Piping in business via the Internet

Its biggest order this year is for an Austrian power plant.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
WARREN -- A local pipe distributor that was stung by the decay of the Mahoning Valley's industrial base has succeeded by reaching out to customers all over the country.
But Specialty Pipe & amp; Tube hasn't stopped there. It now is using the Internet to line up more international business.
Its biggest order so far this year is supplying pipe for construction of a power generation plant in Austria.
The local distributor successfully bid on the job over the Internet.
Must be flexible: While only about 5 percent of company orders are direct exports, those shipments demonstrate the company's flexible business model, which has allowed it to thrive since it was founded in 1964, said Ron Granato, company vice president.
"The secret of the business is adjusting to new sectors. The sectors now gearing up are energy and power generation," he said.
Specialty Pipe is preparing for its future by moving next month to a new plant it has built on Union Street in Mineral Ridge.
Steve Baroff, company president, said the move was forced because its operations are incompatible with Warren Recycling, which moved onto the property on Martin Luther King Drive several years ago. Warren Recycling operates a transfer station for municipal garbage and a construction-demolition debris landfill.
The new site nearly doubles Specialty Pipe's space for inventory to 11 acres and provides a more efficient work layout. The company employs 30.
Baroff, who recently became president with the retirement of Jim Beatty, wouldn't release sales figures but said the amount of steel shipped has been steady, which he considers an accomplishment given the downturn the steel industry has experienced.
What they do: Specialty Pipe buys pipe from steel mills and distributes it to companies that make items such as well-drilling equipment, hydraulic cylinders and machines that make automotive parts.
All of its pipe is thick-walled, seamless pipe that can withstand high pressure. The thickness of the walls of the pipe range from three-eighths of an inch to four inches.
That sort of pipe was in high demand here when Davidson Pipe Supply of Brooklyn, N.Y., founded Specialty Pipe here. Companies that served steel mills, such as Wean, United Engineering and Pollock Co., provided local demand and there were also customers in Cleveland and Pittsburgh.
"This was a hotbed," Granato said.
That demand began drying up about 20 years ago, when many of its major customers began closing.
Quick reaction to change: Specialty Pipe changed its business model and began looking to the southeastern United States and other places where companies were setting up plants.
Baroff said Specialty Pipe succeeded in these other areas because of its quick turnaround on orders and strong customer service. Most orders are filled in less than 24 hours, he said.
Granato said Specialty Pipe moves quickly on orders because of its relationships with its suppliers. Specialty Pipe works with companies who can provide extra services that its customers want, such as heat treating, boring or machining.
Heat treating increases the strength of the pipe. Boring makes the interior walls smooth, which is needed for hydraulic cylinders.
Specialty Pipe operates its own pipe-cutting operation.
The company also has had to be flexible in the types of orders it seeks, Baroff said.
A few years ago, it was filling many orders in the automotive tooling industry. Now that industry has cooled so the company is looking to energy and power plants.
The company provides pipe that is used to carry gas and liquids in power plants.
The company's biggest order last year was to supply pipe used in boring coal mines in West Virginia.
It also is heavily involved in gas and oil drilling in southern states, but those orders are filled by its Houston-based sister company, Specialty Pipe of Texas.
In the future, more opportunities will open up in international markets, Baroff said.
The move to drop trade barriers among North American counties and South American counties will create new business in Latin America, he said.
Those countries will send more raw materials here, while U.S. companies will ship more finished goods there, he said.