-foot warehouse at 2700 Commerce Drive in Partnership Industrial Center, Certified Metals’ 10 employees – four in sales – work directly with clients in three segments: fabricators that produce steel tanks and vessels; machine shops that thread, drill and make parts; and food and liquid producers such as Kraft, Reckitt Benckiser, DairiConcepts and Tyson. The company stocks 750 line items such as steel plates, pipes, sheets and bars, totaling about 1 million pounds, Neill says.

Freight equalizer
With 300 active accounts across four states in a 150-mile radius of Springfield, Certified Metals handles first-step processing. For instance, warehouse staff will saw cut a 6-inch round bar from a standard 12-foot piece or take a steel plate up to 3 inches thick and plasma burn into it a circular piece to deliver to customers in Columbia, Sedalia, Joplin and into Kansas, Oklahoma and Arkansas.

“Eventually, $3 per gallon diesel puts a limit on how far you can service,” Louth says. “The further away you get, the harder it is to equalize the freight with your competition.”

Other orders are of the bulk variety such as a bundle of 25 bars of 1 3-16 inches in diameter for a client to fabricate.

Area clients include Paul Mueller Co., Rose Metal Products, Stainless Fabrication Inc., Custom Metalcraft and Holloway America.

Springfield-based Tank Components Inc. places daily orders with Certified Metals, mostly circular pieces used to top off stainless steel tanks for TCI clients nationwide. President and CEO Dale Sandy says TCI buys thousands of pieces on a monthly basis, and the supplier relationship dates back 13 years.

“They were the first vendor we went to when we started Tank Components,” Sandy says. “They’ve been a critical part of our existence.”

While TCI also buys from stainless steel suppliers in Tulsa, Okla., and St. Louis, the circular tank heads arrive exclusively through Certified Metals.

“Most stainless steel suppliers don’t like to process things into circles; they’d rather sell you a cut sheet at the standard width,” Sandy says. “That’s one thing that Certified started. They were willing to look at our circles and do that process for us. It saves us a step and also saves us the scrap we would generate.”

Certified Metals cuts the steel using a more than $100,000 machine in a process called plasma burning, which mixes nitrogen and carbon dioxide to produce a flame for cutting.

From the ground floor
In 1978, Louth was on the front end of stainless steel distribution efforts that Springfield became known for through the years. The Ozarks native had returned after marrying and deciding to raise his family in southwest Missouri.

“There wasn’t anybody doing what we do in Springfield at the time,” Louth says. “Everything had to come from St. Louis or Kansas City. If the Kraft cheese plant, which is all stainless for sanitation, had a breakdown of something, they had to wait for it to come out of town.”

Neill took a sales job at Certified Metals in 1991, after spending some time in banking, and he began working in the warehouse as part of the company’s training program. New employees start in shipping and receiving 90 days before moving to inside sales or traveling sales.

“If he’s worked at the warehouse and he calls in at 3 o’clock and orders 86 sheets sent to Sedalia, Mo., he has a pretty good idea what that means. If you’ve never done it, you don’t see why it can’t be done,” Louth says.

Slightly more than a decade later, Neill was promoted to company president. He says in recent years, sales have grown 3 percent to 5 percent each year, though he declined to disclose revenues. He’s forecasting more than 3 percent growth and planning to add a couple of staff members in 2013.

TCI’s Sandy says Neill has handled TCI’s account since Day One, and he expects a smooth transition from Louth to Neill.

“David’s been primarily in charge of day to day for the last year, so I don’t see a lot of changes,” Sandy says.

Louth says a handful of purchase offers every year have come through his door, but the time was right now to pass Certified Metals on to a family member.

“There’s not a ‘for sale’ sign in the front yard, but acquisitions and mergers are a big thing. I had no interest in turning over the company from the people who have helped it become successful to some New York Stock Exchange company that would change our corporate culture,” he says. “Everything is a team effort.”