Small Staff Maintains Esmark Steel Group's Yorkville Plant as Reopening Delayed

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Researched by Industrial Info Resources (Sugar Land, Texas)--Esmark Steel Group (Sewickley, Pennsylvania), which specializes in flat-rolled and special bar quality (SBQ) steel, had planned to restart the former RG Steel plant in Yorkville, Ohio, in January 2013 and hire about 160 workers. But as it stands, the company has yet to hire the majority of those new employees, and only a fire watch crew and a small staff is on site to maintain the electric service for the water treatment plant, as well as other ongoing maintenance. The former RG Steel mill was acquired for $4.7 million in October 2012 as part of RG Steel's bankruptcy and liquidation.

Esmark still plans to invest more than $15 million to purchase necessary materials and supplies to restart the mill, which is expected to be listed under the banner of Ohio Cold Rolling Company LLC. Esmark recently negotiated a new, four-year contract with the United Steelworkers Union, members of which voted 194-24 to accept the contract with high hopes of seeing the plant reopen early this year.

"We remain committed to restarting the Yorkville facility in an orderly process and, hopefully, in a less volatile steel market," Esmark spokesman Bill Keegan said. It remains to be seen when the company will follow through on the restart.

Another development hindering the restart is that Columbia Gas of Ohio shut off service to the mill. Esmark had refused to pay the natural gas bill at the facility.

"We have been working with the local natural gas and electric utility companies, and agreed to temporarily suspend natural gas service to the plant until we're prepared to begin restart operations," Keegan said.

Esmark expects to see the market improve by the end of the year. Keegan said that once the cold-rolling plant reopens, its workforce would be allowed to grow in stages to its original estimate of 160 employees.

Because gas for heating has never been turned off at the plant before, a spokesman for United Steelworkers Local 1223 expressed concern about the plant being reopened this year. The worry is that Esmark Steel Group or Esmark Incorporated, of which Esmark Steel Group is a wholly owned subsidiary, could be experiencing a cash flow problem.

The changes at the RG Steel plant have been very slow in coming, the RG Steel logo has been replaced on some of the signs near the plant entrance. Esmark cites the "fiscal cliff" negotiations in Washington, D.C., in late 2012 as a reason for an initial delay in restarting the Yorkville mill. Overall economic factors and market instability also were touted as reasons for the delay.

Industrial Info has been tracking the restart project since Esmark purchased the steel plant last year.

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