Grupo Simec Idles Republic Steel Mills and Shifts Production to Mexico
Grupo Simec, which acquiredย Republic Steelย in 2005, plans to indefinitely idle steelmaking operations at Republicโs mills in Canton, Ohio, and Lackawanna, New York. The company will shift that production to its newer, state-of-the-art plant in Tlaxcala, Mexico.
Operations Move to Tlaxcala and Job Losses
Grupo Simec will halt steelmaking at the two U.S. mills and consolidate output at the Tlaxcala facility. As a result, approximately 500 employees will face indefinite furloughs, including 322 positions in Canton and 178 in Lackawanna. During the transition, U.S. customers will receive SBQ and leaded steel products from the Mexican plant without a service interruption, the company said.
Market Challenges and Cost Pressures
Republic Steel board member and executive advisorย James (Jaime) Vigilย said the company evaluated every alternative before deciding to idle the U.S. operations. He cited an extremely challengingย special bar quality (SBQ) steelย market in the U.S., marked by aggressive pricing, softer demand, and sharply higher costs for raw materials, consumables, and labor in an inflationary environment.
Vigil noted that management hoped for stronger demand after the federal Infrastructure Investment and Jobs Act and the Inflation Reduction Act, but those tailwinds never materialized at the levels needed to sustain the two older mills.โ
Environmental Compliance and Aging Facilities
Vigil also pointed to tightening environmental rules as a key issue for the Canton and Lackawanna plants, both of which rely on older infrastructure. Republic Steel invested roughly $10 million in the 125-year-old Canton facility to comply with the National Ambient Air Quality Standard for leaded steel production, yet future compliance would likely require even more extensive upgrades.
Grupo Simec said consolidating production in Tlaxcala will support more competitive pricing, improved environmental performance, and higher product quality for SBQ and leaded steel. Republic Steel remains the only producer of leaded steel in North America, and Vigil stressed the companyโs responsibility to remain a reliable supplier to customers while meeting its obligations to shareholders.
Ongoing Role Within Grupo Simec
Republic Steel operates as a subsidiary of Grupo Simec, which in turn is majority-owned byย Industrias CH, S.A.B. de C.V. (ICH), a major Mexican steel producer based in Mexico City. Simec ranks among North Americaโs largest SBQ producers and is also a leading supplier of commercial and structural long products in Mexico.
