Carpenter Selling Distribution Business > Metal Center News

Carpenter Selling Distribution Business

Sept. 5, 2012

Carpenter Selling Distribution Business

Carpenter Technology Corp., Wyomissing, Pa., will pare down its distribution holdings with the sale of its Latrobe Specialty Steel Distribution subsidiary and its Mexican network, Aceros Fortuna. Carpenter, which also operates South Carolina’s Talley Metals, is a major producer and distributor of specialty metals. The sale of the distribution businesses reflects Carpenter’s continued focus on growing its high-value specialty alloy manufacturing, titanium processing and precision engineered businesses, officials say.

“LSSD and Aceros Fortuna are well managed, strong, profitable businesses with good employees and solid growth prospects; however, distribution of tool and alloy steel products is not part of our core focus of manufacturing and selling specialty materials for the aerospace, energy and other high-growth markets,” says William A. Wulfsohn, president and CEO of Carpenter Technology.

Carpenter expects proceeds from a sale to be reinvested in the company’s premium product businesses. Carpenter will continue to service sales of its special alloy products in Mexico and South America through the retention of selected warehouses and employees.

Carpenter acquired LSSD as part of its 2012 acquisition of Latrobe Specialty Steel. LSSD provides a broad range of quality steels and value-added services to customers in North America from six distribution centers across the U.S. and Canada. LSSD recorded sales of $113 million in the 2012 fiscal year.

Aceros Fortuna distributes alloyed, stainless and tool steels, specialty alloys and industrial products in Mexico and Brazil and generated sales of $42 million in the 2012 fiscal year. The company has eight distribution and sales offices across Mexico. Carpenter acquired the 40-year-old company in 1994. About 25 of Aceros Fortuna’s 275 employees support the specialty alloy market and will remain with Carpenter.

In other news, Carpenter has decided to consolidate its specialty wire production in Wauseon, Ohio. It will relocate its Carpenter Specialty Wire Products business from its facility in Orangeburg, S.C., to Wauseon, which it acquired as part of its acquisition of Latrobe Specialty Metals earlier in 2012. The consolidation is expected to reduce operating costs.

The Wauseon plant, which is used to manufacture precision stainless steel wire and other highly engineered steel wires, recently underwent a $3 million expansion highlighted by the addition of technologically advanced hydrogen atmosphere furnaces. The transition will take place over the next 12 to 15 months, at which time the Orangeburg facility will be closed.