February 9, 2005 Bouchard’s Steel Empire
February 9, 2005, Post-Tribune, By Lisa Shidler, Post-Tribune Staff Writer
Jim Bouchard wants to build an empire on steel coils.
Bouchard, a former U.S. Steel executive, is following the pattern of turnaround specialist Wilbur Ross by grabbing bankrupt or distressed companies in the Midwest and turning them around for a healthy profit.
Bouchard’s ventures are smaller, including an East Chicago plant with 24 employees. But his goals are large — he hopes to create one of the nation’s largest steel companies featuring steel coating and steel service centers.
Bouchard is co-chairman and CEO of Esmark, which is a holding company with seven independently operating subsidiaries. He first began buying troubled companies when the steel industry was in peril.
“The steel industry was at its lowest point,” Bouchard said. “Everyone else was going bankrupt and we fought through the grim days. We didn’t start when the steel market was hot. It was ugly.”
Now, the steel market is different. Esmark’s sales are about $420 million annually and it employs 420 people with seven operations.
Bouchard wants Esmark to ultimately generate $1 billion in revenues annually and says the company is poised to become one of the nation’s largest steel companies.
His East Chicago operation, which he named Electric Coating Technologies, had passed through three other owners and been dormant for eight months when he brought it back on line and pulled it out of debt and into a profitable venture.
The 154,000-square-foot facility has the capacity to produce up to 180,000 tons of coated steel annually.
When ECT first opened under Bouchard’s leadership in 2002 it had $5 million in annual revenues and now the company generates about $30 million annually.
Bouchard is seriously considering taking Esmark public and has begun talking to investors.
He’s eying up to eight different acquisitions for later this year and says the service center side of steel desperately needs to consolidate. He expects to announce three more acquisitions in the first quarter alone.
Steel analyst Charles Bradford said he recently heard Bouchard speak at a steel importers dinner in New York . “What he said made a lot of sense,” Bradford said. “He did all of the right things. I have no idea what their financials look like and how well they’re integrated.”
ECT buys steel coils from U.S. Steel, International Steel Group and Mittal Steel’s Ispat Inland plant. The company coats the cold-rolled steel with zinc, which makes the metal less susceptible to corrosion and easier to process for orders.
Bouchard would not name specific customers because of the competitive nature of the industry, but said they are not in the automotive business.
It was Bouchard’s vision that began the company, along with his brother Craig, but he credits the workers at the East Chicago company.
“It’s about these guys,” Bouchard said about the 24 employees at the East Chicago company. “It’s really a unique company.”
Many of these employees have witnessed three other owners and were laid off for several months.
In fact one employee, Gil Peral, of East Chicago , says he was able to become a first-time homeowner because of the new ownership, which offers generous quarterly profit sharing checks. He had lost his job during previous ownerships.
“This by far has been one of the best owners,” Peral said. “We’re very well taken care of. We really feel like we have job security. We have never felt like that before.”
Thomas A. Modrowski, who is also a former U.S. Steel executive and now president of Electric Coating Technologies, said he’s proud of those workers.
“These guys have been through rough times,” Modrowski said. “We’ve tried to create an environment so they can influence their own destiny.”
Reporter Lisa Shidler
can be reached at 648-3076 or by e-mail at firstname.lastname@example.org.