NEW YORK Gerdau Long Steel North America intends to lay off 30 to 35 employees at its St. Paul, Minn., hybrid mill, even as it invests $50 million at the facility to upgrade a continuous caster and ramp up its special bar quality (SBQ) production, it said.
The layoffs are due to lower-than-anticipated demand for the mills products, a company spokesman told AMM
Production schedules will return to normal when market demand recovers, Gerdau said.
The Tampa, Fla.-based company continues work on its $50-million caster at the same mill, which remains on target for completion in early 2014. The upgrade will increase the mill's SBQ production capacity by 100,000 tons to approximately 550,000 tons per year
(amm.com, May 7
), the spokesman said.
"We definitely think the caster will make St. Paul a more competitive mill," the spokesman said. The loss of workers "really underscores why we need to make this investment in St. Paul, so that itll make the St. Paul mill more competitive in the future."
The caster is partially funded by $500,000 from the Port Authority of St. Paul, which stipulates that the loan wouldnt have to be repaid if the mill retained a certain number of workers. The layoffs dont affect the status of the loan, the spokesman for Gerdau Long Steel NA, a subsidiary of Porto Alegre, Brazil-based Gerdau SA, said.
The St. Paul mill currently produces a wide array of products, including SBQ, rebar and structural steel. The caster is expected to result in a shift in the mills product mix, as it increases SBQ production.
Editor's note: This story was updated Jan. 31, 2013, to clarify that production schedules will return to normal when market demand recovers and to correct the production capacity increase expected from the upgrade of the continuous caster.