Supplier adding jobs during declinev

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At a time when many sectors of the nation’s steel industry are declining, a Lancaster County company is expanding its steel processing operation and adding jobs.
High Steel Service Center Inc. recently started a 58,000-square-foot expansion of its plant at 400 Steel Way. The plant will total more than 200,000 square feet with the
$8 million expansion.
The expansion initially will create 15 new jobs and might create an additional 45 jobs in the future, said Dan Kelly, president of High Steel Service Center. The company, which currently has 83 employees, is a division of High Industries Inc., based in East Lampeter Township, Lancaster County.
High Steel Service Center stores, processes and delivers carbon steel products for manufacturers, including those in the truck body and heavy equipment industries. The company serves businesses in eastern Pennsylvania, Maryland and Delaware.
The expansion shows how the country’s steel industry is becoming more decentralized, said James Burnham, Murrin Professor of Global Competitiveness at Duquesne University in Pittsburgh. Instead of one company making steel, processing it and delivering steel products, a variety of companies carry out these functions.
Burnham said companies such as High Steel Service Center might have a competitive advantage over foreign rivals because customers working with steel processors want things made to exact specifications. Many of these customers prefer work with a company that is nearby, rather than one that is thousands of miles away.
“I think there’s a future for companies like this,” Burnham said.
Hopes for a rebound in the manufacturing sector are also propelling High Steel Service Center’s expansion. Although there has been much attention paid to the stagnation and decline in the manufacturing sector nationwide, Kelly said his company expects the sector to rebound in mid-2003. That is why the company wants to complete its expansion by June, he added.
“We have been through some of these cycles before,” Kelly said. “But things will come back.”
Kelly said the expansion would make High Steel Service Center more appealing to a broader base of manufacturers. For example, new equipment will allow the company to process pre-painted steel, which Kelly said is often used in the lighting and appliance industries.
Kelly’s optimism comes at the same time that the Economic Development Company of Lancaster County is releasing results of its annual survey of the county’s business climate. The survey reports that much of the county’s manufacturing sector is stagnant or declining.
For example, 25 percent of manufacturers surveyed this year said they expected no growth or a decline in sales during the next year. Another 43 percent said they expected sales growth of only between 1 percent and 5 percent.
Despite the dim outlook, manufacturing remains an important part of Lancaster County’s economy, said David Nikoloff, executive director of the Economic Development Company of Lancaster County. About 55,000 people have manufacturing jobs in the county. Those workers earn a combined $2 billion a year, he said. Nikoloff said that High Steel Service Center’s decision to expand might be a sign that things are turning around for manufacturers.
“We’re pleased that this company sees some opportunity here,” he said.
Kelly said High Steel Service Center might eventually expand its service area to include southern New Jersey, southern New York and northern Virginia. He also said the company’s annual output of about 60,000 tons of processed carbon steel could double within the next five years.
“We’ve got a lot on our plate,” he said.