Insteel to shutter recently-acquired Ohio factory, consolidate ops

The facility, which makes welded wire reinforcements, was part of Insteel’s $70 million acquisition of Engineered Wire Products (EWP) from Liberty Steel last month.

Based in Mt. Airy, North Carolina, Insteel Industries – the parent company of Insteel Wire Products Company – bills itself as the nation’s largest and lowest-cost producer of wire reinforcing products for concrete construction applications.

“I don’t think the closure of the Warren facility will have any real impact on rod supply and the market,” an industry observer said.

A mill source agreed with that sentiment, saying that Insteel “will have sufficient consolidated capacity to produce the same level of material produced by EWP” in addition to what it is producing on its own, leaving the market with no loss of supply to meet its needs.

Insteel said it will consolidate operations from the Warren factory with other facilities that make wire reinforcements.

The company operates ten facilities that manufacture prestressed concrete (PC) strand and welded wire reinforcement, including engineered structural mesh and concrete pipe reinforcement.

The industry observer said the decision was likely prompted by the Warren factory’s low capacity utilization and weak overall market demand for PC strand.

“They likely wanted to be in that upper Ohio area, but having two plants within a couple of hours [of one another] was a bit much. I expect them to move the equipment from Warren to other Insteel locations,” the industry observer said.

“The mesh market has been very slow lately, and Insteel’s PC strand business is pressured by finished imported strand that is being sold into the United States at prices very near wire rod prices,” they added.

“The company has a lot of cash [to make the acquisition], and they must see the EWP group as an investment for better times, and perhaps some more movement and efficiency with the infrastructure spending bills,” the industry observer said.

The industry observer estimated that Insteel buys 400,000 tons of wire rod per year, or 8-10% of the market.

Insteel is “probably the largest single buyer” of wire rod in the US, according to the mill source, and “the largest producer of PC strand.”

“PC strand is drawn from 1080 high carbon rod and gets woven together with a center. It looks like wire rope and is sold in spools,” the mill source explained.

EWP logged $93.3 million in sales for the 12 months ended September 30, according to Insteel.

The company stated it will incur a $1.9 million restructuring charge for the Warren factory shutdown.