The new face of Stalcor

Stalcor is back. It has emerged from the melting pot as a bright face in the stainless steel industry. Stainless Steel and Aluminium Corporation (Stalcor) was established in 1973 and after 38 years in the industry, the company is going back to its roots. It has been reborn with a fresh new face and a reinvigorated new brand.

Stalcor has, since its inception, been an independent entrepreneurial stockist and distributor concentrating on stainless steel and aluminium. Over the years, this prestigious business has been owned by JSE-listed companies, Malbak Limited and Dorbyl Limited.

In 2002, Stalcor and Baldwins Steel were acquired by a management consortium and formed part of Kulungile Metals Group. In 2007, Kulungile Metals Group was sold to KMG Steel Services Centres, a company controlled by Blackstar Group. The group grew successfully for the next two years, acquiring Global Roofing Solutions, the owners of Brownbuilt Metal Sections, HH Robertson, Country Roofing and Helm Engineering.

Then in 2009, the aftershock of the 2008 global financial crisis began in South Africa. “Although in part this was alleviated by the infrastructure spend from the FIFA World Cup Soccer, it was felt throughout the steel, construction and manufacturing industries,” says Chris Ransome, the newly appointed chairman of Stalcor. The Stalcor business adapted and resized in accordance with market conditions. “Survival during this period was an achievement in itself,” says Ransome. “And now we are returning Stalcor to its former glory.”

KMG’s shareholders, Blackstar, have implemented proactive and far reaching restructuring strategies to revitalise the company. The operations of Baldwins Steel have been merged with those of Robor; and Global Roofing Solutions has been unbundled to become a standalone subsidiary of Blackstar, which has recently dual-listed on the JSE Securities Exchange.

A leaner and more focused Stalcor is poised for a ‘make-over’. “The company is now ideally positioned to grow on an affordable, sustainable and disciplined basis,” says Ransome. Restructuring includes a major rebranding to re-establish Stalcor as a leading supplier in stainless steel “Stalcor is a R600 million turnover per year business,” says Ransome. “And this enviable position is where we are starting our growth initiative from.” Blackstar and management have recently injected fresh capital into Stalcor with management taking up a significant equity stake in the business while Blackstar retains control of the company. “These capital injections are a real vote of confidence,” says Ransome. “The shareholding proves that both Blackstar and the management of this company remain 100% committed to the success of the business.”

The company, which has been an official local distributor for Columbus Stainless since 1994, has recently strengthened its ties with the local mill. its on-going support to the new Stalcor. Columbus’s Charles Cammell says: “Columbus Stainless is encouraged by the strategic focus of Stalcor. It’s shareholders, investors and staff have certainly demonstrated tenacity and we look forward to forging a bond with the ‘new’ Stalcor for the benefit of the entire domestic market. A strong local mill aligned distribution sector enhances the stainless steel offering to end-users and should continue to provide a stimulus for local conversion and job creation.”

Stalcor, which has four branches nationally, is also relocating its Durban branch from Pinetown in the first quarter of 2012. “The company is growing in line with market and customer demands,” says Ransome. “The relocation of the Durban branch highlights the requirements of the market and Stalcor’s belief that dynamic innovation is the best solution.”

Stalcor’s most exciting initiative is the launching of a “first of its kind” customer loyalty incentive in the metals industry.

Stalcor is busy implementing programs that include a 14% shareholding in the company for the benefit of Stalcor customers. This will allow them to share in the all benefits of being a shareholder coupled with an entitlement to receive dividends declared by the company. This Customer Loyalty Shareholding is housed in a special purpose trust whereby all its beneficiaries are Stalcor’s clients. At the end of the financial year 14% of Stalcor’s dividends are paid to the trust, which then allocates this tax-free income to customers in proportion to their sales for the year.

Chris Ransome and Gordon Odgers, an independent non-executive director of Stalcor, both saw the benefits of a similar project in the automotive aftermarket industry. “A loyalty-based customer shareholding initiative is reflective of the close relationship that exists between the company and its customers and has proven to generate considerable revenue growth and profitability,” says Ransome. “It is a very effective and transparent tool for continually building customer-base and a truly innovative way to reward your loyal clients.”

As Stalcor’s brightness is forged, with it comes a refinement of its vision as a customer-centric stockist and distributor. Its “can do, will do, must do” attitude, makes it an essential contributor to its customers’ success. It believes in sharing its triumphs with its loyal customers and ensuring staff feel proud and invigorated to be part of the Stalcor family. Suppliers view Stalcor as a highly valued and reliable route to market.

“This is only the beginning,” says Ransome with a glimmer in his eye.
“Staff are invigorated and more exciting developments and innovations are on the cards.”

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