Citizens Gas & Coke Utility announced its intention to close its Indianapolis Coke Manufacturing Division due to a declining U.S. market and increasing foreign competition. The decision to close the plant comes after the company was unable to sell the facility after 11 months on the market.

Indianapolis Coke has been part of Citizen’s Gas for nearly 100 years. Built in 1908 to produce gas for the Indianapolis area, Indianapolis Coke produced coke and was the primary source of gas for Indianapolis until interstate pipelines began delivering natural gas to the area in the 1950s.

Steep declines in the U.S. steel and auto industries over the past decade have resulted in greatly reduced demand for domestically-produced coke. Meanwhile, low-cost foreign steel and coke producers have thrived amidst steady growth in foreign auto and truck production. Some international producers are able to pay very low wages and do not have to meet the same stringent environmental standards.

Indianapolis Coke’s difficulty competing in the marketplace has produced substantial financial losses in recent years, including losing about $17.6 million in 2006. Citizens Gas also says the facility no longer fits with its long-term business strategy to be in the utility services business. Indianapolis Coke stopped producing gas for the utility’s Gas Division in the late 1990s.

Citizens Gas had been working with an investment banker for the past 11 months in an effort to sell the facility to a buyer that would continue operating the plant. Although the utility received interest from approximately 20 entities, negotiating with one prospective buyer for more than five months, no agreement to sell the facility was ever reached.

The company says the plant will be shut down gradually over the next several months and employment levels may be reduced as the process is completed.

“This is a very sad day for all of us at Citizens Gas & Coke Utility,” said Carey Lykins, President and CEO of Citizens Gas & Coke Utility. The company is now focused on helping employees transition to new careers, and has already offered 41 employees age 50 or older an early retirement incentive package.