Distributors/Service Centers

Alliance Steel Plans Move to Gary

December 1, 2018

Andy Gross is placing a big bet on his company and on a new community—a wager he is confident will pay off. The president of Alliance Steel is making a $19 million investment to move his service center operation some 40 miles east from Chicago’s south side to Gary, Ind. He hopes to be operational in the new location by December 2019.

Like many long-time steel towns, Gary has struggled to rebound from a consolidating steel industry that has cost the community thousands of good-paying jobs over the years. Alliance hopes to be an early ally in Gary’s economic recovery. “Northwest Indiana and Gary are making all the right moves to recreate a very promising industrial area,” Gross said. Alliance expects to receive a $1.4 million incentive package from the city.

Over the next year, Alliance will move its equipment and inventory to its new headquarters in the former ATCO-Gary Metal Technologies building, which has been vacant since January. The structure dates back to Republic Steel in the early 1900s, “but it’s been completely updated and is like brand new inside,” Gross said. After months of additions and modifications, Alliance will have 255,000 square feet of warehouse, processing and office space in one structure—up from 180,000 square feet today in three adjacent buildings in Bedford Park, Ill. “We operate from three buildings now. When we move into this new facility, we will pick up a lot of efficiency,” Gross said.

Alliance’s new service center also will be highly automated. The investment includes funding for an automated storage and retrieval system and 10 new cranes, including autonomous models with 40-ton capacity. When finished, the facility will house a new half-inch slitter, a quarter-inch slitter, a stretcher leveler and a multi-blanking line, plus a small 18-inch slitter. “It should be the most efficient steel service center in Northwest Indiana because it will be fully automated,” Gross said.

Alliance plans to minimize any disruption to customers by operating out of both locations for as long as possible. It will sell down its inventory to limit the cost of moving truckloads of steel from one location to the other. And it will rely on its relationships with toll processors in the area to help process orders while its own equipment is in transition, Gross said.

The new plant’s location is so much closer to U.S. Steel and ArcelorMittal’s mills on the nearby shores of Lake Michigan that savings on inbound freight will be substantial. “The proximity to the mills is very beneficial for everybody,” Gross said.

Alliance hopes to grow its own toll processing business over time. “We are the B or C choice in our current location. When we go to sell toll processing in Gary, we will be the A choice. We are located right between Mittal and U.S. Steel. We expect a lot more toll processing business, and we’ll have the new half-inch slitter, which will help a lot,” Gross said.

Alliance will continue its relationship with its inhouse carrier Cardenas Trucking, which will operate a fleet of 30 trucks out of the new facility.

Gross expects the company’s workforce of about 100 employees to expand to 135 or more over the next few years as the company grows.

Alliance will maintain its extensive inventory of flat rolled coil and sheet, including hot rolled, cold rolled, coated and prepainted steels, as well as 300 and 400 series stainless steel products.