LONDON, April 8 (Reuters) - Italy’s Lecco steel rolling mill, formerly owned by the country’s second-largest steelmaker Lucchini, will restart production in May and will hire nearly 100 staff including former employees currently under redundancy contracts.
Lucchini was previously owned by Russia’s Severstal but was placed under special administration in 2012, battered by stiff competition from Asia and depressed demand following the 2008-2009 financial crisis.
The company sold the Lecco mill in the country’s north to privately-owned steelmakers Duferco and Feralpi late last year, after selling its core steel plant in Piombino on the Tuscan coast to Algerian conglomerate Cevital.
Steel prices ST-CRU-IDX are currently at their lowest level in nearly six years, pressured by over-supply globally and demand that has yet to fully recover from the 2008-9 crisis.
As such, while the restart of the Lecco mill will be welcomed by an Italian government struggling to pull the country out of recession, rival steelmakers will be less pleased.
Duferco and Feralpi said on Wednesday they had formed a new company, Caleotto SpA, to own and operate the Lecco mill, rehire 74 staff who were laid off by Lucchini and employ an extra 10 staff.
The new owners also plan to invest more than 5 million euros ($5.4 million) between now and 2019 in the plant.
Italy’s steel sector is Europe’s second-largest after Germany but has been hard hit by post financial crisis austerity measures imposed on the country.
$1 = 0.9246 euros Reporting by Maytaal Angel; Editing by Silvia Antonioli and Mark Potter