Algoma Steel

#4932

Rank

$741.55M

MarketCap CA

CA Canada

Country

Summary
Algoma Steel Group Inc. produces and sells steel products primarily in North America. It provides flat/sheet steel products, including temper rolling, cold rolled, hot-rolled pickled and oiled products, floor plate, and cut-to-length products for the automotive industry, hollow structural product manufacturers, and the light manufacturing and transportation industries; and plate steel products that consist of rolled, hot-rolled, and heat-treated for use in the construction or manufacture of railcars, buildings, bridges, off-highway equipment, storage tanks, ships, and military applications. Algoma Steel Group Inc. was founded in 1901 and is headquartered in Sault Ste. Marie, Canada.

History

Construction of the steelworks started in February, 1901. On February 18, 1902 the first Bessemer converter was put in operation using pig iron made from the Helen mine, owned by Algoma. The first rails were produced by the complex in May 1902. However, blast furnaces for pig iron manufacture were not completed at the site until 1904. Unlike most other steel producers, Algoma had no access to local coal, forcing it to import coal and coke from the United States. The Bessemer process was felt to produce steel that was well-suited to manufacture of rails, which was the Algoma complex's primary product for the first two decades of its existence.

Shortly after founding Algoma, Clergue's various financial operations suffered reverses and he lost control of the Sault Ste. Marie complex, being replaced as general manager in 1903 and by 1908 was no longer on the company's board of directors. Initially the company specialized in manufacture of rails for Canadian railways, but this soon became a dead-end as railway construction passed its peak.

During the First World War Algoma made steel for artillery shells but after the war continued to rely on rail production. The necessity of importing ore and coal from the United States due to the low quality of Canadian iron ore, as well as the absentee owners' greater interest in annual dividends than building a viable industrial complex, held back Algoma during the 1920s. At the height of the Great Depression, the company was insolvent and in receivership until Sir James Dunn gained control in 1935 and restored it to profitability. Dunn's policy of never paying a dividend to stockholders, coupled with extensive modernization and expansion during the Second World War, and an extended period of steel demand up until the mid-1950s, allowed Algoma to expand and become a more balanced steel producer.

From 1988 to 1991 Algoma was owned by Dofasco, making the combined company the largest steel producer in Canada. However, a strike at Algoma and other Dofasco subsidiaries in 1990 caused Dofasco to abandon ownership.

The high value of the Canadian dollar coupled with competition from mini mills, lower-cost and currency-strong Asian countries and dumping by Japanese companies has hurt Canadian primary steel producers. In 2002, the company emerged from bankruptcy protection for the second time in a decade, having previously gone into bankruptcy in 1990. Denis Turcotte, the President and CEO, was largely credited with Algoma's resurgence, making it one of the most efficient steelmakers in North America.Algoma Steel announced on August 3, 2005, that the company was no longer for sale after a $64.7 million second quarter profit. The company stated that they are going to focus on value-enhancing, non-sale alternatives. Algoma also announced a special dividend of $6.00 per share payable on August 31, 2005 to shareholders of record on August 17, 2005 and a normal course issuer bid for up to 3.3 million shares.

On February 8, 2006, Algoma Steel announced a $55 million profit for their fourth quarter ending December 31, 2005. As a result of this and redemption of their 11% notes on January 9, 2006 the company declared themselves debt free and had an operating surplus of over $400 million in cash. This cash surplus attracted the attention of some shareholders who wanted to see the cash distributed as dividends, echoing Algoma's historic problems almost exactly a century earlier.

In October 2006, Algoma Steel was awarded a power purchase agreement by the Ontario Power Authority to build, own and operate a co-generation power plant utilizing by-product fuels such as blast furnace gas and coke oven gas ; Algoma Steel has founded a limited partnership company called Algoma Energy LP to own and operate the co-generation facility. The facility's contract capacity was said to be 63MW.

On 15 April 2007, Essar Global made an offer to acquire Algoma Steel Inc. for 1.85 billion CAD in cash. It was announced on 20 June that Essar had completed its purchase of all outstanding shares.On June 23, 2008, following its purchase by Essar Group, Algoma Steel Inc. announced that its name had been changed to Essar Steel Algoma Inc. This came along with a logo change to the Essar Steel company logo.

On May 26, 2017, Essar Steel Algoma was rebranded once again, simply called Algoma. The announcement was made in Sault Ste. Marie, Ontario. For legal purposes, the factory will remain "Essar Steel Algoma Inc." until the company emerges from insolvency protection.In May 2021 Algoma had a yearly production capacity of 2.8 million tonnes of steel, for which it employed around 2,700 people.


Mission
Algoma Steel will strive to be a recognized leader in our industry, providing high quality products that are competitively priced and delivered on time.

Vision
Algoma Steel will strive to become the steel supplier of choice for our customers, offering reliable, innovative and cost-effective solutions that meet and exceed their expectations.

Key Team

Ms. Piper Lee Frech (Interim Chief Human Resource Officer)

Mr. Loris Molino (VP of Maintenance & Operating Services)

Michael Moraca (Treasurer & Investor Relations Officer)

Ms. Brenda Stenta (Mang. of Communications & Branding)

Mr. Rory Brandow (VP of Sales)


Recognition and Awards
Algoma Steel has won numerous awards and accolades over the years, including the Canadian Manufacturing Association Meritorious Award, the American Metal Market Canadian Producer of the Year Award, the Canadian Manufacturers and Exporters Metals Award, and the Queen’s Golden Jubilee Medal.

References
Algoma Steel
Leadership team

Mr. Rajat Marwah (Chief Financial Officer)

Mr. John Ralph Naccarato (Interim Head of Operations, VP of Strategy & Chief Legal Officer)

Mr. Michael Dennis Garcia (CEO & Director)

Products/ Services
Manufacturing, Mining, Precious Metals
Number of Employees
1,000 - 20,000
Headquarters
Sault Sainte Marie, Ontario, Canada
Established
1901
Company Registration
SEC CIK number: 0001860805
Net Income
500M - 1B
Revenue
Above - 1B
Traded as
ASTL
Social Media
Sun Mar 03 2024
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