The changing landscape of roll forming

The explosive growth of regional metal roll forming businesses in the U.S., coupled with an influx of foreign raw material has had a significant impact on established companies that once exclusively supplied wall and roof panel for the metal construction industry. Rural Builder interviewed two established companies—McElroy Metal and Everlast Roofing Inc.—to see how they are competing in this tumultuous climate.

IDENTIFYING THE COMPETITION
The issue of the influx of foreign raw material is complex but one important note from Craig Covell, co-founder and president of Everlast Roofing Inc., is the issue of how steel is made and governed elsewhere in the world as compared to the U.S.

“What happens globally, be it Australia, Europe, Canada, the steel mill is very much determining the specifications of coil stock. The steel mill controls the complete process. They specify the gauge and substrate right down to the paint systems and color palette. For example, where they offer a palette of 25 or 30 colors, they are the primary supplier in those markets, so those colors are the colors offered in the marketplace. In the U.S. market place, the OEM manufacturers determine what their specifications are: paint systems, colors, gauges and substrates, so it brings variability into the supply chain.”

That variability brings confusion to the marketplace, making it difficult for the consumer to determine which product will provide the maximum performance and longevity. With so many players in the game, price becomes a main selling point, while quality can vary widely.

“There are good steel mills domestically, and there are bad ones. There are good steel mills foreign, and there are bad ones. [In the U.S.] we’re making better products in the world on the high-end but we also have people ‘skinnying’ down the product,” Covell said.

REGIONAL ROLL-FORMING COMPETITION CHANGING THE INDUSTRY 
In the U.S., historically, a number of companies have taken the steel coil and fabricated their own products, then sold them through distributors who then sell to the builders.

About 20 years ago, regional roll-forming businesses began to spring up in the south, cutting out the distributors and going direct to the builders. The proliferation of those smaller guys during the past 10 years as they spread north, east and west, has made a major impact on the industry. Cutting out the middleman has lowered prices on end product, but has also challenged the old model of distribution.

Ken Gieseke, vice president of sales at McElroy Metal, has also been on the front lines of the change. McElroy is located in the south in Bossier City, Louisiana, in the region where the trend for regional roll formers began.

“The barriers to entry are not real high,” Gieseke said of the smaller start-ups. More and more affordable machines have made it possible and lower price points for the end roof and wall products have made it attractive to customers.

“I can’t paint a broad brush,” Gieseke said. “Like any industry, when you have that many people doing something, you’re going to have some that don’t do it well. I would argue this even against my larger national competitors.”

Covell takes it a step further: “You have regional roll formers that are educated, that really want to have a quality product and go out of their way to sell a quality product.” He sees this as healthy competition.

But he also sees too many regional roll formers who don’t know what they are selling. “Some of them think they’re doing a good job, but they’re not,” Covell said. “They aren’t asking the right questions.” In essence, they don’t know enough about the metal, the coatings and paint, and how to properly fabricate metal.

What bothers Covell equally, however, are those larger, established companies that have faced this newer competition of regional roll formers by lowering the quality of their own products and are now making a product less durable than some of their best regional competitors. In order to compete “some large roll formers have actually thinned their products up and lowered the quality of the top coats and substrates so they can get their product into the hands of [distributors] at a lower price,” he said.

Caught in between is the consumer who must educate himself about what he needs versus what he is really buying.

panel shot

Photo credit: Everlast Roofing

SEPARATING THEMSELVES FROM THE COMPETITION
Covell has done his soul searching and has chosen his own path as a national roll former. “We have to sell even higher-value products, that’s our approach,” he said.

That’s not an easy path when price is such a focal point in the market. “I always say to … my sales team, it’s easy to make a decision of what you want your coil specification to be from a quality perspective. The difficult part is how you’re going to take that to the marketplace at a higher price point and make sure that the customers perceive the quality you’re offering,” he said.

Proprietary products are naturally something that companies use to separate themselves from the competition. Both Everlast and McElroy have teams of engineers tasked with developing new ideas and improving established products. They can argue that their products are based on real science.

The paint system is important. “We use all-ceramic pigments,” said Frank Miklos, director of sales for Everlast. The competition may be using coil that has been coated with less expensive organic pigments that will break down over time.

