Steel Products
A.M. Castle Announces Restructuring Plans
Written by John Packard
January 18, 2013
Written by: Sophia Fain
A. M. Castle & Co. announced restructuring plans to improve annual operating profit by $33 million once fully implemented in 2013. Changes to its metals business include an organizational restructuring, warehouse realignments and performance improvement programs.
“This broad, performance-enhancing plan will enable us to better serve our customers by organizing our operations around them and their needs,” said Scott Dolan, president and CEO. “Our goals are to simplify how we do business, optimize inventory levels, reduce waste, and improve on-time performance, which we expect will help us increase revenue while reducing costs.”
The organizational restructuring means moving from the current decentralized commercial unit structure to a centralized approach with support functions and three vertical sales teams. Those sales teams will each be led by a vice president and will provide specialized expertise to customers in Castle Metals’ Aerospace, Oil & Gas, and Industrial markets. Castle Metals is also adding a new sales incentive program, under a new position of Chief Commercial Officer.
The company reports, “As part of its branch fulfillment network realignment, the Company plans to consolidate five warehouse facilities into the existing network. The Company currently operates 30 metals segment branches in North America, Europe and Asia, which include warehousing, sales, product processing and other operations. Castle will maintain local sales offices to continue serving customers in the markets in which it plans to close warehouses.”
Performance improvement efforts will include implementing a continuous performance improvement program focused on direct and indirect sourcing, transportation, strategic pricing initiatives, back office functions, and optimizing inventory investment.
However, the restructuring will reduce the Company’s workforce by about 10 percent.
The company also wants to reduce Days Sales Inventory to less than 150 by the end of 2013 and 120 by the end of 2014.
Dolan added, “In terms of sales activity and recent market trends, we experienced softness in demand that was greater than anticipated during the fourth quarter, as well as lower activity levels due to extended seasonal shutdowns. In addition, the monthly Purchasing Managers Index trends for the fourth quarter were consistent with third quarter levels, including a November 2012 reading that was below the 50.0 expansion level.”
Dolan concluded, “We are forecasting that the overall business conditions we experienced in the fourth quarter will continue, and we believe strongly that the actions we are taking will position the Company to operate successfully through all market cycles.” (Source: A. M. Castle & Co.)

John Packard
Read more from John PackardLatest in Steel Products

Atlas Tube debuts ‘HSS Connections Hub’
Atlas Tube, part of Zekelman Industries, has introduced an engineering resource aimed at simplifying Hollow Structural Sections (HSS) connection design for structural engineers and fabricators.

Nucor keeps HRC price unchanged
Nucor paused its weekly hot-rolled (HR) coil price this week, keeping it flat for the first time since Jan. 21. This comes after a nine-week rally that saw the company increase prices by double-digits for eight of those weeks.

Nucor increases plate prices by $40/ton
Nucor aims to increase prices for steel plate by $40 per short ton (st) with the opening of its May order book. The Charlotte, N.C.-based steelmaker said the increase was effective with new orders received on Friday, March 28, in a letter to customers dated the same day. The company said the price hike applied […]

US CRC price gains ground over imports
US cold-rolled (CR) coil prices increased again this week, while offshore prices declined.

SMU Steel Demand Index momentum slows
Steel Market Update is pleased to share this Premium content with Executive members. Contact info@steelmarketupdate.com for information on how to upgrade to a Premium-level subscription. Growth in SMU’s Steel Demand Index eased in March after reaching a four-year high in late February. Despite a moderate gain, the index remains in expansion territory. The Steel Demand […]