US. Severstal agrees to sell steel plant

US. Severstal agrees to sell Allenport steel plant to North American Trading. by Joe Napsha Severstal North America Inc. said it has signed a letter of intent to sell its Allenport, Washington County, plant to a California-based company that wants to reopen the plant this fall with about 75 workers. Severstal expects to complete the deal in August with North American Trading Co. of Chino Hills, Calif., which is owned by William R. Kingston. Severstal still has some minor points to be iron out in the agreement with Kingston, Severstal spokeswoman Bette Kovach said. Both Severstal and Kingston declined to comment on terms of the sale of the plant and 400 acres of land along the Monongahela River. Kingston wants to reopen the plant to produce a cold rolled steel that will be clad with a thin coat of stainless steel. Most of the steel -- about 75 percent -- would be shipped downriver to New Orleans and sold to overseas markets for use in appliances and automobiles, Kingston said yesterday. The plant would need about $400 million in upgrades to reach full production, which would be done in phases over about five years, he said. Kingston said he has financial backing in place but would not disclose details. The Allenport plant, once part of Wheeling-Pittsburgh Steel Corp., has been closed since May 2008, when former owner Esmark Inc. shut down operations because of the high cost of production. The mill has a pickle line, tandem mill, temper mill and annealing facility, all critical to the final forming and condition of light, flat rolled steel products, Severstal said. The Allenport plant was operated for about four decades by Wheeling-Pittsburgh Steel before it was acquired by Esmark in 2007. North American Trading is discussing operating plans with the United Steelworkers Local 1187 at Allenport, Kingston said. The company will seek a labor contract with the union, which represented about 235 employees at the plant when it closed in May 2008. Kingston, who had operated a titanium company that went bankrupt in 2001, has a patent pending for a special coating process that he says will make the product from Allenport cheaper than competitors. Kingston said he has more than 20 years of experience in the metals industry.