Mittal Steel Must Sell Plant Near Baltimore; Region-Based Esmark Wants to Buy
By Andrea Holecek, The Times, Munster, Ind.
Mar. 22–CHICAGO — Esmark Inc., owner of East Chicago’s ECT and Chicago Heights-based Sun Steel and Century Steel, wants to be able to supply its 2,000-plus customers with more than services like cutting and slitting.
The service center and distributor is in discussions with Mittal Steel Co. to purchase its Sparrows Point integrated mill. The U.S. Department of Justice is forcing Mittal to sell the mill to prevent its monopoly in the tin plate business.
The plant near Baltimore must be sold by May 21 — unless a 60-day extension is approved — or a sale will be arranged by an appointed trustee. Without a sale, Mittal N.V.’s $33 billion purchase of Arcelor can’t proceed.
No one from Mittal could be reached for comment.
The acquisition of Sparrows Point would enable Esmark to provide its customers with an additional 3.5 million tons of steelmaking capacity. The plant, which has the one of the largest and most efficient blast furnace in North America, produces steel slabs and galvanized sheet for appliance manufacturers and the construction industry.
The announcement of Esmark’s interest in the plant comes just days after Esmark’s board and the board of Wheeling-Pittsburgh Corp. approved an agreement merging the two companies.
The merger remains subject to shareholder approval, which is anticipated in June or July, said Bill Keegan, Esmark’s spokesman. Keegan confirmed Esmark’s interest in Sparrows Point, but declined to discuss any details other than to say Esmark has not submitted a formal bid for the plant.
Founded in 2004 by brothers James and Craig Bouchard, Esmark currently operates 11 steel service centers in an area from Missouri to the Ohio Valley. The company soon will be renamed the “New Esmark,” Keegan said.
“It’s come a long way in a short time,” he said. “And there’s more to come.”
Esmark’s purchase of the Wheeling, W.Va., mill will expand its role in the steel industry from a privately owned service center/distributor to a publicly owned steel producer/service center/distributor.
Wheeling-Pitt has one blast furnace and a continuous electric arc furnace at its Mingo Junction, Ohio, mill. It also has plants in West Virginia and Pennsylvania, and a coke plant in West Virginia it operates as a joint venture with Severstal of Russia.
The company makes rolled, galvanized and pre-painted steel sheet products, plus steel for construction. It has 3,100 employees, with the majority of its hourly workers represented by the United Steelworkers.
The acquisition of Sparrows Point, once part of bankrupt Bethlehem Steel Corp.’s operations, would add about 2,000 steelworkers to Esmark’s work force.
The company currently is headquartered at its Sun Steel plant in Chicago Heights, but is considering moving to a new location.
“It’s looking at Pittsburgh or West Virginia or Chicago for its headquarters,” Keegan said. “Jim (Esmark’s chairman and CEO) and Craig (its president) move around a lot. Wherever they hang their hats tends to be the headquarters.”
United Steelworkers Local 9477 at Sparrows Point generally supports Esmark’s purchase.
“We have a successorship agreement, so we have a say on who the buyer is,” said Dave Polanowski, secretary of grievance committee for the local. “As long as both sides are being reasonable there shouldn’t be a problem. I met with John Goodwin (CEO of Wheeling-Pitt) and it was like a breath of fresh air. He’s willing to help the workers.”
Polanowski said the union only questions whether Esmark has the capital needed to upgrade the plant.
“We want someone who can fix up the things that will help us grow,” he said. “We want to be some company’s jewel.”
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