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Koppers trying to sell Monessen coke plant
Tuesday, June 15, 1999 By Len Boselovic, Post-Gazette Staff Writer
Koppers Industries is trying to find a buyer for its 4-year-old Monessen coke plant, which employs about 200 workers.
The Pittsburgh company has hired Seneca Financial Group, a Greenwich, Conn.-based merchant bank, to search for buyers.
Koppers disclosed in a recent government filing that it was considering the sale so it could get cash for the fuel tax credits generated by the Monessen plant. Koppers said it received $25.8 million in tax credits from the plant over the last three years and could get as much as $10.4 million annually until the credits expire at the end of 2002.
"The company is currently pursuing alternatives, including the sale of the Monessen facility, to monetize some or all of these tax credits," Koppers said in the filing.
Vice President Randall D. Collins said no decision has been made to sell the plant. and emphasized the company was pleased with its performance.
"We still believe it's one of the best operating facilities in the country," Collins said.
U.S. Steel and other coke producers have fashioned similar deals to cash in on the credits. The tax breaks date back to the energy crisis of the 1970s, when the federal government was promoting unconventional fuels. Koppers said the credit is worth about $26 for each ton of coke it produces.
A sale would complete Koppers' withdrawal from the business of making coke, a coal-based fuel used in steel plants and foundries. Making coke is the dirtiest part of steelmaking and increasing environmental regulation has led to the shutdown of LTV's Hazelwood plant and many other domestic coke operations.
Koppers bought the Monessen plant from bankrupt Sharon Steel and spent more than $13 million to update its equipment and environmental controls. It can produce 350,000 tons of coke annually. The company shut down its 450,000-ton coke operation in Woodward, Ala., last year, saying it was unwilling to spend millions of dollars to bring the plant into compliance with environmental regulations.
Collins said the Monessen plant accounts for about 8 percent of Koppers' revenues, which totaled $670.6 million in 1998.
The Monessen plant is one of three remaining Western Pennsylvania coke plants. U.S. Steel's Clairton plant can produce 4 million tons annually. Shenango's Neville Island plant produces 360,000 tons and it wants to add another 500,000 tons of capacity through a merger with Anteaus Energy Corp.
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