Duferco hopes to benefit from state programs

By Joe Pinchot
Herald Staff Writer

Duferco Farrell Corp. is simply following through on its original intention by exercising an option to buy property on which it is operating its steel-making operation in Farrell, said Marcel Martin, vice president of finance.

In December 1998, Duferco agreed to buy the steel-production equipment and other machinery from Caparo Steel Corp., but there was not enough time to complete an environmental review of the plant, he said. So instead of buying the land, Duferco agreed to lease it from Caparo. The environmental review has been completed and nothing that will require any remediation was found, he said.

The biggest benefit the company will get from the purchase is eligibility for state programs such as infrastructure support and building remediation, Martin said.

“Because we’re not the owners we can’t take advantage of some of the programs the state offers,” he said.

The sale price will be $1 for the transfer, although the money Duferco has been paying to lease the property will account for the actual sale price, Martin said. He would not disclose how much Duferco has paid.

Duferco turned its first profit in August, Martin said. Farrell had several factors going for it that attracted Duferco, a Swiss-based firm, Martin said, most notably the existing mill. The area also has an “excellent, motivated” workforce, and a close customer base that historically had located here because of Sharon Steel, one of Duferco’s predecessors at the site.

Duferco, which employs about 530, has been able to “reinitiate” relationships with Sharon Steel customers such as the local tube mills and steel service centers, and expand its customer base. The company has pumped $50 million into the mill and is examining options for future upgrades, but nothing has been settled, he said.

The purchase agreement includes about 100 acres of land with 1.5 million square feet under roof, he said. Not all of the parcels Duferco wants to buy are connected, and the companies have reached easement agreements allowing the other to cross over its land, he said.

Although documents filed with the city mention the sale of some property to Haywood Industries, which is leasing space at the mill, no agreement has been reached, Martin said.

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