Economy

SMU Retiree Exit Interview: Roy Berlin of Berlin Metals

April 2, 2019

Selling the family business “is not just a personal choice, but what’s best for the company,” said Roy Berlin of Berlin Metals one year after selling his Hammond, Ind., service center operation to Olympic Steel. Speaking with Steel Market Update on his first day of retirement, “the first day of the rest of my life,” Berlin looked back at his career with a sense of accomplishment and looked forward with a sense of optimism for those whose careers are still ahead of them in the service center industry.

Berlin Metals is a long-time distributor and processor of prime tin mill products and stainless steel strip, as well as galvanized and light-gauge cold rolled, serving the building products, automotive and specialized industrial markets. The company had been under Berlin family management since his father bought out its predecessor in 1967.

Olympic’s purchase of Berlin Metals is a classic example of the generational trend that is fueling the wave of mergers and acquisitions in the service center industry. Like Berlin, many service center owners are in their 60s and nearing retirement faced with the difficult choice of keeping the business in the family or cashing out and moving on. With successful careers of their own as a physicist and a graphic designer, Berlin’s two adult children had no interest in selling steel. That left him with a choice: keep working, hire a day-to-day manager and oversee operations from the board chairman’s seat, or look for a buyer with the right fit for the company’s future.

When it comes to service center M&A, size matters. The market is polarizing, with the big getting bigger and the small getting more specialized and niche-oriented. “The market favors the very large or the very small who are nimble and picking at the corners,” said Berlin. With around $50 million in annual sales and 65 employees, Berlin Metals was in that vulnerable mid-range. “It’s easier for bigger companies with more purchasing clout and more market reach to negotiate better contracts with both suppliers and customers,” Berlin said. “We have done fine for many years, but should have greater ability to grow and prosper as part of a larger company that is more important to the mills.”

Berlin Metals is now a division of Cleveland-based Olympic Steel, which has around a billion dollars in annual revenue. Andrew Tobias, formerly Olympic’s Stainless Steel Product Manager, is the new general manager of Berlin Metals.

“To me, the evolution of a mature business is consolidation,” Berlin said. “Steel service centers are a mature industry, so it is just natural they will consolidate.”

Berlin offers this advice for wannabe retirees who are wondering if they should encourage their children to take over a small family business with perhaps an uncertain future. There’s still room in the market for service centers of all sizes, Berlin believes, as long as they are unfailingly focused on staying close to their customers and meeting their specific needs. “I think the future is good for service centers. There are opportunities, it’s just a very competitive world.”

In a heartfelt goodbye message to industry friends and colleagues, Berlin recalled how he was fortunate to work with a father who shared many lessons and much wisdom along the way, including “the three F’s”—be fair, be friendly and, when needed, be firm. And always try to make tomorrow better than today, even if only a little bit.

“I want to thank all my colleagues here at Berlin from the bottom of my heart for their hard work, collegiality and friendship,” he wrote. “I also want to thank the Olympic Steel team for taking on this important responsibility and for making it possible for me to retire knowing that this company will continue its successes. And I want to thank the larger steel community of producers, end users and other service centers for their support and friendship, for the opportunity to grow and learn with and from them, and for giving me a home.”