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Severstal says there are no plans to sell its U.S. plants
Photo
In this photo taken on Wednesday, March 4, 2009, the Severstal International steel company lies idle Warren, Ohio. With the auto plants and steel mills, once the lifeblood of this northeast Ohio town, now ghosts of their former selves, Warren's population has dwindled to about 43,000 and those left are being tested like never before. Now folks talk of a hopelessness, a weariness of spirit that is pervading every aspect of life.
STAFF/WIRE REPORT
MOSCOW — Russia’s largest steelmaker said Friday it had no immediate plans to sell any of its loss-making U.S. assets and would seek to turn them into profitable ventures.
Severstal has been hit hard by weak world steel prices, falling output and big exchange-rate losses amid the industry’s global slump. First-quarter results last week revealed the company’s Russian operations were turning some profit, while North American and Europe were dragging on the company’s overall balance sheet.
That has intensified speculation that the company may decide to sell some of its North American plants. Two of its five major plants in the United States have been idled — in Warren, Ohio, and Wheeling, W.Va. — a process that takes several months.
Its other U.S. plants are in Dearborn, Mich.; Sparrows Point, Md.; and Columbus, Miss.
Gregory Mason, chief executive of Severstal’s international operations, refuted those reports.
“We are not actively marketing any of our assets,” he told The Associated Press.
He also said Russian assets are weathering the crisis better because they have more effective crisis-management and cost-cutting programs.
“We’re just incorporating underperforming facilities and taking opportunity to restructure the company much earlier than we would have under different circumstances,” he said.
Mason said he has noticed some signs of recovery, but they are still insignificant.
“We have very low visibility across the globe for both volumes and demand,” he told AP.
Severstal’s chief Alexey Mordashov said last week the company would not give guidance for the next quarter because of uncertainty over market conditions.
In 2004, Severstal became the first Russian company to acquire steel assets in the United States. Subsequent acquisitions in North America made the company the No. 4 U.S. steelmaker by capacity.
Locally, Severstal Warren has more than 1,000 hourly and salaried workers on layoff. The mill’s blast furnace was shut down for maintenance last October and never restarted because of low orders. The rest of the mill was shut down in the next few months, but Severstal officials said they intend to restart the mill when orders pick up.
Severstal bought the mill last year from a group of bondholders who acquired the mill after WCI Steel was forced into bankruptcy.