Steel distribution group Klöckner & Co feels relatively immune to the impact of tariffs imposed by the US government, its chief executive Guido Kerkhoff said during a conference call on Wednesday.
The Germany-based group has operations in the USA as well as Mexico, which together make up a larger share of revenue than Klöckner’s European operations, in Germany and Switzerland. For its US sites, Klöckner sources 97% of product tonnage from US mills. Hence, “the penalty duties affect us only indirectly, if our customers are affected,” Kallanish heard from Kerkhoff. The firm’s pricing is not affected at all, he added.
Given the US government’s target of near-shoring the manufacturing industry, Klöckner’s local business range would in fact grow bigger. “We are a local player, after all,” Kerkhoff maintained.
Regarding the company’s warehouses in Mexico, 45% of the material can be sourced within Mexico, and another 25% is sourced from the USA. “Our sites are approved by the USMCA [United States-Mexico-Canada Agreement], so that we can enter the US market,” he explained. Many of Klöckner’s competitors, but also customers like some carmakers, are much more dependent on sourcing from overseas, he noted.
The company recently completed the acquisition of Haley Tool & Stamping near Nashville, Tennessee. The move expands Klöckner’s manufacturing capabilities with the addition of stamping presses, allowing it to leverage operational synergies across its locations in the region.
Christian Koehl Germany
