It is difficult to engage in any discussion these days without all roads ultimately leading back to the topic of the COVID-19 pandemic. The situation, both domestically and globally, has certainly reshaped how we are forced to operate our businesses and our lives. In 8 short months, we have evolved dramatically as to our basic business practices and how we maintain our commitments to our customers and to our stakeholders. Teams and Zoom meetings have replaced most in-person interaction between us and our customers and suppliers. New and elevated responsibilities as to maintaining a healthy work environment have challenged all of us to find an effective balance between lockdown and allowing our businesses to thrive. But in the end, we remain dedicated to our pre COVID-19 mission of serving our customers and supporting and promoting a robust manufacturing economy.
So, while the COVID effect cannot be minimized, it is important to keep in mind the non-pandemic developments related to our overall manufacturing sector. For those of us linked to the Steel industry, the last 12 months have been a very dynamic period. In our December 2019 edition, we discussed the acquisition of AK Steel by Cleveland Cliffs. This marked a significant merging of a traditionally upstream raw material provider with a major domestic steel producer focused on and closely connected to the ultimate consumers of steel products. This was particularly poignant for those of us engaged in the electrical steel sector, as AK Steel had become the sole domestic producer of certain electrical steel products. That event has not affected AK Steel’s ability and commitment to serving the domestic electrical steel market, and likely makes them a stronger provider to the electrical steel sector going forward.
On the heels of that development we are seeing another major acquisition in the works for Cleveland Cliffs wherein they are seeking to purchase Arcelor-Mittal Steel. If successful, this would make the combined holdings of Cleveland Cliffs the single largest producer of steel in the USA. To say that the M&A activity on the domestic steel industry has been dynamic since the most recent “turn of the century” is a bit of an understatement. By the end of 2021, we could see the top 5 domestic steel producers account for >95% of the market.
And by the time this issue is received, we will have navigated our way through another national election cycle. The results will most certainly influence our overall manufacturing sector. And while the airwaves are dominated by an array of topics tied to the elections, the resurgence of our domestic manufacturing economy over the past 4 years seems to be pushed in the background. That has been a very positive development for our economy, and we encourage everyone recognize that a robust manufacturing economy is the tide that raises all boats.
Sko-Die continues to invest in our business with an eye towards a vibrant manufacturing emphasis in our overall domestic economic agenda. As we will share in our end of year edition of our newsletter next month, we are wrapping up our latest physical plant expansion and continuing to add equipment and resources to support our commitment to our customers. We are proud to begin our 74th year in operation as a manufacturer. We remain ever thankful to our customers and to our suppliers that continue to favor us with the support that we need to improve and expand our business with you.
We wish everyone the best of health as we navigate through the current circumstances and continue our path toward more normal business conditions in the years to come.
At Sko-Die we remain…