One of the world?s richest businessmen blew through town Monday for a whirlwind tour of his latest acquisition ? the Sparrows Point steel mill.
Alexey Mordashov, general director of Russian steel firm Severstal, pronounced the plant in overall “good shape” following his first tour of the mill Monday. But he pointed out a few areas of concern, including the blast furnace at the heart of the mill.
“Each piece of the facility has its own profile, its own needs,” said Mordashov. “A change of hands is a good time to do some of these things.”
Mordashov joined Severstal North America President and Chief Executive Officer Ronald Nock and other company executives for a tour of the plant Monday. The company purchased Sparrows Point in March for $810 million from fellow steel giant ArcelorMittal, which had been ordered by the U.S. Department of Justice to divest the plant.
Nock said the plant?s blast furnace will be shut down for two to three weeks in August to undergo improvements and upgrades, the first step in the company?s pledged five-year investment plan in Sparrows Point. The company said it will invest more than $500 million in the plant and will bring the steel mill back up to its full capacity of 3.6 million tons of steel per year.
“We have a very strong market for steel right now,” Mordashov said. “If you run the plant at full capacity, it positions you better in terms of cost.”
Itwas the first time Mordashov has visited Sparrows Point. Despite the innocuous title of “general director” on his business card, Mordashov, 42, turned one steel mill into the multinational conglomerate Severstal, acquiring ports and transportation companies, coal producers and automakers. He was named the world?s 18th-richest man by Forbes magazine last year, with an estimated personal fortune of $21.2 billion.
Mordashov said part of making the Point profitable may include the construction of a coke oven to produce the coal-derived fuel for the mill?s blast furnace. Coke ovens at the plant were shut down nearly two decades ago over environmental concerns, but next-generation technology has made them safe and even capable of generating electric power, Nock said.
Severstal is also working on a new agreement with the United Steelworkers union. The current agreement is set to expire at the end of the summer, but plant officials did not expect difficult negotiations with the union.
“They?re extremely upbeat and positive about the change [in ownership],” said Thomas Russo, Sparrows Point vice president and general manager.
