`Caparo Steel sale is final`

By Michael Roknick
Herald Business Editor

It’s a deal. Duferco will be operating the Caparo Steel Co. plant in Farrell.

The Swiss-based company bought the steel-production equipment and other machinery at the mill. Also included in the deal completed Thursday was Duferco’s leasing of the buildings along Broadway Avenue from Caparo.

The operation has been renamed Duferco Farrell Corp. Duferco has said it wants to continue Caparo’s steelmaking operations and plans to open the hot mill. A hot mill rolls slabs into steel coils.

The company told Farrell city officials it has the ability to buy and bring in slabs for the hot mill. Duferco also has said it would like to increase the plant’s employment to as high as 300. Caparo had employed about 100. United Steelworkers of America Local 1197 has a contract with Duferco that expires in 2004.

Duferco representatives did not immediately return a phone call this morning. Caparo tried for nearly a year to sell the plant. Buying the plant with great fanfare in 1994 out of Sharon Steel Corp.’s bankruptcy, Caparo had high hopes for the mill. Sharon Steel filed for Chapter 11 bankruptcy in 1992 and closed the mill the same year. At the time the plant employed 2,700.

When Caparo bought the plant, it streamlined the operations and initially employed about 300. While the company wanted to add a continuous caster, Caparo said it couldn’t secure acceptable financing. A caster produces more steel with greater efficiency than traditional methods. Over the years losses at the plant continued to mount and Caparo curtailed operations.

Caparo is owned by Caparo Group which is headquartered in England and is headed by Swraj Paul. Duferco’s deal with Caparo comes at a time when American steel companies are being hard hit by steel imports. A number of steel producers and those supplying steel companies have had to lay off workers in recent months due to depressed steel prices.

A number of U.S. steel producers have filed dumping charges against foreign producers, saying dumping has resulted in rock-bottom prices. Products are “dumped” when producers sell them at a lower price than it costs to make them.

Employing more than 500 in 40 offices throughout the world, Duferco was created in 1979 by steel professionals. At first, the company concentrated its operations in Brazil where it became the leading exporter of that country’s steel. From there, Duferco branched into sourcing steel products from other countries in South America and then into North America, Europe and the Far East.

More recently the company started trading steel through eastern European mills. At the same time, Duferco began buying and selling raw materials for steel production throughout the world. Duferco’s trading sales volume in 1997, the latest year available, was more than $2.577 billion. The company has set a goal of doubling its sales and related profits over the next three to four years.

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Updated January 5, 1999
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