Höganäs AB buys American steel mill

Höganäs AB buys American steel mill The object of Höganäs AB's establishment on the North American market is to achieve substantial market share. Local manufacture of iron powder is a strategically important factor in achieving this aim. As a step in its establishment strategy, Höganäs AB has therefore entered into an agreement with ChemFirst, Inc. whereby Höganäs is to acquire FirstMiss Steel, Inc., a subsidiary of ChemFirst. FirstMiss Steel, located in Hollsopple, Pennsylvania, was started at the beginning of the eighties and has subsequently been expanded for production of high-quality alloyed steel. ChemFirst has decided to divest itself of its steelmaking operations, and production at FirstMiss Steel has been successively cut back; at present it is confined to certain high- alloy products. 2 FirstMiss Steel occupies an 80-hectare (200-acre) site with a 34 000 m 2 2 2 (366 000 ft ) factory building including 1 500 m (16 000 ft ) of office and laboratory space. The purchase includes infrastructure and equipment for production of about 250 000 tonnes per annum of high-quality steel. The equipment includes an electric arc furnace, ladle furnace, AOD converter and vacuum degassing plant. There is also a smaller line consisting of an induction furnace, ladle furnace and vacuum treatment equipment for manufacture of high-alloy products. The purchase price amounts to approx. MUSD 11. The sale is anticipated to close during the first quarter subject to finely receipt of regulatory approvals. Höganäs intends to convert the steel mill into a high-efficiency integrated manufacturing facility for atomized, customized quality iron powder. A comprehensive program of investment is planned at an estimated cost of about MUSD 36. In the first phase, this will result in an annual production capacity of 100 000 tonnes. The project is scheduled for completion in the third quarter of 2001. About 35 persons will be employed initially, the figure successively rising to more than 100 employees after two years. Since the operation will be run primarily as an investment project until production starts, there will be no Profit & Loss effect until after then. This investment will enable Höganäs to speedily comply with North American customers' stated desire for Höganäs to start production of high-quality iron powder on that continent. Pittsburgh, 20 January 2000 Claes Lindqvist President and Chief Executive Officer ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/01/20/20000120BIT00290/bit0001.doc http://www.bit.se/bitonline/2000/01/20/20000120BIT00290/bit0002.pdf