Grupo Simec To Idle Steelmaking Operations Indefinitely At Its Republic Steel Mills In Canton, Ohio And Lackawanna, N.y.

11 August 2023

Grupo Simec, a prominent international producer of special bar quality (SBQ) steel, steel wire, rebar, and commercial and structural steel long products, has announced the indefinite suspension of steelmaking operations at its Republic Steel mills located in Canton, Ohio, and Lackawanna, N.Y.

Throughout the suspension period, Grupo Simec's advanced steel mill in Tlaxcala, Mexico, will cater to Republic Steel's U.S. customers, ensuring uninterrupted service. As a consequence of this consolidation, around 500 Republic Steel employees will be placed on indefinite furlough.

Jaime Vigil, a Republic Steel board member and executive advisor, noted that Grupo Simec exhausted all other potential alternatives before opting to idle these two operations.

"The SBQ market in the U.S. has presented immense challenges, marked by competitive pricing and diminished demand," stated Vigil. "Simultaneously, escalating input costs across raw materials, consumables, and labor have arisen due to the inflationary environment witnessed in the U.S. over the past year."

Vigil expressed that there were expectations for the inflationary pressures to ease, and for Republic Steel to observe an uptick in business following the passage of the Infrastructure Bill in 2021 and the Inflation Reduction Act in 2022. Unfortunately, neither materialized in a timely manner.

Both Grupo Simec and Republic Steel are the exclusive producers of leaded steel in North America, and their commitment to environmentally responsible practices is noteworthy. In the United States, significant efforts were made by the company to remain compliant with environmental regulations, particularly the National Ambient Air Quality Standard for leaded steel production. Investments of approximately $10 million were made in the Canton facility to uphold compliance and address evolving obligations imposed by local, state, and federal environmental regulators.

Although Republic Steel has maintained strict adherence to National Ambient Air Quality Standards for leaded steel production over the past two years, the challenge of ensuring future environmental compliance while operating in facilities up to 125 years old proved to be formidable. Consequently, Grupo Simec deemed it most environmentally responsible to transition these operations to its state-of-the-art mill in Tlaxcala.

Vigil underscored their dedication to environmental responsibility, stating, "One of our core values at both Grupo Simec and Republic Steel is to always be environmentally responsible. As the only producers of leaded steel in North America, we also owe it to our customers, and their customers, to be a reliable supplier of such products."

While acknowledging the complexity of the decision, Vigil emphasized its necessity to continue providing the U.S. customer base with a consistent and dependable supply of products, including leaded steel, at a competitive price point. He reiterated their accountability to shareholders and customers and stressed that they are taking the steps needed to fulfill these responsibilities.

Vigil extended gratitude to Republic Steel employees for their dedication and hard work, recognizing their vital role in the company's legacy and leadership within the industry.

Acquired by Grupo Simec in 2005, Republic Steel holds a significant presence in the special bar quality (SBQ) steel sector, supplying products such as hot rolled steel bars, cold finished steel bars, cold heading quality rod and wire, and leaded steel bars. Based in Guadalajara, Mexico, Grupo Simec stands as one of the largest producers of SBQ in North America and a key producer of commercial and structural steel long products in Mexico.