CitiSteel Sold to Investment House

H.I.G. Capital, a private investment firm headquartered in Miami, has purchased CitiSteel USA Inc. in Claymont, Del., company officials confirmed Tuesday.

CitiSteel had been a subsidiary of China International Trust & Investment Corp., based in Beijing, China, an investment arm of the People's Republic of China. Formed in 1988, the company employs about 350 workers.

H.I.G. finalized its acquisition of the steel mill June 10. Terms of the agreement were not disclosed.

In a written statement distributed to customers, suppliers and employees last week, Yang Shu, president and chief executive of CitiSteel, said there would be "no immediate changes due to the acquisition." He added that the current management team, policies and procedures would remain.

James Ryan, manager of human resources at CitiSteel, would not say what the long-term employment plans are for the new company. But he said he was optimistic about the current state of the steel industry.

"The steel business is very good right now," Ryan said. "Demand is very strong."

CitiSteel produces more than 300,000 tons of steel a year and had sales of about $71 million last year, Ryan said. The company sits on more than 300 acres.

The company contributes about $136 million annually to Delaware's economy, said Judy McKinney-Cherry, director of the Delaware Economic Development Office. She said she expects the company will maintain its work force and operations under the new ownership.

"It could have a positive effect as long as the company works with the people in the community as well as their employees so everybody grows and prospers," said state Sen. Catherine Cloutier, R-Heatherbrooke. "Hopefully, H.I.G. will live up to what they are saying they will do."

H.I.G. has controlling interests in more than 40 other businesses in various industries with a combined revenue of more than $5 billion, according to the company's Web site. The firm also has more than $1.5 billion of equity capital under management. Its investors include banks, financial institutions, pension funds, university endowments and public corporations.

H.I.G. is the most recent in a long line of owners of the Claymont steel mill.

The mill, which converts scrap metal into steel plates, has been a big part of Claymont's industrial history and continues to employ generations of its residents.

CitiSteel bought the Claymont steel and plate mill plant in 1988. It was purchased from the then-bankrupt Phoenix Steel for $13.5 million. Phoenix Steel, which owned the Claymont plant and another one in Phoenixville, Pa., employed nearly 1,000 workers at the time.

"The steel industry has been performing better than it has in at least 25 years," said John Anton, director of steel services at Global Insight in Washington, D.C. "We need to make more steel than we have made before." The (Delaware) News Journal