Standard Steel LLC in Burnham, PA, will be sold to Sumitomo Metals Industries and its parent company Sumitomo Corp. in a $340-million transaction, according to the private equity group that owns the Pennsylvania manufacturer. Sumitomo announced it aims “to become a truly global railway wheel manufacturer with particular strength in the high-grade, high-speed segment. We will continue to help contribute to the global development of railways.”
Established in 1795, Standard Steel is one of the oldest manufacturing operations in the U.S. It is among North America’s largest producers of forged steel wheels and axles for freight railcars, locomotives, and passenger railcars. Trimaran Capital Partners and some of the plant’s management bought Standard Steel in 2006.
“Under Trimaran's leadership, we completed several initiatives, including an expansion of our wheel business, that have enabled us to remain competitive in the railcar components market,” Standard Steel CEO Michael Farrell stated. “We are excited about the opportunities to further grow our business and enhance our relationship with our customers and we look forward to working with our new owners to achieve future success."
In addition to being a primary steelmaker, Sumitomo Metals is one of the world’s largest manufacturers of railway wheels and axles. The Japanese rail sector is its most important market, though it emphasized that growing global demand for railway products will create opportunities for technology transfer and cooperation between Sumitomo Metals and Standard Steel. “The presence of manufacturing bases on both sides of the Pacific will also make Sumitomo Metals more diversified and thus more reliable as a supplier to customers, even in the case of crises,” it said in a statement.
Sumitomo announced that it plans to transfer its Sumitomo Inclined Rotary Dishing (SIRD) process for forging wheels to Standard Steel. Also to be installed is its “ultra clean steel” technology. “The aim of this is to enhance its global competitiveness in the manufacture and sale of railway wheels, including wheels used for locomotives and passenger trains, including high-speed rail. Moreover, both companies aim to enhance their customer services.”
The value of these investments is not known.
Michael Maselli, managing director of Trimaran, stated: "We are pleased to have partnered with Standard Steel's management and employees to support an iconic company as it entered into its next phase of growth. The company is now well-positioned for future expansion and should continue its successful tradition of being a key supplier to one of the country’s oldest industries under its new ownership.”
Sumitomo Buying Standard Steel for $340 Million
Bid to become global supplier of railroad wheels, axles