Exclusive: Reibus CEO Presses on With Innovation Despite Job Cuts

While the steel industry has been slow to adopt digitization technology, allowing many inefficiencies in manual processes to remain, Reibus hopes to help change that. “For us, it’s not about digitizing for the sake of it. It’s actually about building new solutions,” Armstrong said. And as the industry evolves, he sees the use of more technology as inevitable.

Reibus’ online marketplace offers customers an array of opportunities, including: Selling product through the platform to create fresh revenue; finding material closer in proximity or at a better price to reduce costs; and selling slow-moving inventory to improve inventory tons. Another feature, a logistics portal, is like an Uber experience, Armstrong explained, as “you can see your materials being picked up; you can see that it’s on its way. You can see it’s about to be delivered and all the documentation is bundled up nice and neatly in a digital pack for you.”

Reibus has invested more than $70 million since its inception on hiring and building the right team, building the necessary technology, and participating in the industry and getting its name out there. “That’s $70 million of fresh capital, new money coming into the industry,” Armstrong noted, which is always a good thing. The company plans on spending another $30 million over the next 18 months.

Reibus is now halfway to its initial goal of creating behavior change and seeing its technology adopted by the metals industry within 10 years. “As we get closer to the goal, we realize there’s so much more to do. And much more opportunity for us to add value. … We have to win over the hearts and minds of an industry that has been basically doing the same thing for 50 years. That’s going to take some time,” he said.

Prior to founding Reibus in 2018, Armstrong worked in the aluminum and steel industries of Europe. When he came to North America, he became much more involved in the steel supply chain, working in procurement, sales, and marketing. “I‘ve seen the metal supply chain from all sides,” he said, which has allowed him to see the challenges the sector faces. “Reibus was really born to try and tackle some of those challenges,” he explained.

The name Reibus pays homage to some of Armstrong’s favorite books, the Inspector Rebus novels by Scottish author Sir Ian Rankin. Adding an ‘I’ in the middle allowed Armstrong to secure an internet domain name. And as his wife suggested, the name could also stand for “Reinventing Industrial Business.”

Commenting on its exposure to the most recent banking crisis, Armstrong admitted that Silicon Valley Bank (SVB) was the first bank the company did business with in its first few years. In a fortunate move, it chose to move its accounts to a larger global bank last year to support its geographic growth. Although it still has a few SVB accounts that people are still paying money into, its exposure to SVB and the bank’s bailout was limited.

“In terms of direct impact, it made no impact on our ability to make payroll, pay our customers, etc. Overall, there was no direct impact on Reibus, and obviously we’re very glad to see that actually all got sorted out,” Armstrong noted.

While SVB’s failure has had little impact on Reibus, Armstrong does have some concerns for how its repercussions could impact the steel industry. Thinking back to 2008, Armstrong pointed out that bank failures are rarely isolated and they tend to spread. Many steel companies today are supported by lines of credit from regional banks. The costs of those credit lines will likely increase, leading to less flexibility as banks manage risk. This will put more pressure on the industry to be more cash efficient and to manage risk accordingly.

Armstrong noted that in recent months Reibus has seen some changes in its customers’ ability to access capital. He also commented that layoffs are happening not just in the tech business: Stanley Black & Decker, for example, is closing two manufacturing facilities.

“We see a downturn in the economy as inevitable,” he stated. “We see a restriction on cash and the availability of cheap cash. Interest rates have been low for a long time and the risk tolerance of banks and lenders is tightening. … Inevitably, that will have an impact on our industry.”

A liquidity squeeze will be compounded by high steel prices and cause a reaction in the market, he predicted. Companies will be looking to reduce inventory on hand and increase inventory turns, leading to more spot purchases.

With the medium-term outlook for companies backed by venture capitalists deteriorating and the most recent banking crisis wreaking havoc in the economy, Reibus has had to make some changes to adjust to market conditions. Although it’s had to scale back on investments in technology, it still plans to spend around $6 million in technology over the next 12 months. The company has also paused some of its geographic expansion, choosing to focus on the North American and European markets.

With that, Armstrong has had to make some difficult decisions, laying off just over 50 people total over the last few weeks, including closing its Dubai office and saying goodbye to seven folks there. He said the Dubai closure is a temporary measure; the company plans to revisit it in 2024-2025. Reibus now employs 165 people in North America and 40 in the EU and other countries across the globe. No other office closures are planned at this time.

Despite the job cuts, Reibus has recruited a new generation into steel – something some companies only talk about doing. It has already hired around 60 people under the age of 30, most of whom hadn’t previously worked in the metals industry. It hasn’t been easy to achieve, however, so the company has had to be very intentional in creating excitement about joining the industry.

“We’ve exposed them to a whole new world,” Armstrong said. “It’s amazing how many people don’t know how big the metal industry and the steel industry are until they’re in it. It really opens their eyes to something that they didn’t know existed before.”

Attrition is something every company faces. And when it does happen, it’s not necessarily a bad thing. As Armstrong explained: Reibus recently lost four employees in the Atlanta area who left to work at local service centers. They had never worked in steel until Reibus.

“While it’s disappointing for us that we’ve lost those employees, it’s not actually all bad news. We’ve trained them well,” making them more attractive as employees elsewhere in the industry, he said. “They’ve moved on to … further their career. This stuff happens. It’s natural that people move around. … And they’ve chosen to stay in the industry.” Armstrong believes that this is a good thing for the industry in general and that it will ultimately be good for Reibus in the long term, as it creates potential future customers who know the value Reibus can bring to a company.

In addition to hiring younger people, Reibus has hired senior executives with industry experience and expertise. The blending of those workers has allowed the more experienced to share their expertise with the younger generation, while the younger generation gets to share their excitement and technology expertise.

Editor’s note: John Armstrong will be the featured guest on our Community Chat webinar on April 19 at 11 am ET. You can register here.

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By Laura Miller, laura@steelmarketupdate.com