Business & Tech

RG Steel Completes Purchase of Sparrows Point

Following its acquisition of plants here, in Warren, OH and in Wheeling, WV, RG Steel has 7.5 million tons of annualized capacity, making it the fourth-largest flat-rolled steel company in the United States.

RG Steel, LLC, an affiliate of The Renco Group, Inc., announced early Thursday evening that it has completed the stock purchase of the steel plants at Sparrows Point, as well as plants in Warren, OH, and Wheeling, WV, from Severstal US Holdings, LLC.

As a result of the purchase, RG Steel has 7.5 million tons of annualized capacity, according to a press release, making it the fourth-largest flat-rolled steel company in the United States.

RG Steel’s recent purchases also include finishing facilities in Yorkville and Martins Ferry, OH, and the Wheeling Corrugating Company in Wheeling, WV.  In addition, RG Steel now owns 50 percent of both Mountain State Carbon LLC, a coke-making facility in Follansbee, WV, and Ohio Coatings Company in Yorkville, OH.

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Bette Kovach, a Sparrows Point spokeswoman, said that workers returning to the plant over the last two weeks continue to go through safety and production refresher training, and that the plant is on schedule to restart basic steelmaking operations in May.

“Our plan for RG Steel is to become the leader in the manufacture and supply of flat-rolled steel and to provide exceptional customer service,” said John Goodwin, president and CEO of RG Steel, in a press statement. “We have the facilities, we have the capital, we have the talent and we have the will to succeed. Our plants and our products are well known in our markets, and we will capitalize on our strengths to become the leading producer of flat-rolled steel in the United States.”

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The transaction, estimated at $1.2 billion, was tentatively agreed to March 2. Severstal spent $2.2 billion to purchase the mills, buying Sparrows Point in March 2008 for $810 million.

As part of the March 2 initial purchase agreement, Renco also announced that RG Steel executed a new, tentative collective bargaining agreement with The United Steelworkers (USW), headquartered in Pittsburgh, subject to ratification by its members.

The newly formed RG Steel also plans to use the Sparrows Point facility as the headquarters of its operation. It has not yet been determined how many RG Steel employees may ultimately be employed at the headquarters, Kovach said.

Local union members have not yet voted on the tentative agreement.

Kovach would not comment on issues related to the union agreement.

A major issue, in terms of profitability for the Sparrows Point plant, remains the acquisition of competitively priced, quality raw materials for the plant. Kovach said Sparrows Point, because of its location next to a deepwater port, traditionally has imported its raw materials, which likely will continue.

For further information on RG Steel, please visit its website at www.rg-steel.com.


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