Kivort Steel takes steps to succeed in a bad economy

A team approach has helped Kivort Steel of Waterford build its sales numbers, which last year topped

Categories: Business

Robert Kivort runs a multimillion-dollar company in Waterford.

Yet, you won’t find the title “president” next to his name on the company’s Web site, nor any special parking spot in front of the company’s headquarters at 380 Hudson River Road.

Instead, you will find a regular Joe who believes titles create barriers with his mostly blue-collar staff of 25. “I hate titles and I don’t like parking spaces with names on them,” said Kivort, 41.

Kivort and his partner, Michael Polishchuk, run Kivort Steel, a privately owned distributor of structural steel, stainless steel and aluminum products. It had sales last year of over $12 million.

On any given day, Kivort, dressed in dungarees and work boots (he also forgoes suits and ties), is as likely to be working the phones along with the rest of the sales staff as he is to be driving a load of material to a customer, taking out the garbage or cleaning snow from the parking lot.

“I prefer to look at this as a team,” Kivort said.

But don’t be misled by Kivort’s non-traditional business approach. Behind the workingman’s facade lies a sharp business mind, backed by a master’s in business administration from George Washington University and a lifetime of experience working in the metals industry. He started as a laborer with Kivort Steel, earning the same pay as co-workers.

The knowledge and experience have helped the niche company survive in a tough business and have allowed Kivort Steel to create an engaging work environment for staff. The company offers profit-sharing, enhanced retirement benefits and other incentives that larger companies are finding difficult to provide in these lean times.

Since taking over the company from his father, Stan, in 1997, Kivort and Polishchuk have helped Kivort Steel’s sales grow 10 percent each year. The exception was 2001, when the terrorist attack of Sept. 11 sent shock waves through the nation’s economy.

Kivort calls the growth controlled in that the company has not grown faster than its ability to meet customer needs. “We take a conservative approach to business. If we are growing at too fast a rate, it hurts our reputation for service,” Kivort said.

Service is extremely important to Kivort Steel. “We do what it takes to get it done,” Kivort said.

Change of location

Kivort changed the direction of the company when he took it over. He thought the company would do better by shedding the scrap metal side of the business and moving into distribution. He also believed the business would do better by relocating closer to its customers.

Kivort’s grandfather, Abe, a native of Vilnius, Lithuania, started the business in 1929 as a scrap metal company in Schoharie County. Robert’s father, Stan, now 72, was comfortable with keeping the business and location as is.

“He had made a good living for himself and his family,” Robert said of his father. “We could have moved to this area earlier but my father had no desire to do so.”

Robert Kivort had to convince his father to make the changes, a not-so-easy task, he admits. “We had a successful business, but we had tremendous potential if we located closer to our customers. That is Business 101,” Robert Kivort said.

The company’s customers range from large businesses like Schenectady Steel to small welding shops.

Stan Kivort eventually reconciled to the idea and turned the company over to Robert in 1997. Stan still works for the company, making collection calls and the occasional delivery. “He is an ambassador of the company,” Robert said.

When Kivort Steel relocated to Waterford, the company found itself overwhelmed by customer orders, Robert said.

“People knew our name when we came here and customers were ready for us. We doubled our sales. The market was ready for competition,” Kivort said.

“We never closed. On Friday we moved from Schoharie County and opened in Waterford on Monday with new people and new machinery.”

Growing again

Now, Kivort and Polishchuk are preparing the company for its next phase, a $3.5-million expansion. The company is seeking approval to add a 20,000-square-foot addition to an existing 26,000-square-foot warehouse facility. The new structure will be enclosed and will contain additional equipment, allowing the company to expand, Kivort said.

“We have found that our customers demand a deeper inventory and that they want us to process some metal,” he said. Processing involves sawing, shearing and burning stock to customer specifications.

Kivort said once the new structure is completed, the company will hire three more people and eventually 10 more within a few years.

“We need to do a better job of stocking a greater variety of sizes and grades of materials,” he said. “Twenty percent of our inventory generates 80 percent of our sales. We try to have everything so that we don’t lose an order.”

Inventory control is key to Kivort Steel’s reliance in a tight market, Kivort said. “We keep as low an inventory here as possible and everything we deliver is presold,” he said.

Kivort said the company has “exceptional relationships with our suppliers. We know our people well, we pay promptly and we have large lines of credit.”

Quick turnaround and a solid system of checks and balances, to prevent shipping and delivery mistakes, help keep the margins healthy, Kivort said. Kivort Steel moves about 200 tons of metal a week.

Filling a void

The company to date has weathered the economic downturn because its customers still have work to do. The sales staff also has an in-depth knowledge of the market, giving it the ability to react quickly to change. For instance, when American International, a main competitor, downsized, Kivort Steel quickly entered the vacuum. It hired a laid-off American International sales representative and went after customers that company had shed. Kivort said the move generated a lot of business for his company.

“There is always something that comes along to attract new business,” Kivort said.

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