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Algoma Steel Inc. (formerly The Algoma Steel Corporation, Limited; Essar Steel Algoma) is an integrated steel mill located on the St. Marys River in Sault Ste. Marie, Ontario, Canada. Algoma Steel was founded in 1901 by Francis Clergue, an Americans entrepreneur who had settled in Sault Ste. Marie. The company is a traditional blast furnace based steel maker that is building an electric arc furnace to produce steel with a lower carbon footprint.
Algoma Steel has been privately owned several times, listed on the Toronto Stock Exchange at least three times; and has been a subsidiary or affiliate of Canadian Pacific Limited (1980s), Dofasco (1988-1991) and Essar Group (2007-2017). Reflecting the challenging environment for Canadian steel makers, Algoma and its predecessor companies have been financially restructured at least four times. Algoma first was in receivership following the Great Depression in 1932; while in recent decades it emerged from bankruptcy protection in 1992 and 2004, and was in creditor protection again in 2015-2018.
In May 2021, it was announced that Algoma "was to become a public company again" as it had agreed a merger with New York–based acquisition firm Legato Merger Corp, which is a NASDAQ-listed special-purpose acquisition company. Following the deal, Algoma listed its shares on the Toronto Stock Exchange for the third time.
Shortly after founding Algoma, Clergue's various financial operations suffered reverses, having to shutter operations in 1903, causing the 1903 Consolidated Lake Superior riot. After restructuring, he lost control of the Sault Ste. Marie complex, being replaced as general manager in 1903 and by 1908 Clergue was no longer on the company's board of directors. Initially, the company specialized in manufacture of rail transport 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 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 financier Sir James Dunn, who had had a minority role in the mill's ownership since 1908, 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.
The high value of the Canadian dollar coupled with competition from , lower-cost and currency-strong countries and dumping by 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.
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.
On June 15, 2009, Essar Steel Algoma successfully started up a new, 85 MW cogeneration facility, to produce electricity and steam from the by-products of the coke making and iron making processes.
It features two 375,000 lb/hr boilers and a 105MW turbine combined with other related components such asite-specific, a blast furnace gas holder, condensate and feed-water systems, a water treatment plant, a cooling tower, a transformer, and a distributed control system. Essar has set a precedent as the first integrated steel manufacturer in Canada to construct a co-generation facility fueled with by-product gas from the operation.
Algoma's products are used in the automotive, construction, energy, manufacturing, pipe and tube, and steel distribution industries.[1]
Production and energy supply
Steel making facilities
Algoma currently has a capacity of 4 million tons per year. Primary steel making facilities include two , three coke batteries, two 260 short ton basic oxygen furnaces, with two ladle metallurgy stations for refining and alloying. Having abandoned the manufacture of steel rails, Algoma employs a direct Strip steel complex manufactured by Danieli of Italy, which casts strip directly and then rolls it to finished strip in the range of 0.047 inches to 0.625 inches in thickness, and widths to 64 inches. Algoma also operates a hot strip mill, a plate mill, and a cold strip mill. Algoma also manufactures welded structural beams.
Power generation and supply
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 (BFG) and coke oven gas (COG); 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.
Criticism
Air Quality
Algoma has exceeded provincial air quality standards with permission from Ontario’s Ministry of the Environment, Conservation and Parks (MECP). In 2023, Algoma had three regulatory exemptions: two for carcinogenic air pollutants, benzene and benzo(a)pyrene, and another for particulate matter. These site-specific standards permit the company to exceed annual air quality limits.
Current status
Algoma currently is the second largest steel producer in Canada. It is the largest employer in Sault Ste. Marie and currently has 2800 employees at the main plant. Algoma now produces hot and cold rolled steel (i.e. sheet and plate).
Leadership
President
Chairman of the Board
Further reading
External links
Categories: Steel Companies Of Canada, Essar Group, Companies Based In Sault Ste. Marie, Ontario, Companies Listed On The Nasdaq, Companies Listed On The Toronto Stock Exchange, Special-purpose Acquisition Companies, History Of The Steel Industry In Ontario, Companies That Have Filed For Bankruptcy In Canada, Companies That Have Filed For Chapter 15 Bankruptcy, 1901 Establishments In Ontario, Manufacturing Companies Established In 1901, Canadian Companies Established In 1901
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