Esmark to Focus On ‘Core Business’
YORKVILLE – Though the plant still sits quiet, Esmark Inc. officials believe they are getting closer to starting the Ohio Cold Rolling Co. facility formerly owned by RG Steel.
“We hope for a less volatile steel environment. But we’re committed to restarting when the time is right,” said Esmark spokesman Bill Keegan, noting the company has now worked out a few kinks in the contract with United Steelworkers Local 1223.
After blaming several different reasons for being unable to start the plant as soon as initially anticipated – including the “fiscal cliff negotiations” late last year – Esmark officials are unloading the company’s technology division.
Cleveland-based Stahlschmidt Inc. finished a sale and licensing agreement last week to acquire Esmark’s technology division for an undisclosed sum of cash. The venture will continue to operate under the “Esmark Technologies” brand, but Stahlschmidt will own 60 percent of the venture and manage operations.
“Esmark will continue to focus on its core businesses, especially given our recent acquisition of Ohio Cold Rolling Co. and Ohio Coatings Co.,” said Esmark Inc. Chairman and Chief Executive Officer James P. Bouchard.
Citing the growing Marcellus and Utica shale drilling industries, Esmark and Stahlschmidt expect that the Ohio region will continue to be of significant importance. They believe future work could include providing pipe and other materials for the natural gas industry. The company is also considering a tin printing venture, as well as a possible coal transfer/blending station.
“Jim Bouchard has the unique ability to visualize and then implement large and complex transactions. I believe the latest Esmark venture has the potential to create returns equal to or greater to those Jim and his team achieved previously,” said Uwe T. Schmidt, founder, chairman and chief executive officer of Stahlschmidt.
Bouchard said of Schmidt, “He has served as CEO of some of the largest independent international steel trading franchises; developed billion dollar industrial projects, and helped engineer unique supply chain management; and structured finance solutions for the metals, power and related industries.”
Esmark – which acquired the all the Wheeling-Pittsburgh Steel Corp. facilities in 2006 before selling them to OAO Severstal in 2008 – spent about $4.7 million to purchase the Yorkville mill as part of the RG Steel’s bankruptcy and liquidation last year. After Esmark addressed some environmental issues at the site, USW 1223 members voted 194-24 to accept Esmark’s contract offer in hopes of getting back to work early this year.
There has not been much activity at the plant lately.
USW 1223 President Jerry Conners said the average employee wage in the Esmark deal is $21.64 per hour, down from about $26 per hour under the last RG agreement.
Though he said workers were not pleased “to go backwards on their wages,” he noted most realized they would have to make some sacrifices to see that the Ohio Cold Rolling startup is a successful venture.
During the summer, officials with Esmark considered purchasing the downtown Wheeling RG Steel headquarters.
However, Bouchard ultimately decided against making a bid for the downtown structure and the Wheeling Corrugating brand.