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Ormet Announces $1.1 Million Quarterly Loss

June 8, 2012
By CASEY JUNKINS Staff Writer , The Intelligencer / Wheeling News-Register

HANNIBAL - Ormet Corp. posted a $1.1 million net loss for the first three months of 2012, but company officials spent $1.9 million during this time to reline 22 pots at the Primary Aluminum Reduction Plant.

As Ormet gears up for the future, the company continues dealing with costs related to the restart of Ormet's Burnside, La., alumina facility, though President and Chief Executive Officer Mike Tanchuk said operations there are coming into place.

"Our Burnside, La., alumina refinery operation continues to increase production and is nearing capacity. I want to recognize and thank our employees at the refinery for their hard work and dedication in making the start-up a reality," said Tanchuk.

Article Photos

Photo by Shelley Hanson
A flat-bed truck traveling north on Ohio 7 near Bellaire hauls aluminum ingots made at Ormet.

With eyes focused on the future, Tanchuk and other Ormet leaders are now looking at the possibility of making joint investments with Trafigura, one of the world's leading commodity traders, specializing in the oil, minerals and metals markets, with 81 offices in 54 countries.

"To be successful, Ormet must grow smartly while we continue to focus on our current operations. Trafigura is a great partner for us to accomplish our goals," Tanchuk said. "Clearly, the strengths of our two companies complement each other."

According to company information, Trafigura's primary trading businesses are the supply and transport of crude oil, petroleum products, renewable energies, coal, refined metals, ores and concentrates. It is also the world's the third largest independent oil trader.

Trafigura and Ormet entered into an agreement to explore and evaluate joint investments in projects in the bauxite, alumina and aluminum industry. Trafigura hopes its global experience in mining, commodities and logistics will complement Ormet's aluminum production expertise. The companies are already working together at the Burnside facility, as Trafigura provides off and on loading services for Ormet's alumina refinery.

"We've agreed this venture at a crucial time for the global aluminum industry. Although this sector continues to grow, some of its major players are divesting non-core assets," said Trafigura director Simon Collins. "The combination of Trafigura's world-wide reach and Ormet's industry expertise will identify key investment opportunities and demonstrates our joint commitment to meeting market needs."

As Ormet and Trafigura prepare for their partnership, work continues for about 1,000 employees at Ormet's Hannibal facility. In the first three months of the year, workers shipped 67,981 metric tons of product, compared to 58,079 tons during the same time in 2011. The increase is partially due to restarting two potlines that were closed during the first three months of 2011.

Last year, Ormet officials inked a new five-year contract with the United Steelworkers union at the Hannibal plant. Production numbers and earnings indicate Ormet's resurgence as an aluminum producer is continuing, which is notable after the company nearly closed a few years ago due to labor strife.

In 2004, Ormet had filed for bankruptcy protection, but it emerged from bankruptcy in 2005 in the midst of an 18-month walkout by union employees from the Hannibal plant. The company closed and sold its former rolling mill to the south of the reduction plant shortly thereafter.

 
 

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