Dowel machining (DM) makes plain and threaded streels rods for use jn construction. They purchase steels rods from steel mills, machine them to precise measurements, and tgen treat them to harden the steel. For threaded rods, larger diameter rods are treaded similarly to make nuts that will attach to the threaded rod.

Dowel Machining prefers to buy from canada steels mills, but there is a limited supply available. They also buy regulat steels rods from U.S mills. for high grade steel rods, DM purchases from Korea. Roughly a third of their business is for high gradr steel products and Korea is the most reliable supplier.

As a commodity, steel is always priced in U.S dollars, even if the source is within Canafa. Consequently, based on production estimate, DM hedges U.S currency on the buy side with Canadian currency on the sell side. DM tries to keep no more than one months worth of raw mayeria on hand and had generally been successful.

In 2021, the construction indus in Canada boomed, leading to record orders for DM's products. However, prices from the mills went up faster than DM could adjust their selling price. At the same tim, supply chain disrupt affected both the U.S and Korean steel purchases. At times, DM ran out of raw materials as well as finished goods on hand. They missed out on several sales and lost some long term book value plus 30% the current owners will then liquidate the company and pay any retsined eranings as liquidation diveded.

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