Mexican steel company Grupo Simec announced the definitive closure of two Republic Steel plants in the United States and the dismissal of 500 of its more than 2,000 workers at its subsidiary company. Production will be moved to its state-of-the-art steel mill in Tlaxcala, Mexico.
"It is announced that it will indefinitely suspend steel manufacturing operations at its Republic Steel plants in Canton, Ohio, and Lackawanna, New York (...) Around 500 Republic Steel employees will be suspended indefinitely," Simec told the market's values in a statement.
The highest prices in inputs such as raw materials, labor, consumables. In addition to a competitive market, "reduced demand" and high costs to maintain the "changing obligations imposed by local, state and federal environmental regulators" were the main reasons for the permanent closure of those two units, he said.
“Republic Steel's US customers will be served through Grupo Simec's state-of-the-art steel mill in Tlaxcala, Mexico. Customers in the United States will not experience any interruption in service,” the statement details.
In July 2005, Industrias CH (controller of Grupo Simec) and Simec purchased Republic Steel for approximately $250 million. In 2016, Republic Steel sold its Memphis, Tennessee plant for $350 million.
Until now, Republic Steel has a steel production plant located in Canton, Ohio; a hot-rolled and steel producer in Lorain, Ohio; a hot rolling plant in Lackawanna, New York and three cold finishing plants in the cities of Massillon and Solon, Ohio and another in Hamilton, Ontario, Canada.
The Mexican company reported that Republic Steel is the only producer of lead-alloyed steel in North America, which implies large investments to comply with changing local, state and federal environmental regulations.
Because Republic Steel produces steel in a 125-year-old facility, it proved too challenging. For this reason, "Grupo Simec felt that it would be more environmentally responsible to do so in its new state-of-the-art plant in Tlaxcala."
Grupo Simec is an international producer of special quality steel bars (SBQ), steel wire, bars, and long commercial and structural steel products. It operates in Mexico, Brazil, the United States and Canada.