Texas Rebar Mill Sold to Japanese Steelmaker
12/22/2016 - Japan’s Kyoei Steel Ltd. has acquired a Texas rebar mill for approximately US$52 million, the company said on Thursday.
The acquisition of the EAF-based mill in El Paso,Texas, establishes a manufacturing presence in the U.S. for Kyoei, which has been looking to expand its foreign steel business.
“As the company has held numerous discussions regarding investment in foreign business and considered that the steel business in mainly Texas through the West Coast of the U.S. is prospective, the company has decided to acquire all interests in (the mill),” the company said in a statement.
“By having a new business base in the U.S., we intend to spread the risk of business investment and expand the global network of the company, and enforce the revenue base of the foreign steel business.”
Kyoei Steel acquired the mill, known as the Vinton facility, from Black Diamond Capital Management, which itself had bought the mill and other long products facilities from ArcelorMittal earlier this year. ArcelorMittal divested the facilities as part of an effort to optimize its U.S. operations.
Since then, Black Diamond has been operating the facilities under the Bayou Steel flag.
"We have been pleased with the performance of the Vinton facility as part of the Bayou Steel Group during our ownership," said Black Diamond founder and managing principal Stephen H. Deckoff in a statement. "The Vinton facility is in a great position to join Kyoei and continue to build upon the success achieved to date."
The mill has the capacity to roll about 200,000 tons of rebar and forge 50,000 tons of grinding balls, which are sold into the mining industry.
The sale leaves Bayou Steel with melting and rolling plant in LaPlace, La.; a rolling mill in Harriman, Tenn.; and three stocking depots in Tulsa, Okla.; Chicago, Ill.; and Pittsburgh, Pa.
The LaPlace and Harriman plants produce light structural shapes and merchant bar.
“Black Diamond continues to believe in the long-term value and prospects of the remaining operations of the Bayou Steel Group, including the facilities in LaPlace and Harriman as well as the stocking depots in Tulsa, Chicago and Pittsburgh," Deckoff said.
"We are proud to have them as part of Black Diamond and we look forward to continuing to support these facilities."
“As the company has held numerous discussions regarding investment in foreign business and considered that the steel business in mainly Texas through the West Coast of the U.S. is prospective, the company has decided to acquire all interests in (the mill),” the company said in a statement.
“By having a new business base in the U.S., we intend to spread the risk of business investment and expand the global network of the company, and enforce the revenue base of the foreign steel business.”
Kyoei Steel acquired the mill, known as the Vinton facility, from Black Diamond Capital Management, which itself had bought the mill and other long products facilities from ArcelorMittal earlier this year. ArcelorMittal divested the facilities as part of an effort to optimize its U.S. operations.
Since then, Black Diamond has been operating the facilities under the Bayou Steel flag.
"We have been pleased with the performance of the Vinton facility as part of the Bayou Steel Group during our ownership," said Black Diamond founder and managing principal Stephen H. Deckoff in a statement. "The Vinton facility is in a great position to join Kyoei and continue to build upon the success achieved to date."
The mill has the capacity to roll about 200,000 tons of rebar and forge 50,000 tons of grinding balls, which are sold into the mining industry.
The sale leaves Bayou Steel with melting and rolling plant in LaPlace, La.; a rolling mill in Harriman, Tenn.; and three stocking depots in Tulsa, Okla.; Chicago, Ill.; and Pittsburgh, Pa.
The LaPlace and Harriman plants produce light structural shapes and merchant bar.
“Black Diamond continues to believe in the long-term value and prospects of the remaining operations of the Bayou Steel Group, including the facilities in LaPlace and Harriman as well as the stocking depots in Tulsa, Chicago and Pittsburgh," Deckoff said.
"We are proud to have them as part of Black Diamond and we look forward to continuing to support these facilities."
