| January 2007 |  |
| Metal Industry News | |
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Arcelor Mittal Acquires Sicartsa is a fully integrated producer of long steel, with an annual production capacity of approximately 2.7 million tons from its facilities in Mexico and Texas. Through its wholly owned mine, linked directly to the plant via a slurry pipeline, Sicartsa has estimated iron ore reserves of 160 million tons, providing 30 years of reserves at current production rates. Arcelor Mittal has also entered into a 50-50 commercial joint venture with Grupo Villacero for the distribution and trading of Arcelor Mittal long products in Mexico and in the southwestern U.S., capitalizing on Villacero’s commercial network. This is Arcelor Mittal’s first acquisition since the merger of the two steel giants created the company last year, and demonstrates the synergies the deal promised, as well as the company’s desire to further consolidate the steel industry, company executives say. Arcelor Mittal expects the Sicartsa acquisition to generate $80 million of industrial synergies in addition to a further $50 million from commercial, procurement and selling, general and administrative areas. Sicartsa is sharing its production site with Mittal Steel Lázaro Cárdenas, offering significant efficiencies once reunited. Prior to the privatization in 1991 that led to its separation into two entities, the Lázaro Cárdenas steelworks operated as a single integrated site producing both flat and long carbon products. Mittal Steel Lázaro Cárdenas is Mexico’s largest steel producer and slab exporter. The plant has a capacity of four million tons per year. “This acquisition creates a strong and well-balanced long carbon player in the Americas. With the Mexican market expected to grow by up to 6 percent per year over the next 10 years, this is the ideal time to expand our presence in this country,” says Aditya Mittal, chief financial officer at Arcelor Mittal. In other action, Arcelor Mittal has signed an understanding with the State of Orissa, India, to pursue the greenfield construction of a steelmaking operation in the Keonijhar District. The intention of the $9 billion project is to build an integrated steel plant with a total annual capacity of 12 million tons. “We have always said that we want to have an operational presence in India,” says Lakshmi Mittal, Arcelor Mittal president and CEO. “The Indian economy is demonstrating excellent growth, and steel consumption is set to increase considerably in the future.” Finally, to meet the recommendations of the European Commission for its approval of the Arcelor and Mittal combination, the company has agreed to sell two of its holdings. Arcelor Mittal agreed to divest Travi e Profilati di Pallanzeno and San Zeno Acciai to Duferco for 117 million euros ($153.2 million U.S.). Travi e Profilati di Pallanzeno, which is a 100 percent subsidiary of Arcelor, is a rolling mill located close to the Lago Maggiore in Northern Italy. The company also agreed to sell German Stahlwerk Thüringen GmbH to Grupo Alfonso Gallardo for 591 million euros ($773.9 million U.S.). SWT, a 100 percent subsidiary of Arcelor Mittal, produces steel sections used in building and construction. Nucor Acquires Harris Steel Group “The acquisition of Harris Steel Group significantly advances Nucor’s downstream growth initiatives,” says Nucor Chairman and CEO Dan DiMicco. “Harris Steel has been a strong partner of ours for almost three years, is a company that we know well, has a management team whom we respect, and will be a highly complementary fit with Nucor. Harris Steel provides Nucor with immediate and broad geographical reach, and with considerable scale and growth opportunities.” Harris Steel has several business units, including: Harris Rebar, which is involved in the fabrication and placing of concrete reinforcing steel and the design and installation of concrete post-tensioning systems; Laurel Steel, which is a manufacturer and distributor of wire and wire products, welded wire mesh and cold finished bar; and Fisher & Ludlow, which is a manufacturer and distributor of heavy industrial steel grating, aluminum grating and expanded metal. Harris Steel also participates in steel trading on a worldwide basis through Novosteel (owned 75 percent by Harris Steel), and in the distribution of reinforcing steel and allied products to U.S. customers through Harris Supply Solutions. Chaparral Reports Another Record Quarter It was the fifth-straight record earnings quarter for the Texas producer of structural steel beams and seventh straight quarter of earnings growth. Shipments of 541,000 tons were seasonably lower than the previous quarter, but were comparable to the same period of fiscal year 2006. Average selling prices of $682 per ton were up 4 percent