New era to begin at Beth Steel

Sparrows Point plant starts mill today, saving facility

March 24, 2000|By Kristine Henry | Kristine Henry,SUN STAFF

Bethlehem Steel Corp.'s new cold sheet mill is scheduled to start up today at the company's Sparrows Point plant, marking a new chapter for the facility.

Before company officials announced in 1997 that the new mill would be built at the Baltimore County plant, the future of the facility -- and its 5,000 jobs -- was unclear. Some said the plant was too old and expensive to keep.

But with the state and county offering $80 million in financing and the union agreeing to job reductions and more flexible work rules, company officials decided to not only maintain the plant but to expand it.

The feature of the new $300 million, 800,000 square-foot mill is its linkage of a tandem mill and a pickler mill.

Cold mills take hot-rolled steel coils and roll them to precise thickness. With the old mill, the coils first went through the pickler -- an acid bath that removes surface impurities -- and then transported to the tandem mill that re-rolled them to the specified size.

In the new mill, the steel coils will go from the pickler mill to the tandem mill. That means 400 fewer workers are needed.

Today, workers are expected to begin with a trial run in the tandem mill. Production is expected to start slowly and be up to full speed later in the year. The pickler mill is not expected to be linked to the new tandem mill for about another month.

Unfinished hot-rolled steel sells for just under $300 per ton, but cold-rolled steel can sell for $100 to $200 more per ton, depending on its coating, meaning the new mill will not only increase production capacity, but will produce more value-added products.

That should be especially helpful given Bethlehem's financial position.

In January, the company reported that inexpensive imports had lowered market prices and played a large part in its 1999 loss of $183 million, or $1.72 per share, compared with a profit of $120 million, or 64 cents a share, in 1998. Sales for last year were $3.9 billion, down about 13 percent from $4.5 billion in 1998.

Cold-rolled steel from Sparrows Point is used in containers, automotive parts, metal furniture and hardware. When coatings are added in Sparrows Point's coating lines, the steel is used for commercial and residential construction, and heating ventilation and air conditioning, automotive and appliance industries.

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