| August 2007 |  |
| Metal Industry News | |
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Joint Venture Buys Sparrows Point, Sparrows Point, near Baltimore, is a fully integrated steelmaking facility with a capacity of 3.9 million tons annually. Its products include hot-rolled sheet, cold-rolled sheet, galvanized, Galvalume, tin mill products and semi-finished steel. Its primary markets include construction, service centers, automotive, container and appliance. The sale of the Sparrows Point facility was made necessary by the U.S. Department of Justice as a condition for its approval of the 2006 merger between Arcelor and Mittal. “We have been working closely with the Department of Justice for several months to satisfy the terms of the consent decree and are pleased that this process has reached its conclusion,” says Aditya Mittal, ArcelorMittal’s CFO and head of Flat Carbon Americas. “Sparrows Point has been an important part of ArcelorMittal USA and I know the facility will continue to thrive under new ownership,” says Michael G. Rippey, president and CEO of ArcelorMittal USA. “We expect that this operation will be a strong partner and vital supplier to both Esmark and Wheeling-Pittsburgh,” says James P. Bouchard, who holds the dual and independent positions of chairman and CEO of Esmark and Wheeling-Pitt. The new corporation will be independently operated, led by Craig T. Bouchard as its chairman and CEO. Craig Bouchard will relinquish his responsibilities with Esmark and Wheeling-Pitt, with Tom Modrowski named president of Wheeling-Pittsburgh. “Sparrows Point has state-of-the-art facilities, full ocean access for import and export, and a product offering that produces a full line of sheet construction and tin products for a number of industries,” Craig Bouchard says. “We will commit ourselves to provide low-cost North American slab, tin and flat-rolled products. We will also work to enhance our existing customer relationships and strengthen our excellent working relationship with the United Steelworkers of America.” Nucor to Acquire LMP, LMP is a producer of cold-finished bar and operates related businesses servicing the construction and OEM markets in North America. LMP has approximately 100,000 tons of capacity. Nucor officials say the addition of LMP advances Nucor’s North American market leadership position in cold-finished steel. “The acquisition of LMP is a solid growth opportunity for one of our core downstream businesses,” says Dan DiMicco, Nucor’s chairman, president and CEO. “LMP’s highly complementary product offering and operations will be a good fit with our existing cold-finish business.” SDI Increases Capacity This project includes the installation of a second caster to produce larger quantities of semi-finished steel at the facility. This additional investment complements a previously announced $200 million mill expansion, currently under way, to add a second rolling mill. The new medium-section rolling mill, which will have the capability to roll some of the lighter products currently made on the existing mill as well as other new light structural steel products, will have a rolling capacity of about 1 million tons per year. “Since Steel Dynamics announced the addition of the second rolling mill at Columbia City last year, the markets for structural and rail products have remained strong and our assessment is that this is a market where Steel Dynamics can continue to grow,” says Dick Teets, president of the company’s Steel Shapes and Building Products. “We believe the combination of the customer relationships we have built in the five years since we entered the structural steel business, our central upper-Midwest location, and our low cost-structure will allow us to compete successfully as we expand our capacity to serve the market and introduce new products to the marketplace.” The second caster will provide steel to permit each of the two rolling mills ultimately to operate at a production capacity of approximately 1 million tons per year. The new bloom/billet caster will be installed initially with four strands, expandable to five strands in the future as warranted by market conditions. The new caster will result in the addition of about 50 new jobs at the mill. The project is planned for completion in the fourth quarter of 2008. Gerdau Ameristeel Chaparral is the second largest producer of structural steel products in North America and also a major producer of steel bar products. It operates two minimills, one located in Midlothian and the other in Dinwiddie County, Va. The company has approximately 1,400 employees and an annual capacity of 2.9 million metric tons. “The acquisition of Chaparral Steel Co. is consistent with Gerdau Ameristeel’s strategy to further diversify its product offering into high-value-added steel products. This strategic combination is an excellent fit for us. It broadens our product portfolio and gives us a full range of structural steel products,” says Mario Longhi, Gerdau North America president and CEO. “As a premium steel company, Chaparral brings not only high quality products and assets, but also a strong organization with excellent technical capabilities.” Both companies’ boards unanimously ratified the transaction, though Chaparral’s shareholders must still approve it. “After an extensive review of all options for the company, Chaparral’s board of directors has determined that this transaction creates substantial value for our stockholders,” says Tommy A. Valenta, Chaparral’s president and CEO. “In addition to delivering significant value to our stockholders, Chaparral will be joining one of the largest and most respected steel companies in the world. As part of this new and larger company, we will have a more diversified product offering that will enhance our ability to better serve both existing and new customers.” The merger is expected to close later this year. NYMEX, WSD Introduce NYMEX and WSD will work together to provide marketing and education for these financially settled contracts. The expected contract will be USA hot-rolled band steel futures. The contract size will be 20 short tons with a minimum price fluctuation of $0.50 per short ton and will be listed for 18 consecutive months. “We are very pleased to be the first exchange to offer a steel futures contract to serve the North American market,” says NYMEX Chairman Richard Schaeffer. “NYMEX has worked closely with the steel industry for several years to develop a contract that will meet the needs of producers and consumers and serve as a transparent benchmark for the industry.” The World Steel