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Reprinted from:
Pittsburgh Business Times

New Owner Brings MetalSite Back Online
Christopher Davis

Pioneering online metals marketplace MetalSite has been re-launched by its new owner, Point Breeze-based Management Science Associates Inc.

MSA purchased MetalSite and its subsidiary, ScrapSite, in August, after the two Web sites suspended operations in June. Details of the transaction were not released.

"MSA MetalSite and MSA ScrapSite are live, online and ready to conduct business," MSA founder and chairman, Alfred Kuehn, said in a news release.

Two steel service centers -- Middletown, Ohio-based JR Metals Co. and Alliance, Ohio-based Stark Metal Sales Inc. -- have posted more than 90 items of hot-rolled, cold-rolled and coated-coil products for sale on the site at http://www.metalsite.net, according to Patrick Gallagher, president of MSA MetalSite.

Mr. Gallagher said he expects the majority of MetalSite's 150 former sellers to resume doing business on the site.

Founded in 1998, MetalSite was the first of its kind. It brought metals buyers and sellers together to conduct transactions over the Internet. Before suspending operations, MetalSite had its best month on record -- hosting the sale of some 90,000 tons of steel transactions. It also saw the total number of site transactions climb from 9,000 in 1999 to 50,000 in 2000.

Its revenue doubled last year to somewhere between $2 million and $4 million. The company declined to give more specific figures. ScrapSite, launched a year ago, had more than $60 million in transaction volume.

Still, MetalSite's recent successes were not enough to keep it going. This summer, the company said its industry investors, which included Bethlehem Steel Corp., LTV Steel Corp. and service center Ryerson Tull Inc., had been supportive partners, but were unable to continue to fund the business. Both Cleveland-based LTV and Bethlehem are operating under Chapter 11 bankruptcy protection.

MSA's re-start also comes at a time when the steel industry is in trouble. Inventories and excess capacity are up, prices are down and cheap imported steel has been blamed for forcing about two dozen domestic steelmakers to seek bankruptcy protection over the past several years.

The company faces competition from other metals e-commerce ventures, such as Straightline Source -- an online metals service center launched last month by United States Steel Corp.

MSA used the downtime to review more than 300 suggestions for improvements from MetalSite customers and to make operating changes designed to speed service and simplify operations for buyers and sellers, according to Mr. Gallagher.

MSA Process Automation Solutions & Services Inc., an MSA spin-off that specializes in steel-mill automation, will integrate its process automation systems with the MetalSite and ScrapSite software, in an effort to reduce operating costs for steel and scrap industry participants.

Mr. Gallagher pointed out that MSA already has had success in developing supply-chain management solutions for U.S.- and foreign-based companies and has worked with the majority of North American steelmakers in the past.

MSA said previously that Richard Riederer, founder and chairman of MetalSite and the former CEO of Weirton Steel Corp., will serve on the new firm's board of directors.

Mr. Davis may be contacted at cdavis@bizjournals.com.