LTV and Bethlehem Steel Form Two Joint Venture Companies
28 July 1999
LTV and Bethlehem Steel Form Two Joint Venture Companies
COLUMBUS, Ohio, July 28 -- The LTV Corporation
and Bethlehem Steel Corporation today announced formation of two
50-50 joint venture companies to serve the automotive industry: Columbus
Coatings Company, a producer of high-quality, hot-dip galvanized and
galvannealed flat-rolled steel; and Columbus Processing Company, a steel
slitting and warehousing operation. The estimated investment in the two joint
ventures is approximately $125 million.
Columbus Coatings will begin immediately to install state-of-the-art hot
dip galvanizing technology in an existing electrolytic galvanizing plant, L-S
II, located in Columbus and formerly a joint venture of LTV and Sumitomo Metal
Industries. The new company will have an annual capacity of approximately
500,000 tons of premium corrosion resistant steel for exposed automotive
applications. Production is scheduled to begin in the fourth quarter of 2000.
"The conversion of our existing electrogalvanizing facility offers a very
cost-effective way for LTV to serve our automotive customers' growing needs
for the highest quality hot dip galvanized steel. The conversion of the
existing plant will provide for the retention of a skilled and experienced
group of employees, thereby avoiding a plant closing and the loss of well-paid
jobs in the Columbus community," said Peter Kelly, chairman and chief
executive officer of The LTV Corporation. He said that the conversion was a
creative way to improve the returns generated by existing assets. Kelly
expressed the partners' appreciation for the support of the Columbus City
Council and Council President Michael Coleman.
"This joint venture is a form of consolidation that will enhance both our
companies' hot-dip-coating capacity while eliminating some excess
electrogalvanizing capacity," said Curtis H. Barnette, chairman and chief
executive officer, Bethlehem Steel. "The new ventures will be in the best
interests of our respective companies and will enable us to even more
effectively serve our customers. Bethlehem is proceeding with this project
with the expectation that fair trade in steel products will be restored," he
said.
In establishing the joint venture, Bethlehem acquired a 50 percent
interest in the L-S II Electrogalvanizing joint venture from Sumitomo Metal
Industries. LTV retained its 50 percent interest in L-S II and purchased from
Bethlehem a 16.5 percent equity interest in Walbridge Coatings, an
electrogalvanizing plant in Northwestern Ohio. LTV's ownership interest in
Walbridge will provide access to 33 percent of the plant's available line
time, enabling LTV to continue to satisfy its customers' needs for
electrogalvanized steel sheets. The Walbridge venture previously was a 50/50
partnership between Bethlehem Steel and Material Sciences Corporation of Elk
Grove Village, Ill. LTV Steel produces coated steel sheets at plants in East
Chicago, Ind., Hennepin, Ill., and its L-S Electrogalvanizing joint venture in
Cleveland. In addition to the existing Walbridge line, Bethlehem produces
coated steel sheets for the auto industry at Burns Harbor, Ind. and
Lackawanna, N.Y.
Bethlehem and LTV also jointly signed an agreement to purchase the assets
of Ohio Kanpoh (OK) Steel, also of Columbus. OK Steel, which ceased
operations in May 1999, provided steel slitting, inspection and warehousing
services for the auto industry. The facility will be renamed Columbus
Processing Company and is expected to resume operation in early 2000. With
facilities in close proximity to Columbus Coatings, the partners will have
access to high-quality steel processing services to satisfy the needs of their
automotive customers. The company also will provide steel processing services
to other customers.
Bethlehem Steel, with 1998 sales of $4.5 billion, is the second-largest
integrated steelmaker in the United States. LTV Corporation has annual sales
of $4.3 billion and is the third largest domestic integrated steel company.
LTV sales also include revenues from its metal fabrication investments.