AK Steel To Permanently Close Kentucky Coke Plant
12/29/2010 - AK Steel announced plans to permanently close its Ashland, Ky., coke plant in 2011. The company says the plant, which employs 263, is no longer cost-competitive.
AK Steel announced plans to permanently close its Ashland, Ky., coke plant in 2011.
The company said the facility, which produces coke for the company's Ashland Works blast furnaces, can no longer be operated cost competitively due to increased maintenance and increasingly stringent environmental regulations. As a result, the total per-ton cost of coke produced by the plant is significantly higher than all other sources of coke for the company.
The company said that further operation of the Ashland Coke Plant is not in the best interests of the company and its shareholders, despite the company’s goal to be more self-sufficient in steelmaking raw materials, and that replacing Ashland's high cost coke would help make the balance of AK Steel's Ashland Works, which employs nearly 900 men and women, more competitive. The company has secured alternate sources of coke to meet the needs of its blast furnaces.
The company said it would do its best to provide jobs for those affected — 263 hourly and salaried employees — at its Ashland Works or elsewhere in the company.
"AK Steel recognizes that this is a difficult time for the employees who are affected," said James L. Wainscott, Chairman, President and CEO of AK Steel. "We are committed to helping them as much as possible during this transition, including, where possible, placing them in jobs available elsewhere at the Ashland Works or other operations within the corporation. The Commonwealth of Kentucky has been very supportive of our goal to make Ashland Works more competitive and we appreciate those ongoing efforts."
Procedures for the closure are to begin immediately and are expected to be completed early in the second quarter of 2011.
AK Steel said it would incur a pre-tax charge of approximately $80 million for the closure, most of which will be reflected in the company's fourth quarter 2010 financial results. Approximately $50 million of this charge will be non-cash relating to the write-off of property, plant and equipment. The remaining amount will result in cash payments made over several years, of which approximately $18 million relates to employment costs and approximately $12 million relates to closure costs.
AK Steel produces flat-rolled carbon, stainless and electrical steels, primarily for automotive, appliance, construction and electrical power generation and distribution markets. The company employs about 6200 men and women in Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pa.; Ashland, Ky.; Rockport, Ind.; and its corporate headquarters in West Chester, Ohio.
AK Tube LLC, a wholly owned subsidiary of AK Steel, employs about 300 men and women in plants in Walbridge, Ohio, and Columbus, Ind. AK Tube produces carbon and stainless electric resistance welded (ERW) tubular steel products for truck, automotive and other markets.
