Alliance Steel looks forward to hosting an open house later this month to show off its impressive new service center in Gary, Ind. No doubt the coronavirus will have a presence at the event, where Alliance personnel will pass out masks and hand sanitizer along with drinks and hors d’oeuvres. Indeed, COVID has been an uninvited guest—at Alliance and every other service center—ever since it crashed the party in March and undermined the economy in the U.S. and around the world.
For Alliance, the timing was unfortunate. The company bought the building in November 2018 and had just completed the move from its former Bedford Park location in March, about the time the pandemic hit.
Alliance President Andy Gross said his company made a $23 million investment to acquire and upgrade the plant, located just off I65 a couple miles from the steel mills on the shores of Lake Michigan. It took a year and a half to relocate the equipment and inventory from its former location near Chicago’s Midway Airport. Despite the virus, the company is soldiering on and feels good about its prospects.
Prior to the move, Alliance operated out of 170,000-square-feet of warehouse and processing space in three adjacent buildings, which created lots of inefficiencies in moving steel around. Operations are now consolidated into a single, 290,000-square-foot service center outfitted with the latest in material handling and automated processing, staffed by 125 dedicated employees.
One highlight is an automated crane system that can locate, pick and deliver specific coils for processing with little assistance from the operator. “The crane knows, based on the schedule, what to deliver and where,” Gross said. Two custom-designed transfer cars are used to move steel from bay to bay.
The new Gary service center houses four main processing lines: a multiblanking line, a quarter-inch slitter, a half-inch slitter and stretcher leveler. Two laser systems are available for parts fabrication. All under one roof.
Upon entering the facility, visitors see a beautifully designed lobby and conference room that look more like they belong in a downtown ad agency than a Gary steel plant.
The virus had little effect on the move, though it has long-term implications for the economy and steel demand, Gross said. “We’ve never stopped operating. We’ve had only three cases of COVID that we know of. We went to great lengths to make sure we had safety procedures in place immediately.”
Alliance benefits from a diverse customer base. Automotive is on the way back, construction remains busy, appliances are strong and recreational vehicles are booming, Gross said. Other markets, such as transportation, have stalled.
Gross estimates that demand in the market is still down more than 30 percent. Combined with hot rolled steel prices that have dipped near the low $400s in some cases, service center margins are getting squeezed. He admits these are challenging times. “The problem is that the profitability is so degraded by the virus, you have to do twice the amount of work to get the same result.”
Gross does not regret making his investment in Gary. Alliance is well positioned to succeed when the market turns around, he said. “Alliance Steel is at the starting line. We have gotten a tremendously good outlook from all of our customers. We have new equipment, a state-of-the-art facility, a great team of hard workers, and the best location on the planet for steel. Just give us a chance.”
Alliance Steel President Andy Gross gives a tour of his new service center in Gary, Ind.
Alliance Steel invested $23 million to purchase and upgrade this new processing center and warehouse in Gary, Ind., a short distance from the steel mills on Lake Michigan, which offers logistics and shipping advantages.
The lobby of Alliance Steel was designed with bright colors, lighting, and glass and metallic finishes to greet visitors with a modern, professional look.
Workers at Alliance Steel man the highly automated Red Bud heavy duty slitting line.
This overview of Alliance’s new 290,000-square-foot Gary service center shows the Braner processing line and automated crane system overhead.
Tim TriplettRead more from Tim Triplett
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