Tampa Steel Conference: Worthington Steel and Kloeckner Metals execs outline a bold new vision

Worthington’s recently announced $2.4 billion purchase of Kloeckner is fueled by a vision for growth that the Columbus, Ohio-based service center group found in the synergistic capabilities of Kloeckner, a service center group and metal distributor headquartered in Düsseldorf, Germany. Kloeckner Metals Corp., headquartered in Roswell, Ga., is the North American division of the European group. Worthington’s acquisition of Kloeckner Metals is expected to close later this year.

Geoff Gilmore, president and CEO of Worthington, stated, “We need to capture the $150 million of synergies that we identified in two years. No pressure, team, but we need to do that.” 

“This positions us nicely. If you look at growth, we’ll continue to attack based on business through transformation. Whatever is going good, you double it. Whatever is bad, you cut that in half. That’s how we’ll do business,” Gilmore explained.

Opportunities Ahead

Gilmore foresees Worthington expanding its footprint and increasing its market share through acquiring complementary operations in the market. 

“There are these organic growth opportunities where we have several, and Klockner has several. A lot of their projects are in these products that we’re not involved with today at Worthington, but they’re high-value-added, and they’re growing, and they’re going to be good margin business that would include downstream fabrication, and get us to more acquisitions,” he said.  

Kloeckner Metals’ CEO John Ganem described the gains from the acquisition as “exponential.” He explained that from the expanded sales team through the integration of larger data sets, he expects the companies to achieve large-scale success. 

“I want a company that makes data-driven decisions every single day and is continually leveraging AI to improve on those decisions,” Ganem said on the topic of leveraging technology. 

Adding, “We just launched into a project. We’re on the supply chain side, and we’re three weeks in, and it’s almost mind-blowing. What this can do, the amount of data that we can bring from all these different sources. And all you’re doing then is getting into a format where people are seeing real time, and you’re managing by exception, or you’re not managing.” 

Pressed about how the new arrangement would work in Europe, Gilmore described a less hands-on approach.  

“It’s going to be a very light touch integration. The businesses are doing well. They contribute to the bottom line, but they have leadership in place that we trust, and they have good strategies, and we’re going to continue,” he said.  

Keeping Up

Both Gilmore and Ganem said that investing in technology to move the business is as important as investing in company employees. The leaders reinforced their shared vision of a strong collaborative culture, emphasizing growth driven by synergistic capabilities. The executives are leveraging the assets each enterprise brings to the table and working toward ambitious outcomes.  

Ganem noted that through consolidation and strategic alignment in acquisitions, they are finding financial might. 

“As we’re consolidating and we’re becoming stronger companies, that allows you to reinvest in the business and make those big investments you need to make in technology to fundamentally change as you go forward,” he said.  

Adding, “Frankly, if others aren’t doing that, then they’re going to be at a competitive disadvantage. That’s right. We’re going to grow and take market share. You’re not going to keep up.”