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Small Industries Achieve Stability While Still Hoping for Growth

February 21, 2011
By IAN HICKS

WHEELING - Steelmaking heavyweights like Severstal and ArcelorMittal find themselves in the headlines on a regular basis, and in recent years the news hasn't often been good.

But there are many smaller industrial operations up and down the Ohio Valley that rely heavily on the steel industry but typically fly under the radar - and hundreds of area families that depend on those plants for their livelihoods.

These companies have continued to perform rather well despite the nation's economic downturn and are poised for a strong future.

Article Photos

File photo by Ian Hicks
Tim Myers, plant manager at AZZ Galvanizing Inc's Benwood hot-dip facility, leads a tour during a July 2009 open house.

Leaders at some of those companies are breathing a bit easier as today's operations resemble the pre-recession status quo. Though significant gains have been made, they remain guarded in their optimism for the future.

After laying off 90 people - more than half its work force - in January 2009, Follansbee's Wheeling-Nisshin Inc. spent last year in a recovery period. The plant, a hot-dip steel galvanizing facility, closed 2010 with a full complement of 175 employees.

Company spokesman Nick Cortese said employment levels fluctuated during the early part of the year, but the plant today is enjoying a measure of stability.

Fact Box

The heavy steel industry has its problems, but do those issues filter down to smaller, niche companies such as Wheeling Nisshin, Koppers or AZZ Galvanizing?

Yes and no. Many of the smaller, specialty steel and manufacturing plants are suffering from the economic downturn, but those plants also don't have the legacy costs and expenses a company such as Severstal Wheeling incurs. Wheeling Nisshin, for example, laid off 90 workers in January 2009, but ended 2010 with a full complement of workers, with 175 on staff.

"In 2009 was the first time that we ever laid anyone off in our company's history. That was a pretty significant down year," said Cortese. "I think that the market situation is still inconsistent, but we're still cautiously optimistic."

Cortese said the coated steel products made at Wheeling-Nisshin primarily serve the construction, appliance and automotive industries.

"As those specific areas improve with their operating levels, we should be able to realize a similar type of improvement in our operating levels," he said.

Last month, a federal judge in Delaware ruled against ArcelorMittal in a patent lawsuit it brought against Severstal. The decision in the case could be a boost for Wheeling-Nisshin, a co-defendant of Severstal's in the lawsuit, which involved aluminum coated, boron bearing carbon steel.

Cortese did not specifically comment on the lawsuit but referred to a statement the company issued following the decision.

"Wheeling-Nisshin serves as a toll-coater of the product for Severstal North America. The favorable verdict will allow both companies to pursue this business, which is predominantly in high-strength automotive applications," the statement reads.

In June, Cortese said, the U.S. Department of Labor and the Occupational Health and Safety Administration recognized Wheeling-Nisshin with a SHARP award, which stands for Safety and Health Achievement Recognition Program.

About 1,200 tons of material used in building Pittsburgh's new hockey palace, the Consol Energy Center, was coated at Wheeling-Nisshin. The arena opened in August and is the new home of the Pittsburgh Penguins as well as various concert events.

Last year actually saw a modest increase in employment at Pittsburgh-based Koppers Inc.'s Follansbee plant. That facility employs 78 today, up from 74 slightly more than a year ago.

Company spokesman Michael Snyder attributed the increase to "improved business conditions allowing us to fill positions that previously were left unfilled."

He said another open position will soon be filled, and didn't rule out hiring additional personnel if the market continues to trend upward.

"Overall, we believe market conditions have improved moderately from where they were a year ago," Snyder said.

Koppers refines crude coke oven tar into various marketable products.

According to Snyder, the company primarily makes carbon pitch for the aluminum and steel industries, as well as creosote for the commercial wood treating industry.

One possible factor in the plant's recent success is the rebound of its neighbor, Severstal's Mountain State Carbon coke plant, which has returned to full production after a period of significant uncertainty and layoffs.

"We rely on Mountain State Carbon for a substantial portion of our feed stock for the Follansbee plant, so changes in operating conditions at Mountain State can have an impact on our level of production at Follansbee," said Snyder.

In April 2009, local and state officials celebrated a bit of good news when North American Galvanizing and Coating opened a new hot-dip steel galvanizing facility in Benwood, with a work force of 16 and operating a single shift per day. A year later, AZZ Galvanizing Services of Fort Worth, Texas, purchased North American Galvanizing for $125.6 million and now controls the Benwood plant.

When the facility opened, company leaders predicted employment would nearly double in the future as increasing production would require additional shifts; however, that growth has yet to be realized. In fact, only 14 are working at the plant today, according to plant manager Tim Myers.

Myers said the economy and winter weather have contributed to a decline in construction projects, which has hurt the market for the coated steel produced in Benwood.

 
 
 

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