Alaska Steel Co. Thrives in Unglamorous industry.

Dan Nelson doesn't expect to see Alaska Steel Co. on the cover of Vanity Fair, but he thrives in the dull drudgery of the steel business.

"Our business is very mundane ... but I sure love it," said Nelson, owner of Alaska Steel, the 40th company on Alaska Business Monthly's 1999 Top 49er list, which featured the top Alaskan-owned and -operated businesses, based on 1998 gross revenues. "We work hard to eliminate excitement because excitement is usually brought about by crises."

And a crisis is the last thing someone wants when moving steel beams and plates that test the capacity of 10-ton cranes and weigh as much as Maggie the elephant poised on a Ford Expedition. When dealing with loads that big, it pays to stick to predictable work patterns, not thrills or frills.

"It's a lot of routine," said Nelson. "A piece of steel is a piece of steel. There's very little differentiation, so having it there, having the right one and providing the other elements of customer service is how we differentiate ourselves from the competition."

Unlike other Alaska companies that deal in metal, Alaska Steel avoids fabrication. Aside from reinforcing steel, they leave the manufacturing to the buyer.

Otherwise, "we would be competing with our customers," explained Nelson.

Instead, they focus on stocking and supplying metals of all types, sizes and grades. On a facility with about an acre of indoor space on Dowling Road, the company stocks close to 13 million pounds of metal.

Inventory ranges from steel beams almost two bus-lengths long to trailer components and 20-foot by 8-foot steel plates as thick as a child's thigh. About 80 percent of the company's business comes from major projects like the Alyeska Prince Hotel and the Northstar and Alpine oil developments, but they also sell odds and ends for grills, truck beds, snow machine trailers and other smaller projects.

"You'll see guys walking out with pieces of angle and throwing it in their trunks," said Nelson.

When a customer needs it, they even find exotic metals with exacting specifications, said Carl Grotts, vice president and head of purchasing. Though not a major component of the business, the company gets stuff like titanium for military aircraft applications and high-grade steel for ulu makers. More common, they supply aluminum to boat builders and others in the fishing and marine industry.

Still, the company's biggest claim to fame comes from its inventory of low temperature grades of steel. These products go through a rigorous series of steps at the steel mill to enhance their performance in cold, explained Grotts, who worked his way from the yard to management and has spent over 25 years in the steel business.

Alaska Steel stocks more low-temp steel than any other distributor in the Pacific Northwest and has about 400 tons on the floor, he said.

Handling this kind of metal requires relentless attention and training. Most of the employees start in the yard and work through the ranks, learning the ins and outs of the business and mastering the skills necessary to keep everything identified and organized.

When a customer like Alyeska Pipeline Co. needs a certain grade of steel there's not much room for mistakes, said Nelson.

A reliable staff also ensures that orders get to the customer by the fastest, most economical means. Years ago, the company shipped most of its steel to Alaska from mills in Korea and Japan, but now it gets about 90 percent of its metal from mills in the Lower 48, which saves a bit in transportation costs.

Nelson likes selling American metal almost as much as he likes doing business in Alaska. He brought the company out of bankruptcy in 1982, closed the facilities in Portland, Spokane and Seattle and then opened shop in Alaska.

"I opened the Anchorage facility because I love it here," said Nelson, who came to the state to work in construction just after the 1964 earthquake. "It's probably not the best reason for a business decision, but it worked out good."

Over the years, Alaska Steel grew by opening quarter-acre sites in Fairbanks and Kenai, and maintaining inventory in Homer, Seward, Bethel, Dutch Harbor, Wasilla and Prudhoe Bay through arrangements with other suppliers.

Over the last six years, the company has doubled in size, according to Nelson. Exact revenues are hard to track since sales are grouped in with the parent company, Circle N LLC, but Alaska Steel earned the bulk of Circle N's earnings of $23 million in 1999.

Established about five years ago, Circle N encompasses Circle N Real Estate and Vester Corp., both out of Anchorage, and Denali Industrial Supply in Fairbanks, which sells a wide range of fasteners, welding equipment and tools. The real estate business focuses on industrial property and Vester Corp. buys the assets of companies in financial trouble, then leases the equipment back to them.

In all, Circle N employs 60 to 70 people, but 50 of them work for Alaska Steel, the biggest of Nelson's holdings.

Since Nelson is all but retired and considers finance his forte, he leaves the business of steel to Horace Griffith, who came to the company about 12 years ago after 20 years with Pacific Metal Co. of Portland.

Once the two men met, they found an immediate kinship. When Griffith told Nelson he would love to work for a company like Alaska Steel, Nelson didn't skip a beat.

"I said, 'well, why don't you start on Monday,"' said Nelson.

Griffith agreed, despite not knowing his job duties or pay rate, and eventually became chief operating officer.

"Since Griff has been in that role, the company's growth has been outstanding," said Nelson.

May was the biggest month the company has ever had, but Nelson describes business as good, not great. Projects change from year to year and anything can happen in the Alaska business climate, he added.

"But we're always ready for the biggest year yet."