McElroy uses a top-of-the-line PVDF paint system. “That’s the paint system that’s been used for decades,” said Gieseke. “And it’s our belief that PVDF paint systems should be just as important to post-frame buildings … so we’ve made that available on all of our products.”

Another factor heavily emphasized by both companies is the thickness of their metal, the thickness and quality of the coatings, and the transparency in providing that information to the customer.

Photo credit: McElroy Metal

Photo credit: McElroy Metal

INVENTORY
Part of the affordability of small roll formers comes from the fact that they don’t have the overhead of inventory. Gieseke spins that in another direction, contending that the lack of inventory can mean a slow-down in the overall process when special orders are necessary, or even worse, the use of lower- or inconsistent-quality products.

One area in particular where unproven roll formers may not be properly prepared, Gieseke noted, is in the inventory of trim versus panel coil.

“There are different tensile strengths and we use a different tensile strength for trim coil than we do for panel coil,” Gieseke said. “The panel coil is typically harder and if you make trim out of it, a lot of times you can have cracks. A lot of people don’t invest in the inventories. We think it’s important to have trim coil that’s softer, that will be used specifically for trim and not one that’s a combination.”

Frank Miklos sees the importance of inventory as playing a key role in the consistency of the end product. If you need additional panel, is the inventory available from the same coil batch? Slight differences can be very noticeable. There can also be issues down the road with fade variation.

“It can vary from shade to shade from supplier to supplier,” said Miklos. A roll former may “buy a coil from one coil supplier, and another one from another coil supplier. One may be one paint system and the other one another paint system and they have a shade variation. The biggest thing I see is that there’s no consistency.”

That lack of consistency may be fine if the building is a basic shade-and-shelter structure nobody sees, but not so fine if it’s on the customer’s house or garage.

LET THE BUYER BEWARE
There are ways you can improve your chances as a builder in buying the quality of roof and wall panel you expect. It principally involves learning about metal, and learning what questions to ask your supplier. Beware when they can’t—or won’t—answer your questions.

Gieseke said that too many roll formers are not upfront about what their substrate coating is. “They’re basically selling painted metal,” he said. “In our case we always tell people, here’s your substrate, here’s your coating. We always encourage all our customers, and any end users, to make sure whoever is going to install their building, ask them what their coating is, ask them what their substrate is. If they won’t tell you that’s a red flag. They should know.”

Being able to determine quality based on what it looks like is difficult. “The big thing that we run into, the panels all look the same [when they’re new], you really can’t tell [quality] by looking at the panels,” Miklos explained. “… Sometimes you can tell because the profiles are not as crisp or strong, but looking at the metal it looks to be the same. And that’s the hardest thing for us to convince a customer, that there is a big difference. After time passes, then they see it. Ok, it was really cheap to get it … but now they’re paying the price,” Miklos said.

Whether you are buying from a regional roll former or a national company here are some important points to consider:

The thickness of the metal does not determine the performance against corrosion. Pre-treatments, coatings and paint are what allow metal to perform against corrosion.

Thinner metals can lead more easily to oil canning, waviness at overlap areas, and over-drilling of screws into the metal. The latter can lead to dimples and the early degradation of the paint.

Instead of concentrating on gauge, learn to understand the importance of thickness and weight, not only of the metal, but of the coatings. What is the true base-metal thickness? What does this weigh per lineal foot? What types of metallic coatings, pre-treatments and topcoats are being used and how substantially are they applied?

Aside from all that, and not even covered here, are issues of roll-forming equipment and whether or not your panel is being roll formed properly.

It’s a dizzying array of things a metal builder needs to know, but a panel’s life is only as good as the weakest point, so wherever you cut it, scratch it, roll form it, penetrate it, that’s where the panel is going to break down first.

When it does break down, your reputation as a contractor may go with it.

Miklos concluded: “For contractors, it’s their reputation at stake. If they start selling a product that’s inferior, their reputation is going to get beaten up. We do a nice job of working with our dealers to get consistent ordering for contractors. That’s where we pick up most of our buyers, it’s the larger contractor that wants a consistent product because it’s they’re reputation.” RB

[Article by Sharon Thatcher, originally published in September 2016 issue of Rural Builder magazine under the title: “Rolling with the Competition: The Changing Landscape of Roll Forming”]

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