Federal Economic Development Agency for Southern Ontario

Federal Economic Development Agency for Southern Ontario
Government of Ontario

Government of Ontario

July 24, 2015 11:23 ET

Governments of Canada and Ontario Invest in Innovation at Essar Steel Algoma Inc.

SAULT STE. MARIE, ONTARIO--(Marketwired - July 24, 2015) - Essar Steel Algoma Inc. will benefit from up to $60 million from the governments of Canada and Ontario to strengthen its global competitiveness by supporting technological and product innovation at its integrated steel mill in Sault Ste. Marie.

The funding, announced today by federal and provincial officials, will enable Essar Steel Algoma Inc. to adopt world-class technologies that will improve its production processes, and increase the range and quality of its steel sheet and steel plate products. This includes improving the company's signature technology at its Direct Strip Production Complex, the only facility in Canada that converts liquid steel directly into steel coils.

These activities are part of a more than $240-million project being undertaken by the company. The project, anticipated to be completed by 2022, will ultimately lead to the development of transformative, unique-in-Canada products, while providing high-quality jobs at the steelmaker's facilities in Sault Ste. Marie and throughout its supply chain.

The Government of Canada's investment, supporting activities through 2018, is being delivered by the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) through the Advanced Manufacturing Fund (AMF). The Government of Ontario's investment is being delivered by the Ministry of Northern Development and Mines through the Northern Ontario Heritage Fund Corporation (NOHC).

Quick Facts

  • In 2014, Ontario primary steel shipments were valued at approximately $10.4 billion, with an additional $2.5 billion in steel product shipments.
  • Ontario's steel industry directly employs more than 16,000 people and indirectly employs nearly 50,000 people in the province.
  • Essar Steel Algoma Inc., the second largest of 17 Canadian steel operations, spends $120 million in support of 670 local suppliers and contributes $1.2 billion to Canada's GDP every year.
  • By 2018, Essar Steel Algoma Inc. expects to increase the casting speed of its Direct Strip Production Complex (DSPC) by approximately 30 percent to increase DSPC output to three million short tons of steel a year.
  • Essar Steel Algoma Inc. anticipates that the project will create more than 200 jobs, while also supporting the maintenance of approximately 2,500 direct jobs and more than 5,000 indirect jobs.

Quotes

"Since its foundation, Essar Steel Algoma Inc. has been an economic driver for Sault Ste. Marie and northern Ontario. Our Government is pleased to support a company that is committed to investing in its future, in the future of this community and this region."

- The Honourable Gary Goodyear, Minister of State for FedDev Ontario

"Our Government is committed to ensuring Ontario's steel sector remains competitive in today's challenging global market. We recognize Essar is a significant contributor to Northern Ontario's economy, and a major private sector employer in steel manufacturing. This $30-million investment is proof of our continued support the northern economy, including the steel industry in the North."

- The Honourable Michael Gravelle, Ontario Minister of Northern Development and Mines

"Our Government is proud to announce up to $30 million for Essar Steel Algoma Inc. for technological and product innovation at the company. As the number one employer in the area, supporting Essar Steel is also an investment in job creation and economic growth in Sault Ste. Marie."

- Bryan Hayes, Member of Parliament for Sault Ste. Marie

"I am extremely pleased to announce that after many months of work, we are providing the largest grant in decades from any level of government in the amount of $30 million to strengthen our city's largest employer and support a $240 million capital modernization plan that will create more than 200 new jobs and serve to protect more than 2,500 direct jobs and more than 5,000 indirect jobs. This massive investment will help to ensure Essar Steel Algoma remains competitive for years to come, while building industry leading capacities to produce a broader range of products as well as allowing for the increase in total steel output."

- David Orazietti, Member of Provincial Parliament for Sault Ste. Marie

"This investment makes it possible for Essar Steel Algoma to expand our product offering and satisfy emerging market opportunities, improving our productivity, making us more competitive and ultimately more sustainable. That will ensure we have a long-term future in Sault Ste. Marie, producing advanced steel and maintaining vital jobs that make our community stronger."

- Kalyan Ghosh, CEO, Essar Steel Algoma Inc.

Related Products

Backgrounder: Investment in Innovation at Essar Steel Algoma Inc.

Associated Links

Essar Steel Algoma Inc.

Federal Economic Development Agency for Southern Ontario

Ministry of Northern Development and Mines

Growth Plan for Northern Ontario

Backgrounder

July 24, 2015

Investment in Innovation at Essar Steel Algoma Inc.

The governments of Canada and Ontario are providing contributions of up to $30 million each to support a technology adaption and implementation project at Essar Steel Algoma Inc. in Northern Ontario.

Funding will be used for the initiatives outlined below:

  • Upgrades in the state-of-the-art Direct Strip Production Complex, which will result in improved product quality, higher-value steel grades and increased processing speed;
  • Adoption of enhanced automation technology in the Plate and Strip Hot Mill Complex, which will improve overall productivity and reliability and reduce energy consumption;
  • Installation of a new steel refining station, which will enable research, development and production of high-value advanced steel grades.

These changes will allow the company to produce a wider range of steel grades, increase steel quality, and increase production levels to meet Canadian demand, which is largely dependent on imports.

Overall, Essar Steel Algoma Inc. is investing more than $240 million in a Plant Modernization and Expansion Project to modernize its steel making facility through innovative equipment and processes. These activities will raise plant efficiency to the highest industry standard, allowing the company to compete both on cost and quality of product on a global scale. Improving plant efficiencies will also reduce its carbon footprint.

The Government of Canada's $30-million repayable contribution, through the Advanced Manufacturing Fund (AMF), is the first AMF investment in Northern Ontario. AMF is delivered province-wide by the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) with an allocation of $200 million over five years. The Fund was launched to support manufacturers as they work to increase competitiveness, invest in innovation and boost productivity across Ontario.

The Ontario government is investing $30 million towards the project through the Northern Ontario Heritage Fund Corporation (NOHFC). The investment supports long-term sustainability and will help to ensure Essar Steel Algoma Inc. continues to support job growth with more than 200 new and good paying jobs, and a stronger economy for Sault Ste. Marie. Investing in business expansion and job creation in the North is part of the Government of Ontario's Growth Plan for Northern Ontario.

About Essar Steel Algoma Inc.

Essar Steel Algoma Inc. is based in Sault Ste. Marie, Ontario. As a fully integrated steel producer, the company derives its revenues primarily from the manufacture and sale of hot and cold rolled steel products including sheet and plate.

Founded in 1901 as Algoma Steel, the company was acquired in June 2007 by Essar Steel Holdings Limited. Its products are sold to customers in the automotive, light manufacturing, construction, shipbuilding, energy, mining and steel distribution industries.

Related Products

News Release: Governments of Canada and Ontario Invest in Innovation at Essar Steel Algoma Inc.

Contact Information

  • Erica Furtado
    Director of Communications
    Office of the Honourable Gary Goodyear
    613-943-7599

    Eric Bianchini
    Senior Communications Advisor
    Office of the Honourable Michael Gravelle
    416-327-2394

    Media Relations
    FedDev Ontario
    416-954-6652
    FDO.Media-Medias.FDO@feddevontario.gc.ca

    Julia Bennett
    Media Relations, Communications Branch
    Ministry of Northern Development and Mines
    416-314-6275
    Julia.bennett@ontario.ca