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SouthStar Steel shines
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November 20, 1996: 2:28 p.m. ET
Jobless immigrant with no Green Card helps create $70M-a-year firm
From Correspondent John Defterios
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CHARLOTTE, N.C. (CNNfn) -- When Klaus Becker decided in 1983 go into business for himself, the German-born immigrant's future looked pretty bleak.
"There I was, without a job, without big savings, three years after university, newly married, my wife was pregnant, just had a new house, IRS decided to audit my (1982 taxes), and immigration services wanted to see a Green Card I didn't have," recalled Becker.
But today, Becker's company, SouthStar Steel, expects 1996 sales of $70 million -- giving the firm a blistering five-year growth rate of more than 3,000 percent.
That achievement helped make Becker, 43, a finalist this month in Ernst & Young's National Entrepreneur of the Year competition.
Charlotte, N.C.-based SouthStar imports and distributes stainless-steel bars, with nearly 30 percent of all such products passing through one of SouthStar's five warehouses.
Steel-service centers, which supply end users like automakers, rely on SouthStar to provide quick access to high-grade stainless steel.
Acting as a middleman, SouthStar helps service centers avoid shipping hassles or large minimum-order requirements.
"The value we add is really the availability of the product," said SouthStar President Bill Gall.
For overseas producers, European-born Klaus also serves as a friendly guide to the U.S. steel market.
"The American market has a very rough reputation outside," Becker said.
It's a big market ... (and importers) are afraid to (come) here. Suddenly, a European comes, speaks the language and offers to keep the penetration costs down."
Becker started a predecessor to SouthStar at age 30, when a steel firm he had been working for went bankrupt in 1983.
The lesson of seeing his employer go under made Becker a crusader for cost control, while also driving home the importance of keeping creditors happy.
Said Kathryne Schrell, SouthStar's vice president of finance: "We court our creditors as much as we court our customers, and that has been a great advantage to our growth. Our creditors love us."
Now, Becker believes SouthStar could eventually become a $250 million-a-year business -- but only if he sticks to the principles that have brought the firm this far.
"If we were to lose control (and) make crazy decisions, then suddenly 50 to 60 people would be without a pay check," he said. "That not only has an effect on those 60 people, but also on their families. ... I consider that a very integral responsibility." (294K WAV) (294K AIF)
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