from the first quarter of the fiscal year and nearly 18 percent better year-over-year. Though the fiscal third quarter is typically the company’s slowest due to inclement weather and holidays, the overall outlook remains positive. “We are constantly monitoring domestic and international markets and both continue to be strong,” says Tommy A. Valenta, president and CEO. “Based on global dynamics, we remain optimistic for the structural steel market and our financial performance in calendar year 2007.” Wheeling-Pitt Shareholders Elect Esmark-Favored Board “The vote went as we expected. After months of discussions with major investors of Wheeling-Pitt and the United Steelworkers, we knew that replacing the incumbent board was widely viewed as a critical component to ending the financial difficulties Wheeling-Pitt has endured since emerging from bankruptcy in 2003,” says Craig Bouchard, president and chief financial officer of Chicago-based Esmark. “We believe that these directors have the knowledge and experience to decide the best path for Wheeling-Pitt—a path that will bolster management depth, transform the balance sheet to mostly equity and add cash and customers very quickly to the commercial base. The overwhelming support shown for the Esmark slate of directors should be viewed as a mandate for Wheeling-Pitt to move forward with Esmark’s business strategy,” Bouchard says. Schmolz+Bickenbach Along with the acquisition, the company will build a new facility. Several sites on the south side of Chicago are being considered. The company expects the acquisition to close in early 2007, with construction of a new integrated steel works commencing shortly thereafter. Timken Sells Latrobe Steel to Investors “Latrobe Specialty Steel was attractive to us based on its excellent position in growing and profitable markets, its outstanding management team and its up-to-date, well-maintained manufacturing and distribution facilities,” says Steven E. Karol, founder and managing partner of The Watermill Group. Latrobe Specialty Steel is one of the world’s leading producers and distributors of specialty steels and alloys. Latrobe Manufacturing, one of the company’s two operating divisions, produces more than 300 grades of specialty steel over a range of product families, including high-speed steel, structural alloys, bearing steel, high-temperature steel, corrosion-resistant steel, and tool and die steels. IPSCO Completes Acquisition of NS Group IPSCO financed the acquisition through a combination of cash on hand and debt obtained under a $1.1 billion syndicated credit facility. IPSCO claims this acquisition makes it the leading North American supplier of tubular products. “With a more diverse portfolio of products, enhanced production capabilities, excellent market positions in both seamless and welded pipe, and a strong commitment to our customers, IPSCO is well positioned to be the provider of choice in the North American energy pipe market,” says David Sutherland, president and CEO of IPSCO. Rusal’s Creditors OK Merger The enlarged business claims to become the new leader in the global aluminum and alumina production industry, with operations in 17 countries on five continents and total production capability of four million tons of aluminum and 11 million tons of alumina. The combined company will command 12.5 percent of the global primary aluminum market and 16 percent of the worldwide alumina volumes, company officials estimate. Also, Rusal announced the launch of the first starter complex of the Khakas aluminum smelter in the Republic of Khakasia, Russia. The capacity of the smelter is 300,000 million tons per year. Titanium Metals Sells Interest in Valtimet Joint Venture Titanium Metals (TIMET) had contributed its wholly owned titanium tubing facility to the Valtimet joint venture in 1997. ValTubes SAS acquired TIMET’s interest in Valtimet SAS for $75 million cash. TIMET and Valtimet also entered into a new long-term agreement pursuant to which TIMET will supply up to 2,500 metric tons of titanium strip annually to Valtimet for use in the manufacture of welded titanium tubing. Aleris Goes Private with Purchase by TPG “We are very pleased to complete this transaction with TPG which has created significant value for shareholders while positioning Aleris with a partner committed to our continued growth as a private company,” says Steve Demetriou, chairman and CEO of Aleris. With the transaction, Aleris’ common stock ceased trading on the New York Stock Exchange. Ulbrich Expands Plant “We are focusing on 13 markets worldwide for these light materials,” says Chris Ulbrich, CEO. “This will be the most up-to-date facility in the world for producing this type of material.”’ The expansion project will cost between $4 million and $5 million. Briefs Schnitzer Steel Industries Inc., Portland, Ore., has finalized the acquisition of the assets of Advanced Recycling, a metals recycler with four processing facilities in New Hampshire. Advanced Recycling handles approximately 250,000 tons of ferrous scrap metal and 25 million pounds of non-ferrous scrap metal annually. Terms of the acquisition were not disclosed. Northwest Pipe Co., Portland, has been named pipe supplier for a water treatment plant in Orange County, Calif. The company will supply approximately 5,000 feet of 24-inch through 120-inch diameter steel pipe valued at $7 million for an engineered and custom fabricated piping system. The pipe is expected to be manufactured in the company’s Adelanto, Calif., division, with delivery scheduled to begin in the third quarter of 2007. Wolverine Tube Inc., Huntsville, Ala., has been delisted by the New York Stock exchange for failing to maintain an average global market capitalization of at least $25 million for 30 consecutive trading days. The delisting went into effect Jan. 3. Wolverine President and CEO Chip Manning expects the company’s equity to continue to be traded by and for shareholders. It is taking steps to facilitate the trading of common stock on the OTC Bulletin Board. Lake Erie Steel, a subsidiary of Stelco Inc., has been awarded ISO/TS 16949:2002 Quality Management System certification for the manufacture of hot-rolled steel coils. ESCO Corp., Portland, Ore., opened a manufacturing facility in the heavy machinery industrial zone of Xuzhou, China. At full capacity, ESCO Xuzhou will produce small metal castings from 20 to 150 pounds. Dofasco Copperweld’s Stainless Tubing Division has announced that its website www.lasertubes.biz has been redesigned and expanded to include new product and technical literature, additional tolerance and size charts, an e-commerce site that will have order-entry capabilities, and new product brochures, including Chinese and Spanish versions. The site also has a new navigation system, which has been streamlined to enable easier access to the most frequently visited sections and information. Alcoa, Pittsburgh, will invest more than $6 million to expand core manufacturing capabilities at its Howmet Products and Services operation in Morristown, Tenn. Construction on the 16,000-square-foot addition to the plant began in December. The addition will be completed by mid-2007 and become fully operational by the end of the year. The company is adding a high-temperature tunnel kiln that will improve kiln capacity by 10 percent. More than 90 percent of United Steelworkers at Alcan’s Alma primary smelter in Quebec have ratified a long-term labor agreement. The new contract runs through the end of 2011. Novelis Inc., Atlanta, announced that its joint venture in Korea, Novelis Korea Ltd., will invest $4.1 million to install Novelis Fusion casting technology in its Ulsan, South Korea, plant. The proprietary Novelis technology allows the commercial production of aluminum ingots with multiple alloy layers. The ingots can then be rolled into sheet products with previously unattainable combinations of product attributes, such as high strength and high formability. The Korean investment continues the global rollout of the breakthrough technology which first entered production in March of this year at the company’s plant in Oswego, New York. People The Werner-von-Siemens-Ring Stiftung in Berlin has awarded Trumpf’s Berthold Leibinger Germany’s most important technology award. The Werner-von-Siemens Ring is awarded every three years to “pioneers in technology.” Keystone Profiles LLC, Beaver Falls, Pa., has appointed Richard T. Mamajek as vice president of sales and marketing. Bernard L. M. Kasriel was elected to the board of directors at Nucor Corp., Charlotte, N.C. Kasriel formerly served as the vice chairman of the board of directors and chief executive officer of Paris-based Lafarge S. A. The Ports of Indiana has named Brian Nutter as director of the Port of Indiana-Jeffersonville. Nutter has served as the executive director for the Maine Port Authority since 1997. Terry Mitchell has resigned as senior vice president at Northwest Pipe Co., Portland, Ore. Mitchell led the company’s tubular products group. Martin Carter has joined Kaiser Aluminum, Foothill Ranch, Calif., as vice president-general manager, common alloy products. Carter will oversee common alloy extrusion and forging operations serving the general engineering, automotive and custom industrial markets. Niles Expanded Metals, Niles, Ohio, has hired Keith Unger as its new network administrator. He will be responsible for all the corporate computer networks. Pittsburgh Logistics Systems Inc. has appointed John Terrill as general manager of the company’s freight solutions business unit. |
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