Online Exclusive: Klöckner & Co.’s Acquisition of U.S. Metal Components Fabricator Expands Its Offerings in North America

Klöckner & Co. has agreed to acquire Industrial Manufacturing Services (IMS), Lancaster, S.C., through its U.S. subsidiary Kloeckner Metals Corp. (KMC). IMS is a highly profitable company with annual sales of approximately $30 million.

The transaction marks a further milestone in the implementation of Klöckner & Co.’s corporate strategy, entitled: “Klöckner & Co. 2025: Leveraging Strengths,” whereby the company is consistently expanding its product and service portfolio along the value chain towards customers. Klöckner & Co., based in Duisburg, Germany, is one of the largest producer-independent distributors of steel and metal products and one of the leading steel service companies worldwide. It consists of a distribution and service network of nearly 160 sites in 13 countries.

As part of its strategy, Klöckner & Co. intends to expand its fabrication portfolio to benefit from the highly profitable fabrication business and from being significantly less dependent on steel price developments. The acquisition of IMS fully contributes to this strategy. The parties agreed not to disclose the purchase price or further details. The consolidation of the business will take place from the beginning of November 2023.

IMS provides fabrication, welding, assembly as well as just-in-time warehousing of light- to medium-size sub-assemblies to OEMs of the heavy machinery industry. KMC intends to build on this growth opportunity, attract new customers within the market, and further develop existing relationships with OEMs. Moreover, the acquisition enables KMC to add IMS’ strong expertise in welding and finished parts manufacturing to its existing service portfolio and to implement it at other KMC facilities throughout North America. As a result, KMC will significantly strengthen its leading position within the market and further differentiate its offering from competitors.

Ganem Offers Glimpse to KMC’s Future

John Ganem, CEO of Kloeckner Metals Corp.,  further elaborates on the acquisition of IMS and the company’s strategy in expanding its portfolio of metal fabrication services. The company intends to become the best vertically integrated supplier for OEMs in North America.

F&M: Highlight what the recent purchase of Industrial Manufacturing Services and any other recent acquisitions mean to your goal and the ability to serve your customers?

Ganem: The main driver behind the acquisition is our strategy to expand Kloeckner’s capacity and capability to supply higher value-added products and services to our customers both in North America as well other global markets. IMS provides fabrication services including welding and painting, as well as just-in-time warehousing of light- to medium-size sub-assemblies to OEMs of the heavy machinery industry. We intend to add IMS’ highly specialized and industry leading fabrication expertise to other Kloeckner facilities across the wider network in North America. The acquisition therefore enables us to take a significant step up the value chain and create a platform upon which we can grow.

We feel our ability to offer a fully integrated supply chain solution for fabricated parts and components creates value by simultaneously increasing efficiency and reducing complexity for our OEM customers.

In addition, we recently announced the closing of our acquisition of National Material of Mexico, a leading independent service center and materials supplier serving automotive and industrial end markets in North America. That acquisition also marked an important milestone in our corporate strategy as it enables us to significantly increase our presence in regions where the key automotive and industrial players are located and supply those markets with high-quality, cutting-edge products and services.

F&M:  Expansion plans are in the works for the IMS operations. Please detail this effort.

Ganem: IMS will be immediately integrated into Kloeckner’s fabrication business unit with plans to quickly expand overall available production capacity by leveraging and optimizing the processing capabilities within Kloeckner’s existing regional facility network.

F&M: Let’s discuss the steel industry outlook for 2024; what can North American customers expect in 2024 when it comes to steel and metal products distribution; as well as metal fabrication services in the North American market?

Ganem: Looking ahead into 2024, we believe an expected recovery in residential building activity coupled with increased demand from infrastructure investment should result in stable to modestly higher demand. Longer-term, the outlook in the sector is very positive with strong and consistent growth expected in 2025 and beyond.

F&M: What impressions do you want to leave with fabricators and machinists regarding the company and/or the steel and steel services industries?

Ganem: Kloeckner has made strategic investments and developed advanced capabilities to adapt to the changes

reshaping the metals industry today, and we’re focused on innovating in ways that propel the industry forward and deliver value to our customers now and in the future — particularly for fabricators and machinists. With the demand in the automotive and construction sectors climbing and contributing to steady growth in the precision steel fabrication market, Kloeckner is more committed than ever to bringing our customers in this complex industry the products, services, technology and skills they need to thrive in a competitive market.

Green product alternatives are also playing an increasingly important role. Kloeckner plays a leading role in advising on and supplying CO2-reduced steel and metal products. This enables us to provide our customers with targeted support in transforming their own supply and service chains in a sustainable way.

www.kloecknermetals.com