Website Closers® presents a company that has served the Steel Pipe Industry for many years. It is internationally recognized for its professionalism and for achieving client satisfaction with both products and services.
That includes the OCTG (Oil Country Tubular Goods) industry, which refers to the production and distribution of high-quality steel pipes used to explore and extract oil and gas from reservoirs. The market is a critical component of the energy industry, and its growth depends on the demand for oil and gas. The vertical is primarily driven by the increasing demand for oil and gas in developing countries and technological advancements, such as the use of advanced alloys and coatings.
The product types include casing, tubing, and drill pipe, while the material types include carbon steel, stainless steel, and others. The applications of OCTG include onshore and offshore drilling, as well as shale gas exploration.
This company’s products include new, secondary, and rejected ASTM A-252 piling steel pipes and sheet piling for the construction industry as well as API 5CT and API 5L for the oil industries and OCTG applications.
No working capital requirements are necessary to continue operations as they currently are. However, capital would be beneficial for a buyer looking to expand and is contingent on expansion size.
The most significant growth opportunity is purchasing imported materials and renting a personal yard. The company occasionally uses external yards on suitable items, but owning material and a yard would allow for immense growth. Yards are in high demand and offer rental opportunities for other businesses in the pipe industry as an additional revenue stream.
The business employs minimal marketing tactics for lead generation. Management relies chiefly on a weekly email campaign to 2,600+ subscribers located domestically and abroad.
The newsletter typically results in multiple demands, but the team struggles to respond to all queries. Subsequently, hiring a sizeable staff would drastically increase the company’s revenue. This would likely include at least four salespeople, two logistics and handling staff, a campaigning and marketing manager, and an IT specialist.
In addition to email marketing, the business participates in the US’s largest convention of pipe sellers.
Their typical customers are those engaged in the OCTG business and construction in Canada, Europe, the US, and Latin America.
A new project goes through the following process, handled mainly by the owner:
Two staff members work full-time in sales, and another works part-time in logistics.
Usually, seasonality follows market trends for the oil industry and piling jobs. As is the case with petroleum in the cold months, sales are characteristically slower. However, they pick up considerably in warmer months and compensate for any slow periods.
This company has operated without equipment, investment, or equity for the past three years but has achieved healthy profits. Aside from hiring additional staff and renting or buying a yard, the opportunity to scale by investing in prime OCTG is tremendous.
Currently, the company’s strength lies in the structural and surplus markets. Management has cultivated solid relationships with their distributors and consistently makes sales and profit; however, the largest sector in the industry is prime pipe. Pursuing this endeavor requires an investment in both yard and pipe but would likely yield the most fruitful results.
Becoming a retailer of prime OCTG is not only the most profitable avenue but is also the most secure since the investment stays in stock in slow times. One can hold and wait out market fluctuations and always profit from inventory.
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