Algoma Steel
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Algoma Steel Corporation was founded in 1902 by Francis Clergue, an American entrepreneur who had settled in Sault Ste. Marie, Ontario. At the height of the Great Depression, the company was insolvent until Sir James Dunn gained control in 1935 and restored it to profitability.
Competition from low-cost Asian countries and dumping by Japanese companies has hurt Canadian steel producers. In 2004, the company emerged from bankruptcy protection and is the third largest steel producer in Canada (behind Dofasco and Stelco). Algoma Steel is the largest employer in Sault Ste. Marie and currently has 2900 employees at the main plant and about 400 workers at the tube mill, which is not part of Algoma Steel.
Algoma Steel is responsible mainly for producing Plate and Sheet type steel which is its main money maker along with its Blanking operations and Welded Beams. The Welded Beam division is not attached onto the main plant and is located about 1 kilometre away from the plant in a different geographical location. In 2004, Algoma entered into the process of purchasing Stelco Steel, which is based in Hamilton, Ontario. The company has since withdrawn with its intentions to purchase Stelco and run two companies as one large integrated producer. The announcement was made on February 9, 2005 after the quarter four report of a record profit. Algoma withdrew from the joint venture with Stelco primarily because of the significant risk in running two companies of such large size.
Algoma Steel is located at the hub of the Great Lakes in Sault Ste. Marie, Ontario which gives it an excellent range to distribute its steel products to its buyers in Canada and the United States. Algoma Steel is continuing strong operations since emerging from bankruptcy protection and achieved $343.8 million in cash surplus in 2004 alone including a $122.2 million dollar fourth quarter. As a direct result of this surplus money a profit sharing plan has been implemented in which $24 million dollars will be paid out to almost 3000 employees, which averages out to about $7000 per cheque.
The company stated that first quarter of 2005 looks to be promising, with a positive cash flow and continued productivity but lower steel prices will contribute to smaller quarterly earnings than the record 2004 fiscal year.