Where Are They Now: Steve Zelnak

Zelnak.

Steve Zelnak retired as chairman and CEO of Martin Marietta 11 years ago, marking the end of an illustrious run guiding one of the nation’s top aggregate producers.

Since retiring, Zelnak served on the Martin Marietta board of directors for another 10 years. He also bought five small manufacturing companies – four machine shops and a coatings company – in partnership with his eldest son.

Three of those five companies were sold last fall, leaving Zelnak with two companies and a burning desire for a brand-new venture he could immerse himself in.

“All of us are going to die from something, but I’m not going to die from boredom,” Zelnak says. “That’s my philosophy.”

Fortunately for Zelnak, he found his next opportunity when Kristy Dunn, a longtime friend, brought Sykes Supply’s availability to his attention.

New venture

Steve Zelnak, pictured at center in 1987 at Martin Marietta’s Belgrade Quarry in Maysville, North Carolina, is now with Sykes Supply. Photo: Steve Zelnak

In business since 1939, Sykes delivers maintenance, repair and operation supplies to customers in a variety of industries. That Sykes was established, had a long history and represented more than 700 supplier brands was appealing to Zelnak.

“If you were trying to become a distributor for those brands today, you just can’t do it,” says Zelnak, who is now a business partner with Dunn at Sykes. “They have all the distributors they want.”

Zelnak saw tremendous growth potential when evaluating Sykes, which has store locations in Burlington and Asheboro, North Carolina, and a market reach that currently stretches to South Dakota. Zelnak also identified an opportunity to expand Sykes into the industry he spent most of his life in.

“Part of what we’ve focused on is the aggregate industry and what do they use,” Zelnak says.

For Sykes, its entry point to aggregate producers is motors and gearboxes.

“You can take that everywhere there’s any significant manufacturing,” says Zelnak, adding that Sykes represents other product lines that are applicable to aggregate producers. “If they have heavy equipment, they need motors and gearboxes.”

Approach to business

In addition to traditional items, Sykes Supply partners with suppliers to put tech advancements in front of the industry – including the new SKF sealed Type E bearing that is scheduled for launch this summer. Sykes also features Regal’s Perceptiv line, technology that provides instant, web-based notifications for pump failures, power outages, phase loss and rising water to provide predictive warnings and prevent downtime. Photos: SKF (top), Regal Beloit (bottom)

Reaching aggregate producers and effectively serving them will require some adjustments on Sykes’ part, though.

Part of the new plan is to change the approach to customers. For Sykes, this means introducing an e-commerce system.

“This will broaden our opportunities to grow this business rather significantly,” Zelnak says.

Sykes also plans to broaden its product line and establish partnerships with new suppliers.

“When you look at the buying power of the mega distributors we compete with, we have to work pretty hard to convince suppliers to work with us in a somewhat similar fashion,” Zelnak says. “But we also have the ability to keep our costs low.”

According to Zelnak, Sykes has the ability to keep costs low in part because he and Dunn do not take salaries and benefits from the company. Instead, they take cash distributions.

“It’s a different approach,” Zelnak says. “Our overhead would tend to be lower. When you talk about large competitors we have, we don’t have to publish a sustainability report every year. We’re not a public company.”

Zelnak says he and Dunn do not aspire to take Sykes public, but they do have big goals for the company and its employees.

“The [previous owner] was taking salary and benefits,” Zelnak says. “We had him stay with us six months for transition. As he came out, we were able to take that money (his salary) and put it into the salary and commission bucket for others at Sykes Supply. They’re high-caliber people, and we think they ought to get paid well.”

One of the joys Zelnak had at Martin Marietta was seeing colleagues become millionaires through the growth of Martin Marietta’s stock. At Sykes, Zelnak aims to create other opportunities for employees to prosper.

“A lot of our expansion in product lines gives employees more to sell,” Zelnak says. “They’re happy about that.”

Additionally, Sykes hired five new employees since Zelnak and Dunn purchased the company to help put it on the right pathway forward with technology and more.

“We’re retooling to fit the technology age,” Zelnak says. “A lot of the changes we’re making are related to basic technology – computer systems, phone systems. These are the kinds of things you need to do to compete in today’s world.”

Then and now

Steve Zelnak, standing, is pictured at an industry event with fellow Pit & Quarry Hall of Fame members Don James (Vulcan Materials), left, and Rick Feltes (Feltes Sand & Gravel). Photo: Steve Zelnak

While Zelnak says such a transformation is necessary for Sykes, he recognizes that the aggregate industry as a whole underwent significant transformation across a number of years.

“I look at the aggregate industry and its transformation and see an industry that is much more professional in the way it does its business,” says Zelnak, who was enshrined in the Pit & Quarry Hall of Fame in 2016. “It’s much more up to date in terms of utilizing technology. Look at that from a standpoint of the purchasing systems that the big companies use. They’re competitive in their purchasing technology and how they track everything. If you’re going to be a supplier to them, you’re going to have to get on their platform in order to service and invoice them.”

Zelnak says the aggregate industry’s consolidation has been a good development, as well.

“The industry is more profitable now,” he says. “You can afford to pay people better. There’s a different caliber of person. There’s a different education level.”