Latrobe Steelmaker Plans $62M Expansion

By C.M. Mortimer

An expansion announced Tuesday by Latrobe Specialty Steel will allow it to pursue new opportunities in the chemical, oil and gas industries, and shorten delivery cycles for its aerospace customers, officials said.

The company chose to expand in Pennsylvania — instead of scouted industrial sites in Virginia and West Virginia — and will spend $62 million at plants in Latrobe and in Venango County.

The producer of precision-engineered specialty alloys will create at least 107 jobs in both counties.

Latrobe Specialty Steel plans to expand melting capacity at its vacuum remelting facility for high alloy specialty steels by building a 60,000-square-foot manufacturing facility near its Latrobe headquarters, which is expected to add 95 jobs. The company employs about 550 in Latrobe.

“With this tripling of vacuum melting capacity, we can broaden our product range of high-performance alloys. We expect to see the first hot metal in August and commercial production by year end,” said CEO Hans J. Sack.

Sack said the company decided to stay in Pennsylvania because the modern plant requires technical support.

“It’s a high-tech operation, and technical support is needed, both startup and ongoing. That is important,” Sack said. He said the company has invested about $40 million in the plant since 2000.

Latrobe Steel was sold by Canton, Ohio-based Timken Co. in December 2006 for $215 million to The Watermill Group of Lexington, Mass., and family-owned private investment firm Hicks Holdings LLC of Dallas.

“This (expansion) will allow us to expand our role in the defense- related aerospace business. We’ll have shorter lead times, and, hopefully, gain more market share,” Sack said.

Sack said Latrobe Specialty Steel will buy a 30-ton vacuum induction melting furnace from Consarc Corp. of New Jersey. The company will install four vacuum arc remelting furnaces, three of which will be supplied by ALD Vacuum Technologies GmbH of Germany.

The company also plans to expand its finishing operations and service center in Sandy Creek Township, Venango County, to accommodate a new finishing line to serve aerospace customers. The company expects to create 12 new jobs. It now has about 63 at that location.

The company said in May that it wanted to expand, but would look at sites outside Pennsylvania because of high electricity costs. Since then, industrial power users lobbied successfully for legislation that allows electric utilities to offer long-term, fixed- price contracts to the biggest power customers.

“Power costs are not favorable, but we chose to expand our facility here, regardless,” Sack said.

Latrobe Specialty Steel plans to reuse the former Valley Vulcan Mold Co. site in Latrobe, which adjoins the company’s existing melt shop. “We just walked around the block, instead of taking a long walk,” Sack said.

The expansion is funded in part by $1.2 million from the state Department of Community and Economic Development, which includes a $770,000 grant, $275,000 in job training and $156,000 in job creation tax credits.

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