2009-06-11 / Front Page

Sayreville steel mill suspends production

Market conditions prompt Gerdau Ameristeel closures
BY MICHAEL ACKER Staff Writer

ASayreville steel mill announced this week that it is suspending production in the borough and closing a mill in a neighboring town due to the downturn in the economy.

Gerdau Ameristeel will temporarily shut down its steel mill on North Crossman Road and will permanently close its rolling mill in Perth Amboy. The company is one of the largest producers of steel rebar in the New York metropolitan area.

"The recession has certainly come to Sayreville before this news, and we're all held hostage to the global recession," Sayreville Mayor Kennedy O'Brien said. He added that "there are essentially no orders coming in" for the mill's products.

Gerdau Ameristeel made the announcement Monday, saying that the suspension of production at its Sayreville mill and the closing of the Perth Amboy facility will take place gradually over the next several months. The company said it would restart its Sayreville operation when business conditions warrant. The company is also discussing the potential closure of its steel mill in Sand Springs, Okla., with the United Steel Workers Union.

The company will continue to offer its full range of products to customers throughout North America and service to customers will be uninterrupted due to production at its other steel mills in the U.S. and Canada.

Mario Longhi, president and CEO of Gerdau Ameristeel, issued a statement, saying this was a difficult decision that came after analysis and review of the marketplace, the company's production capabilities and an assessment of the most cost effective alternatives to meet the current and future needs of customers.

"These actions follow a series of steps the company has taken over the last nine months to reduce its costs," Longhi said. "We understand the impact that these decisions will have on the lives of our employees and our communities, but unfortunately market conditions mandated that these actions be taken at this time. The company will make every effort to help displaced employees through this time of transition."

The company would not release the number of employees affected by the mills' closings.

O'Brien said the suspension of production is going to impact Sayreville in part because the borough operates a water utility. "It's unfortunate," O'Brien said. "It's going to impact our water weight, because they are the largest water customer in Sayreville."

O'Brien said the company does not have the orders necessary to keep the plant open. He said he hopes that its idling period is brief and the facility can go back to operations as soon as possible.

The company's decision, he said, is due entirely to the global economic crisis. He said he believes the steel mill is likely to reopen when the economy recovers.

"The steel mill in Sayreville is strategically located to service the Northeast corridor, which is scheduled to have billions of dollars of tarp funds, which is scheduled to come in for public projects," O'Brien said. "As those come in, the steel mill could start up and supply rebar."

O'Brien extended his best wishes to the workers at the steel mill in Sayreville and the rolling mill in Perth Amboy, and noted that Gerdau Ameristeel does not want to lose them.

"They're highly skilled steel workers," O'Brien said. "They are an important commercial resident in the borough. They're the single-largest water customer and they are very important to the overall health and wellbeing of the borough."

Environmental issues

On the subject of allegations that the steel mill is responsible for black dust material that accumulates on neighboring properties, O'Brien said Gerdau Ameristeel has made a significant effort to address the concerns of nearby residents.

"They have been conducting themselves in a very open and transparent manner with the CAP [the borough's Community Advisory Committee] and they've taken great strides with rectifying the issues their residential neighbors have had," O'Brien said. "They've been very responsive."

Pat Walsh, chairman of the Sayreville Environmental Commission and a resident of the neighborhood near the steel mill, has been negotiating with Gerdau Ameristeel for over a year. Walsh said he is seeking to have the company compensate residents for any potential damage, but the details of those negotiations are private.

He said that despite the company's efforts to power wash neighboring homes, dust continues to accumulate on properties in the area. Walsh said the company installed screens to eliminate dust and now has washers on trucks to further address the issue, so there has been some improvement.

"It's still a problem," Walsh said. "It's not as heavy as it was, but it's still a problem."

Walsh said the company has made a significant effort to get residents the answers they want by hiring a toxicologist and epidemiologist to review data that the steel mill gathered on particulates. That expert said there was no health concern based on those figures, andWalsh said the company's monitoring efforts would continue. Gerdau Ameristeel spokesman Steven Ross said an administrative consent agreement was reached with the U.S. Environmental Protection Agency in April related to a late filing of its toxic release inventory reports for dioxin and dioxin-like compounds, lead, mercury and zinc in 2004. He said this occurred inadvertently due to a personnel change at the mill.

The agreement includes Gerdau Ameristeel's donation of fire and safety emergency response equipment valued at about $50,000 for Sayreville's emergency responders. It includes turnout gear for firefighters, electronic signage for use by police cruisers in managing and alerting the public to emergencies and other equipment. The company also paid a penalty of about $19,000, Ross said.

Ross said air monitoring would continue for the foreseeable future while the mill winds down its operations over the next several months. The mill will keep the public informed, he said, and is using a dust-washing facility, dust suppressants and water sprays to reduce the amount of dust leaving the property.

"I can tell you that we've instituted a variety of measures that are designed to reduce dust from the mill," Ross said.

Timothy Eppinger, a neighbor who has expressed concerns about dust in the neighborhood since 2006, commented on the news that the mill is suspending operations.

"No one really wanted to see the mill shut down for any reason, but let's hope if they get the OK to restart, they take time to do things right the first time and take more responsibility for their actions and eliminate the black particle contamination of the area," Eppinger said.

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