Oct 12 2012
Esmark, Inc. and its wholly owned steel services subsidiary, Esmark Steel Group, today announced that the company has closed into escrow on the transaction for RG Steel LLC’s Yorkville, Ohio cold-rolled finishing mill and RG Steel’s 50 percent interest in Ohio Coatings Company’s tin plate production facility.
Esmark expects the two acquisitions to accomplish its goal of achieving and returning the company to $1 billion in revenue in 2013, enhance shareholder value and complement its leadership position in the U.S. cold-rolled marketplace.
In making the announcement, Esmark founder, Chairman and Chief Executive Officer James P. Bouchard said that the company plans to invest more than $15 million in working capital for steel purchases and supplies to restart the Yorkville facility in January 2013, and will rename the company Ohio Cold Rolling Company. The newly named facility will be majority owned and operated by Esmark Steel Group. Ohio Coatings Company will become a 50-50 joint venture between Esmark and South Korea’s TCC Steel.
“The imminent closing of this transaction is very welcome news to the Ohio Valley and we’re extremely pleased to be able to revive one of Wheeling Pittsburgh Steel Corporation’s iconic facilities and bring back sorely needed jobs,” said Esmark Chairman and CEO James P. Bouchard. “We believe we have a unique opportunity to operate Yorkville and Ohio Coatings Company as truly independent facilities not tethered to a steel producer, which will allow the two companies to operate more efficiently and better execute their strategies moving forward.”
Bouchard recognized the significant collaboration between Esmark Steel Group, TCC Steel, the United Steelworkers of America and the State of Ohio in reaching agreement to successfully close the transaction. “Our longstanding partnerships and strong working relationships with TCC’s leadership, the USW, and the current managers and personnel associated with the Yorkville and OCC assets are key factors in closing this transaction,” he said. “Together with a new Yorkville labor contract and new supply agreements and energy contracts, we will be well-positioned to capitalize on the market as the economy improves.”
Bouchard thanked Ohio Governor John R. Kasich, U.S. Senator Sherrod Brown and JobsOhio for their ongoing counsel and assistance to Esmark during the acquisition process. “These deals would not have been possible without the commitment and full support of Governor Kasich, U.S. Senator Sherrod Brown, the U.S. and Ohio EPA and JobsOhio. “With our planned $15 million capital investment in Yorkville and current investments in our other businesses across Ohio totaling more than $65 million, we’re committed to building a better future for our company, our 350 Ohio employees and the communities where we operate,” said Bouchard. “We’re grateful to everyone in Ohio for their hard work and commitment to job creation in the state.”
“This is a win-win-win deal,” said Mark D. Kvamme, President and Interim Chief Investment Officer for JobsOhio. “Esmark has found a great location where a new segment of their business can thrive, jobs are being created for the community, and the site will be remediated to EPA standards through Ohio’s Voluntary Action Program.”
Esmark Steel Group Chief Executive Officer Tom Modrowski, who led the company’s efforts to acquire the RG Steel assets said, “We’ve been working closely with the U.S. EPA, the Ohio EPA and local government authorities to develop a remediation plan for Yorkville that addresses certain environmental issues. We especially want to thank Ohio EPA Director Scott J. Nally and his team for their extraordinary efforts in helping us achieve this objective.”
Esmark and the USW Achieve Collective Bargaining Agreement for Yorkville Workers
Additionally, Modrowski said Esmark has agreed to terms for a new collective bargaining agreement at Yorkville with the United Steelworkers of America. “We want to thank USW District 1 Director Dave McCall and his team for their collaboration in reaching this contract agreement,” noted Modrowski. “Our expectation is to initially recall approximately 160 union workers as the Yorkville restart operations begin in January 2013, with the hope of adding more workers as our monthly volume increases. We’re looking forward to rolling our first steel coils at Yorkville and supplying Ohio Coatings and our other customers with quality products.”
Leadership Named for Yorkville and Ohio Cold Rolling Company
Esmark also announced that James Ledgard, former Chief Operating Officer of Wheeling Pittsburgh Steel Corporation and one of the industry’s leading experts in cold-rolled steel operations, has been named Chief Executive Officer of the newly-named Ohio Cold Rolling Company. In addition, Esmark said that James Tennant, current Chief Executive Officer of Ohio Coatings Company, will remain in that capacity with the company. “We’ve had excellent working relationships with both Jim Ledgard and Jim Tennant going back to when Esmark owned Wheeling Pittsburgh Steel Corporation, and we’re confident they will be dynamic and effective leaders for our companies as we execute our business plans,” said Modrowski.
Source: http://www.esmark.com