Reliance Bullish on Reshoring of Manufacturing

Speaking on the company’s third quarter earnings conference call with analysts on Thurs., Oct. 27, executives expressed their optimism for these markets.

Reshoring/nearshoring is “legit,” and the company is “pumped up about it,” said CEO Jim Hoffman. “Its going to fit right in our wheelhouse, and we look forward to more of it.”

The reshoring of computer chip manufacturing is the most obvious example because it’s getting so much press. But the return of manufacturing to American shores can also be seen in the automotive and appliance sectors, Hoffman said. New manufacturing buildings, rebuilds, and mills spending money to increase capabilities — these are all good, tell-tale signs of reshoring, he said.

Reliance president Karla Lewis said the company is still very positive on non-residential construction, noting that the company’s customers have healthy backlogs going into 2023.

Hoffman was upbeat on infrastructure because of the funding bill that was recently passed. The funds associated with the infrastructure bill should begin to be seen in the marketplace next year. “We’ve been saying for years that America’s going to need Reliance to rebuild, and that’s true. And we stand ready for politics to get out of the way and for our tax payments to go to work for Americans,” he said.

Although some chip manufacturers have been announcing production and labor cuts, “our folks feel [the] semiconductor [industry is] going to be strong the rest of the year and going into the first half of next year,” Lewis stated.

Acquisitions have been key in Reliance’s business model and have helped the company grow into the largest service center chain in North America. Hoffman said that the pipeline of potential M&A opportunities remains healthy and that the company’s appetite for M&A is as strong as ever.

It’s “just a matter of finding the right company that’s for sale that will fit in our family,” he said. “We’re still looking. … There’s plenty of really fine companies out there. I can promise you we’ll keep looking at them. Our appetite hasn’t changed at all. More importantly, we haven’t lowered our bar. It’s still a major part of our growth strategy,” he noted.

By Laura Miller, Laura@SteelMarketUpdate.com