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Agility Prevails in Metals

International metals company O’Neal Industries reinvented itself several times in its almost 100-year corporate history.

Slitting in progress at United Performance Metals in Cincinnati, Ohio.

Slitting in progress at United Performance Metals in Cincinnati, Ohio.

There is a magnificent magnolia tree standing in front of the Birmingham headquarters of O’Neal Industries, an international distributor and processor of metal products. The tree was planted in 1946, outside the company’s old offices across the road. When the company relocated its offices and added a new entranceway for its trucks, the magnolia was in the way and had to be removed.

Emmet O’Neal, the son of company founder Kirkman O’Neal, wanted the magnolia to be saved by moving it 200 feet to the new building. Arborists insisted that a tree of that size would never survive such a move. Emmet O’Neal insisted, and two 60-ton cranes were used to transplant the magnolia to its new location, where it continues to grow to this day, as strong as ever.

When current O’Neal Industries Chairman and CEO Craft O’Neal tells that story, he compares the company his grandfather founded to that magnolia tree. Deep roots, a strong foundation, lots of sturdy branches and the ability to withstand major changes.

Since its origins in 1921, O’Neal Industries has grown into a worldwide company, with more than 80 locations throughout North America, Europe and Asia. But like that magnolia tree, the company began as a small sapling, when Kirkman O’Neal — a former shipyards worker for U.S. Steel — borrowed $2,000 to invest in a modest fabrication shop located in western Birmingham called Southern Steel Works.

“He had five shop workers and three pieces of equipment: a punch press, an air compressor and a portable drill,” Craft O’Neal says. “He took things one order at a time and developed a good reputation and relationship with his customers.”

ABOVE An OFR Slitter at work at O’Neal Flat Rolled Metals in Brighton, Colorado
 

Kirkman O’Neal eventually bought out his partners, and the business thrived throughout the 1920s. Then the Great Depression hit, and the company nearly went under, Craft O’Neal says.

“My grandfather downsized and eked out an existence. It would have been easy for him to turn everything over to creditors and start over, but he decided to stick it out. He had to let some people go and get lean,” says O’Neal.

“One thing he did was divide the profits equally among the employees. They were making very little money, but they managed to stay in business. Finally, they started getting some jobs around Birmingham from American Cast Iron Pipe and others, and business started to grow.”

In 1937, Southern Steel Works added a steel distribution division, one of the first in the South. The move paid off a few years later, as the United States began preparing for World War II. Southern Steel received large orders for fabricated steel to be used in building Army and Navy bases, as well as a 16,000-ton dry dock for the Navy.

Kirkman O’Neal already had drawn up plans for a new modern plant to be located on the east side of Birmingham when the attack occurred on Pearl Harbor. The U.S. government gave top priority to the construction of the plant, and it was completed in barely six months. Over the next three years, that plant produced as many as 60,000 general-purpose bombs per month, along with such structures as gun platforms and dry docks.

ABOVE A bomb making team at work at O’Neal during World War II
 

That experience propelled the company to steady growth over the next two decades. The name was changed to O’Neal Steel in 1956, with Emmet O’Neal taking over as president in 1959.

The first of several economic challenges for the company began in the 1960s. So in 1969, Emmet O’Neal decided to close the company’s fabrication business and focus solely on the distribution and processing of metals.

“We were one of the earliest steel distribution companies in the South,” Craft O’Neal says. “My father believed that would be in the best interest of the business. That was a pivotal time. On several occasions throughout our history we’ve had to right-size our business to the economic conditions we faced, and that was one of them. We had to reorganize and kind of reinvent ourselves in a way. That’s how we’ve managed to be successful, by responding to the market.”

By the 1980s the company had grown throughout the Southeast, leading to the 1985 purchase of Shelby Steel, a regional distributor and processor located in Shelbyville, Indiana.

“More and more companies were asking us to process for them, to cut materials,” O’Neal says. “Shelby was much more into the processing than we were, and they really helped our business as a whole focus in that area. They brought in a lot of expertise, and we started doing more processing.”

Shelby was fully absorbed under the O’Neal banner.

Oxy-fuel cutting of a steel plate at O’Neal Steel in Birmingham

 

Then in 1997 the company acquired its first stand-alone subsidiary, Colorado-based Metal West, followed in 1998 by the opening of dedicated weldment operation in Monterrey, Mexico. That began the company’s major expansion efforts into foreign markets.

“A lot of it was diversification into new products, new industries and new geographies,” Craft O’Neal says. “That was our focus in expanding, for diversification.”

The most significant diversification occurred in 2004, when the company purchased Aerodyne Alloys, based in Connecticut. This enabled the company to begin working with high-value nickel, cobalt and titanium products, primarily for the aerospace, medical and power-generation markets.

“Suddenly we were dealing with products that were $40 a pound and higher, while previously we were selling products whose highest value was $1 to $2 per pound,” O’Neal says. “That really took us into a new era for our business.

“We expanded very rapidly after that, adding several companies in the high-performance metals group all over the world. We became very diversified, selling materials for general construction all the way up to titanium rods for implants.”

The company acquired TW Metals out of Pennsylvania in 2005, the biggest acquisition in company history, which further expanded its geographic reach worldwide. But, like many businesses, O’Neal Industries struggled in 2008 and 2009 because of the recession. It was during this time that the current organization was established, with O’Neal Steel acting as a division of O’Neal Industries.

“Business turned down, and we had to right-size and restructure again,” O’Neal says. “We’ve been more focused internally since then, but things have improved, and now we’re looking for growth acquisitions.

“There has been a lot of volatility over the years, a lot of changes with technology. We have to continually reinvent ourselves to stay ahead of the curve and stay progressive. If we can continue to do that and stay focused on the customer, we’ll be in good shape.”

And continue to grow. Just like a certain magnolia tree.

Cary Estes is a freelance contributor to Business Alabama. He is based in Birmingham. Photos courtesy of O’Neal Industries

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