Officials from Chicago-based Esmark Inc. toured Sparrows Point yesterday, the latest in a string of potential buyers that have filed through the Baltimore County steel plant in the past two weeks.
Netherlands-based Mittal Steel Co. NV, which must sell Sparrows Point to abide by a Justice Department ruling, has been tight-lipped about who has come through the plant. Workers say the tours are led by managers, who refuse to disclose who the interested parties are.
Esmark's chairman and chief executive officer, James P. Bouchard, confirmed yesterday that he was at the plant for a tour.
"We think Sparrows Point is an excellent strategic fit with our assets at Wheeling-Pitt," Bouchard said, referring to a recently purchased plant in West Virginia that makes carbon flat-rolled products. Sparrows Point could feed steel slab to Wheeling-Pitt, he said.
Mittal was ordered to sell Sparrows Point to avoid antitrust issues over tin production in the United States after its $33 billion merger with Luxembourg-based Arcelor SA is complete. Mittal must find a buyer by the end of May but can ask for a 60-day extension. A buyer is subject to Justice Department approval.
Esmark had a tentative agreement to buy another Mittal plant in Weirton, W.Va., but that deal was scrapped when the Justice Department ruled that Mittal must sell Sparrows Point instead.
Mittal had said that the list of bidders included American and foreign steel companies, and private equity groups.
John Cirri, president of United Steelworkers Local 9477, which represents hourly workers at Sparrows Point, said there are eight serious potential buyers.
"They are taking tours, they're kicking the tires, so to speak," said Cirri, who is at home recuperating from a heart attack but said he has been in contact with plant management and union members.
"Once a potential buyer steps forward, then we will be sitting down and talking to them," Cirri said.
Only Esmark and CSN of Brazil have publicly confirmed that they are on the short list. CSN, which looked at Sparrows Point several years ago when it was owned by Bethlehem Steel Corp., has a rich supply of iron ore in South America, and could barge it to Sparrows Point, which has deep port access.
Cirri said he and his members are hoping a buyer will invest further capital in the 118-year-old plant. While Sparrows Point has fared better than other plants under Mittal, it was not slated for any improvements, other than environmental remediation .
Once Mittal's merger with Arcelor is complete, the combined company will be the largest in the world and produce more than 110 million tons of steel per year.
Sparrows Point produces about 3 million tons per year, and employs fewer than 2,500 workers. Before going bankrupt, Bethlehem Steel built a new cold mill at the plant and relined the blast furnace.
Bouchard said he was impressed with the work force and plant operations. He told The Sun recently that he is evaluating other plants that could support Sparrows Point and bolster production here should Esmark come out the winner.
"We think the steelmaking shop and the blast furnace are the best in North America," he said.