Esmark plans to restart former Wheeling-Pittsburgh Steel plant
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The former operator of Wheeling-Pittsburgh Steel has acquired the defunct steelmaker's Yorkville, Ohio, plant and a 50 percent stake in a joint venture for $6.3 million.
Sewickley-based Esmark said it plans to restart the Yorkville plant in January and hire about 160 workers who will be covered by a four-year contract negotiated with the United Steelworkers union.
The acquisition was completed Thursday.
Yorkville and the 50-percent interest in Ohio Coatings Company were among the assets put on the auction block following the May bankruptcy of RG Steel, the nation's fourth-largest steel producer. RG was formed in March 2011 by combining Wheeling-Pitt's former operations, Bethlehem Steel's former Sparrows Point plant in Baltimore, and the former WCI Steel plant in Warren, Ohio.
The bankruptcy idled all of the plants. Many of them are excepted to be scrapped given the depressed state of the steel industry. U.S. mills are operating at only 71 percent of capacity.
"We're going to be starting up again in a tight market," Esmark chairman and chief executive officer James P. Bouchard said. "It's just going to take time. We don't want to buy market share."
Esmark owns steel service centers in the Northeast and Midwest that process steel for steel producers and their customers.
It took control of Wheeling-Pitt after a 2006 proxy fight. It sold the operations to Russian steel producer OAO Severstal in 2008 for $1.25 billion, which included the assumption of debt.
Severstal sold the mills to RG 2011.
The Yorkville plant produces light gauge steel used in the container and packaging markets. Much of its steel will be shipped to Ohio Coatings Company, also located in Yorkville.
South Korea's TCC Steel owns the other half of the steel processing venture.
Mr. Bouchard said Esmark will invest $15 million to purchase steel sheet and other supplies necessary to restart the mill.
First Published October 12, 2012 9:55 am