Global Fastener News

Ivaco to End U.S. Manufacturing Operations Under Restructuring Plan

Jason Sandefur

Ivaco Inc. will discontinue its U.S. manufacturing operations and consolidate its Canadian operations under a restructuring program that includes credit protection by the Ontario Superior Court. The Montreal manufacturer of steel and steel products said some of its U.S. entities have also applied for asset protection in Michigan while it undertakes the restructuring.
�These restructuring measures are required to address the recent and dramatic adverse impact on our Company of problems that have affected the North American steel industry as a whole,� stated CEO Paul Ivanier. The plan should help Ivaco�s core businesses emerge as �financially healthy operations,� he continued.

Under the plan, Ivaco will sell non-core assets; renegotiate operating and labor agreements; settle debts related to trade liabilities and legal obligations; and sell or liquidate all of its U.S. manufacturing operations. Ivaco will continue to sell and distribute its products in the U.S. Infasco vice president Mortie Chaikelson said that business continues as usual for Infasco, the Distributor Sales warehouse network, Ingersoll Fasteners and Infasco Nut. “In fact, we have increased production on our 3-shift operation at Infasco and will also increase inventory at our warehouses across North America,” Chaikelson told FIN.
According to the company�s website, Ivaco manufactures fasteners in Swanton, VT, and assembles, packages and stocks fasteners at Vermont Fastener Sales Corp. in Fairfax, VT. In addition, Ivaco has steel facilities in Newnan, GA, Tonawanda, NY, and Troy, MI.

Ivaco named Gordon Silverman, a 31-year company veteran, as its chief restructuring officer. Ivaco also appointed an independent committee of its board to oversee the restructuring.
To provide working capital during the restructuring process, Ivaco has secured as much as $50 million in debtor-in-possession financing from GE Canada Finance Inc.
Ivaco has been hurt by a weak North American economy that saw reductions in demand for its products. The company said increased steel imports from offshore countries have also negatively impacted its revenues and margins. And the recent rise in the value of the Canadian dollar cut Ivaco�s EBITDA by an estimated $60 million on an annualized basis in 2003, the company reports. Ivaco stated production costs increased under new labor contracts at Ivaco Rolling Mills and the Sivaco Quebec division.
Second quarter sales dropped 15.7% to CAD 209.6 million, while earnings for the first half of 2003 fell 76% to CAD 11.8 million. Web: ivaco.com �2003 FastenerNews.com