Global Fastener News

2010 FIN – Johnson at STAFDA: Watch Competitors on ‘Buy American’

November 24
00:00 2014


December 14, 2010 FIN – Educate your sales team on the “ins and outs” of the “Buy American” provisions of the Economic Stimulus Act because “they will likely encounter situations in which the competitor is attempting to supply non-compliant products,” Andy Johnson advised the Specialty Tools & Fasteners Distributors Association.

In the annual STAFDA State of Manufacturing address, Johnson, president of Mar-Mac Wire of McBee, SC, traced the origin of Buy American legislation back to 1933 with a law encouraging domestic products in federal government’s direct procurements.
The Surface Transportation Assistance Act of 1982 expanded coverage for the nation’s infrastructure.
The American Recovery & Reinvestment Act of 2009 – “Economic Stimulus” – requires manufacturing processes for steel construction products should take place in the U.S. and defines that to include melting, pouring and rolling.

Mar-Mac “has noticed a change in ordering patterns” with a “more conscientious effort to ensure compliance from the state level all the way down to individual contractors,” Johnson finds.
Mar-Mac is receiving more inquiries for products that can be certified to the Buy American requirements.
“In the early years of Buy American legislation, there was a lot of leeway on how to interpret those provisions,” Johnson observed. “It seems attempts by the economic stimulus to tighten the interpretations were successful based upon the reception in the market.”
Now STAFDA manufacturers “must ensure that we have data collection and product marking processes in place to trace the raw materials consumed in our production processes through to the products that we provide to distributors,” Johnson advised.
For STAFDA distributors there are “chances to grow your revenue stream in a down economy,” Johnson said.
“There are projects across the country being funded under the ARRA.” Projects can be identified on various government websites and subscribed services.

As a 60-year-old family firm, Mar-Mac has evolved from a one-operation manufacturer to adding importing and distributing roles to concrete construction wire products, tools and accessories.
Johnson has risen from entry level accountant in the 1990s to president in 2009.

Steel Volatility
In the past, the steel industry had one primary cost driver and steel markets were national if not regional.
“We’ve seen unprecedented volatility in the steel and wire market over the past six years,” Johnson reflected. “The events of 2010 nearly defied economic principles in that there has been inflationary pricing while supply is abundant and demand is relatively low.”
Despite typically low construction activity in Q4, steel prices increased. Steel is “truly a global economy whereby events in Istanbul, Dubai and Shanghai can affect the price of rebar in Memphis, Denver and Houston,” he observed.
In the past 18 months a new group of speakers has been added to steel conferences: Financial markets.
“The steel market has caught the eye of financiers in London, Shanghai and Chicago,” Johnson pointed out. Steel futures were introduced by financial exchanges.
The financial markets are looking for profits in steel futures in a volatile steel market.
Futures contracts “help professionals manage risk in relation to price volatility,” Johnson suggested.
Johnson advised STAFDA members “forget history!” because the market is “full of too much turmoil and change.”  ©2010 / 2014 Fastener Industry News.
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Related Links:

• Specialty Tools & Fasteners Distributors Association

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