NEWS ARCHIVE : MEDIA HIGHLIGHTS

 

Esmark Executive Rebuilds in Steel

By Joe Napsha, PITTSBURGH TRIBUNE-REVIEW


A Sewickley-based businessman who amassed a steel industry empire that included 10 service centers and the former Wheeling-Pittsburgh Steel Co. before selling it two years ago, is again rebuilding his steel industry holdings.

James P. Bouchard’s Esmark Steel Group in Chicago this week announced it acquired the assets of Kelco Metals Inc., a steel service center in Schaumburg, Ill., for more than $9 million. The company, with plants in Illinois and South Carolina, has annual revenue of $45 million. “The valuations are pretty strong,” CEO Bouchard said of the deal to expand his new service center empire.

The Esmark Steel Group business, a subsidiary of Esmark Inc. of Sewickley, has been on a binge the past 11 months, buying five companies and employing nearly 300 workers, Bouchard said. “The company is profitable” despite a slowdown in the steel industry, he said. “We’re pretty happy. We think we will be in a better position” when the economy improves, he added. Bouchard said he hopes to increase Esmark’s annual revenue from $400 million to about $500 million next year.

He has shown a knack for good timing when it comes to buying and selling assets. Bouchard sold the original Esmark Inc. with its 10 steel service centers and the Wheeling-Pittsburgh Steel plants to OAO Severstal, Russia’s largest steelmaker, for about $775 million in August 2008. His new Esmark Inc. will be a holding company with 40 percent of its holdings in steel, 40 percent in oil and gas, and 20 percent in other businesses, he said. The other businesses include an aviation unit that provides contract medical flight services to the famed Cleveland Clinic.

Bouchard formed Esmark Steel Group in November 2009 to pursue and acquire steel service centers in the Midwest. He started decades ago in the steel processing business and returned to it by buying Amtex for $10 million and renaming it Chicago Iron & Steel. In May, Esmark reacquired Sun Steel Inc. and Century Steel Inc., both in Chicago Heights, Ill., and Independent Steel Co., in Cleveland. Esmark had sold those service centers to Severstal two years ago. Esmark also bought Excalibur Machine Co. in Meadville, for $3.5 million. Bouchard said he is not done buying companies. He is looking at two more steel service businesses, but is under a confidentiality agreement.

Most of the company’s energy business is devoted to oil production in Oklahoma, Bouchard said. He’s not sure whether he will expand into natural gas drilling in the Appalachian basin’s Marcellus shale-rich reserves.

He sold the original Esmark to OAO Severstal at the height of the steel industry boom, at a time when a steelmaker like U.S. Steel Corp. reported net income of $2.1 billion for the year. Months after Bouchard got out of steel business, the industry plunged into a deep recession, pulled down by the global financial crisis that is continuing.

“The (steel) industry just fell off the cliff,” Bouchard said.
Now, two years later, Severstal is trying to sell the former Wheeling-Pittsburgh Steel mills in the Ohio Valley, and plants in Warren, Ohio, and Sparrows Point, Md.
Bouchard said he has no intention of getting back into the steelmaking business. He said Severstal had a tough task integrating the old Wheeling-Pittsburgh mills, plus the mills it had acquired in Ohio and Dearborn, Mich.