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Commercial Metals to shutter Rancho Cucamonga steel mill, citing high costs in California

Commercial Metals Co. plans to close its steel mill in Rancho Cucamonga by year’s end, a company official said Friday.

The Irving, Texas-based company initially announced the closure in a March 19 earnings call with investors, although a date for the shutdown of CMC Steel California was not given at the time.

When asked this week, CMC spokeswoman Susan Gerber said the operation, at 12459 Arrow Route, will wind down by Dec. 30. She didn’t say how many layoffs would ensue.

“Such actions are difficult to make as they impact the lives of dedicated employees,” Gerber said via email. “However, this decision was made due to the increasingly high cost of doing business in California and excessive regulatory environment imposed by the state.”

Last year, CMC announced it was laying off at least 100 workers as it stopped buying and processing scrap metal from outside sources. That put an end to its melting operation. It was one of the few remaining plants in California where law enforcement disposed of seized firearms. (File photo by Stan Lim, The Press-Enterprise/SCNG)

That confirmation comes less than a year after the company announced it was laying off at least 100 workers as it stopped buying and processing scrap metal from outside sources. That move put an end to its melting operation — one of the few remaining plants in California where law enforcement disposed of seized firearms.

‘Saddened by the loss’

“We are so saddened by the loss of that company — not only because people won’t have jobs, but because they provided that extra service,” Rancho Cucamonga Councilwoman Lynne Kennedy said. “We have not been in discussions regarding what might happen to that property.”

In discussing CMC’s financial position in the March call with investors, President and CEO Barbara Smith alluded to actions the company had taken that “realigned our portfolio to earn more on each dollar of sales and generate higher returns on each dollar of capital employed.”

“We’ve already captured some optimization benefit through our recent decision to shutter the Rancho Cucamonga melt shop and supply billets from other locations,” she said. “We estimate this action alone will save us over $10 million on an annual basis.”

Billets are square-shaped slabs of softened steel that are heated and shaped to create rebar, the internal metal bracing used to reinforce buildings, bridges and other infrastructure.

Changing hands

The Rancho Cucamonga operation has changed hands twice over the past decade. CMC bought the plant — along with 33 rebar fabrication facilities and six other steel mills — for $600 million from Gerdau, a Brazilian company, in November 2018. Gerdau bought it from TAMCO Steel in 2010 for about $165 million.

CMC posted earnings of $278.3 million for fiscal 2020, up from $198.8 million in the previous fiscal year. The company’s website shows CMC maintains additional operations in Fontana, San Bernardino and Santa Fe Springs.


Source: Orange County Register

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