October 27, 2000 Prince of the Citi

Volume 3 | Issue 6

CitiSteel USA produces carbon and high-strength steel plates used in various applications from automobiles to the bridges they roll over.

CitiSteel USA rose from the ashes of Phoenix Steel in 1988, when the China International Trade & Investment Corporation (CITIC) bought the defunct facility at a cost of close to $35 million in cash and debt assumption. The Claymont, Del., facility had been idle for two years, shuttered down after a French company, Cruesot-Loire, let it slip into bankruptcy. To reopen it, CITIC poured nearly $50 million into the mill and the firm turned the corner in just four years, a year ahead of schedule. Today, CitiSteel ships more than 300,000 tons of carbon and high-strength, low-alloy (HSLA) steel plates of various dimensions ranging from 3/8 of an inch to 4 3/4 inches in thickness, from 48 inches to 144 inches wide, in lengths up to 960 inches.

The steel is used in a variety of applications, including bridge and highway construction, automobiles, trailers, railroad cars, ships, storage tanks, mining and agricultural equipment, oil, gas and chemical processing vessels, just to mention a few. About one-half of the carbon steel plates are sold to steel service centers, or distributors, who in turn sell them to various manufacturers that are not large enough to purchase mill quantities. CitiSteel USA offers a unique size and product mix, customized to fill the exact needs of its customers. The company is, by industry standards, small, but it is efficient and capable of responding quickly to specific requests. Where some of the larger mills in the country concentrate on the manufacture of standard sizes – 96 inches by 240 inches – to maximize volume, CitiSteel USA will produce specialty plates of virtually any size within the parameters of the equipment’s minimums and maximums. The company boasts of the distinction of being one of four companies that can make a plate more than 4 inches thick, and one of three producers who can make a plate more than 140 inches wide.

Less Is More

Being small has another advantage: There are very few layers of management. Hence, inquiries, special requests and close customer contact can be handled quickly and efficiently. CitiSteel USA is headed by John Katona, president and chief executive officer. Warren Bieger is vice president and chief financial officer. Greg Buragino is vice president of manufacturing services, and Steve Lundmark is vice president of sales and marketing.

Sales and marketing for the company are handled through five inside sales people based in the Claymont headquarters, and eight outside sales people, plus some independent sales representatives throughout the country. The sales territories are divided into eight sectors east of the Mississippi, and are the bailiwick of the CitiSteel USA sales professionals – Philadelphia, New England, the Southeast, Pittsburgh, Chicago, Virginia, Detroit, Kansas City and Cincinnati. Marketing west of the Mississippi falls largely to the independent reps.

CitiSteel USA serves approximately 350 customers spread throughout North America, but the company concentrates its sales activity in the eastern two-thirds of the United States. A small volume of product is exported.

Success with a Conscience

Environmental consciousness plays a part in every decision made by CitiSteel USA managers. The company recycles more than 400,000 tons of scrap metal annually, helping to keep the solid waste burden at landfills to a minimum while producing a high-quality product. In addition, CitiSteel USA minimizes waste, recycles process water and minimizes air pollution. Social consciousness figures into the CitiSteel USA equation as well. The firm makes significant contributions to local organizations to lend a hand to the needy.

CitiSteel USA also makes a contribution to the local economy. Although the shutdown of the Phoenix operation swelled the unemployment lines, the rebirth of the mill brought some of the jobs back. Many of the steelworkers who were idle after the Phoenix closing, and many of those who didn’t find employment in another company or another industry, were hired by CitiSteel USA. Approximately 400 people work for the company.

Four or five years after start-up, CitiSteel USA made a concerted effort to achieve ISO 9002 certification. Its management felt that although the firm could boast of remarkable success in record time, quality-control procedures needed to be formalized and disciplined in order to achieve maximum efficiency. ISO 9002 requirements were
met, and the firm has its certification.

CitiSteel USA envisions prosperity in the continuation of its niche-market positioning as a small, efficient company dedicated to providing quick and thorough service to its customer base in the production and distribution of high-quality carbon steel plates. It promises its employees the opportunity to grow and prosper as well, and it’s committed to maintaining a responsible posture in the community. All this while maximizing shareholder value. All this after slightly more than a decade of operation. All this after rising from the ashes of the Phoenix.

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