Dynamics team has been promoting the use of steel futures for several years. “We see a great market for steel futures contracts in the steel industry. Price volatility has increased in the steel market, and futures contracts will enable end-users and producers to lock in prices and margins,” says World Steel Dynamics Managing Partner Peter Marcus. New Process Steel Joins “New Process Steel is a natural partner for SeverCorr, and we’re excited they are joining us in Mississippi,” says Michael Wagner, SeverCorr’s chief financial officer. “Their focus on using only the most technologically advanced systems—both in their processing and their sales and customer service functions—mirrors our own commitment to being the next generation of steelmaking.” The Houston-based NPS has service centers throughout the U.S. and Mexico. The facility being constructed at the SeverCorr site will provide downstream processing for light-gauge pickled, cold-rolled and galvanized products, 0.130-inch and lighter. The facility will have slitting and blanking equipment with 72-inch-wide capacity. For NPS, the ability to add wide products to its product mix is one of the primary reasons to locate on a portion of the 1,400 acre mega-site that SeverCorr has set aside for business partners. “An alliance with SeverCorr is an opportunity we just couldn’t pass up,” says Bob Proch, chief operating officer of NPS. “We strongly believe the market will continue to grow in the South and Mexico, and we look forward to working closely with SeverCorr to expand our collective business.” Tulloch Replaces Retiring Tulloch has been with IPSCO since 1977, serving in both the steel and pipe businesses. He will be responsible for managing existing IPSCO businesses, serve as the executive vice president of the IPSCO division of SSAB and as a member of SSAB’s group management. Other senior management appointments following the acquisition include: Vicki Abril as senior vice president-tubular; David Britten, senior vice president-steel; Steve Hansen, vice president and chief technical officer; Michelle Klebuc-Simes, vice president, general counsel and corporate secretary; Greg Maindonald, vice president, operations services; Phil Marusarz, vice president and chief financial officer; Ray Rarey, vice president and chief human resources officer; and Tim Wensits, vice president and chief information officer. “I am excited about the depth of knowledge and continuing experience this management team brings to IPSCO within the SSAB organization and am very enthusiastic about the future of the business,” Tulloch says. “IPSCO has had a long and very successful 51-year record of innovation, growth and change, and we expect that to continue as a division of SSAB.” Besides Sutherland, Senior Vice President Joseph Russo and Corporate Counsel Leslie Lederer also have retired. Peter MacPhail, vice president of primary operations and president of IPSCO Saskatchewan, will retire soon. Northwest Pipe Purchases Continental Pipe produces spiral welded steel pressure pipe for use in water transmission pipelines. Founded in 1940, it has primarily marketed its product in Utah and surrounding mountain states. “The Continental acquisition is a great fit for our Water Transmission business,” says Brian W. Dunham, Northwest Pipe’s CEO. “It continues our strategy of geographic expansion by acquisition and adds manufacturing capacity to an area that we expect will see significant growth in the years ahead.” Northwest Pipe also announced that Jeff Bruny, formerly the operations manager of its Adelanto, Calif., division, has been named to the new position of regional vice president for water transmission operations. In this new position, Bruny will be responsible for the Adelanto and Portland divisions, as well as the Continental operations. CMC’s Swiss Subsidiary The facility has a pipe-making capacity of about 305,000 tons annually. Commercial Metals International AG will pay $41 million for the facility, then invest an almost equal amount in capital expenditures. “Sisak will be our base for growth in the robust and key markets of Central and Eastern Europe. We know that this is a turnaround opportunity and are ready to invest to bring this mill to a high level of profitability,” says Hanns Zoeller, president of CMC’s marketing and distribution segment. PEOPLE Carpenter Technology Corp., Wyomissing, Pa., has appointed two men to senior vice president positions. Mark S. Kamon has been appointed to advanced metals operations, in charge of bar, strip and wire finishing operations. Michael L. Shor will head the premium alloys operations, responsible for the Reading, Pa.-based manufacturing operations. Dan Zimmerman has been promoted to the new position of manager, sales/service support, at Eriez, Erie, Pa. He will maintain his responsibilities as market manager-metalworking. Jeremy Nolan has joined Morse Industries, Kent, Wash., as a member of the company’s sales team. Northwest Pipe Co., Portland, Ore., has announced four management promotions. Winsor Jenkins was named vice president of human resources; Gary Stone was named vice president of quality assurance; Greg Carrier was named vice president of purchasing; and Robert L. Mahoney was named senior vice president in charge of tubular products. Pittsburgh Logistics Systems Inc., Rochester, Pa., has appointed Rick Kozak as vice president of global sales. Kozak will be responsible for strategic sales development and product marketing. BRIEFS Aleris International Inc., Beachwood, Ohio, has agreed to acquire Wabash Alloys from Connell Limited Partnership for $194 million. Wabash Alloys produces aluminum casting alloys and molten metals at facilities in the United States, Canada and Mexico. American Spring Wire Corp., Bedford Heights, Ohio, has acquired J&L Wire Cloth Co. of America, a manufacturer of galvanized and bright basic wire based in St. Paul, Minn. ArcelorMittal, Luxembourg, has agreed to acquire 25 percent shares of ArcelorMittal Poland from the Polish State and Treasury Ministry. The shares are valued at $157 million. The Bradbury Co. Inc., Moundridge, Kansas, a manufacturer of coil processing, rollforming, and automated production equipment, has won the Governor’s Exporter of the Year Award for 2007 from the Kansas Department of Commerce and the Kansas International Trade Coordinating Council. ESCO Corp., Portland, Ore. and Elecmetal, S.A., have signed a joint venture agreement for a ground engaging tool foundry to be constructed in Chile. ESCO and Elecmetal have a nearly 50-year licensee relationship. |
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