Summit Stainless Steel, LLC :
Master Distributor of Stainless
Steel Products
In an effort to expand their presence as a master distributor of
stainless steel products, Sumitomo Corporation along with SCOA acquired
KG Specialty Steel and have renamed the company Summit Stainless
Steel, LLC as of September 1, 2005. The new company is 75 percent
owned by SC and 25 percent owned by SCOA.
The acquisition, combined with current holdings, incuding SCOA
subsidiaries Distributor Metals Corporation and Global Stainless
Supply, makes SC and SCOA a major player as a master distributor
of stainless steel products in the U.S. market. (Editor's Note
: Distributor Metals Corporation and Summit Stainless Steel have
merged operations as of April 1, 2006 and will operate under the
Summit Stainless Steel name.)
Summit Stainless Steel has six warehouses in the United States ranging in size
from 30,000 to 50,000 square feet and thier products include stainless
steel bar, angle, plate, channel, beams, pipe, fittings and flanges.
Eyes on the Prize
The Steel Group had been interested in KG Specialty Steel for sveral
years but late in 2004 started serious discussions to buy the stainless
steel products distributor.
It was previously owned by another Japanese trading company, Kanematsu
USA, of which KG Specialty Steel was one of their larger assets
in the U.S.
As a master distributor, Summit Stainless has hundreds of service
center customers who ultimately sell to the end user. Since many
of the stainless steel products are specialty items, Summit Stainless
maintains a large, diversified stock in order to provide just-in-time
inventory to their customers. There are very few specialized steel
mills that sell stainless steel products directly to end users.
"Stainless grade steel is a niche market and stainless steel
bar is a niche within that, a niche within a niche," said Hiroshi
Murakami, Group Manager, Steel and Non-Ferrous Metals Group, SOCA,
who helped put together the deal for the Steel Group.
A growing end user market for stainless steel is in the commercial
and residential construction industry where stainless steel countertops
and large size refrigerators are increasingly popular. Stainless
Steel is widely used in the food processing industry where its anti-corrosive
properties provide the long life required for those products.
It is also important in the chemical industry especially where
sulfur is being used as that tends to eat through carbon based steel.
Any area that is exposed to the sulfur must be stainless steel.
Summit Stainless Steel purchases their steel from a variety of
sources. A steel manufacturing continually migrates to countries
with lower labor costs so does the supply chain. Where they once
may exclusively bought their steel from the U.S. and Japan they
now get their steel from a variety of sources including Taiwan,
Korea, Malaysia, the Philippines, India and China along with many
European countries.
Summit Stainless Steel Origins
Summit Stainless Steel was originally established in 1969 by Kanematsu.
In 1992, Ken Elkin, the current CEO and President of Summit Stainless,
sold his stainless steel distribution company "Kenrac"
to Kanematsu. Mr. Elkin is a second generation steel distributor
and his family's company was one of the first to import Japanese
steel into the U.S. market.
In 1993, Mr. Elkin briefly left the business under his non-compete
agreement with Kanematsu. However, he was recruited back by Kanematsu
four years later in order to help turn the company around.
"Even though I left the company after I sold it, I wanted
to come back and take up the challenge of restructuring the company,"
explained Elkin.
His efforts paid off for the company as it become profitable again
in 2000 and continued to grow and prosper, eventually becoming an
attractive acquisition taregt for SC and SCOA.
Mr. Elkin will continue to run the company from their New Jersey
headquarters. Matt Shibata from SCOA Steel Group will also work
on site as Executive Vice President.
In addition to their headquarters in North Brunswick, New Jersey,
Summit Stainless Steel has regional offices in Charlotte, NC; Suwanee,
GA; Sugar Land, TX; Bloomingdale, IL; and Santa Fe Springs, CA.
They have 21 employees at their headquarters and approximately 8
employees in each of their regional office.
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