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Hamilton Economic Development

Empire Steel is empire-building in Hamilton

Empire Steel president Sherif Khalifa, left, and his father Awada have high hopes for the former Siemens plant. Empire Steel has taken up residence in the idled Siemens turbine plant in Hamilton and plans to build its own empire there.

The steel service company may not be a household name around here but its roots date back three generations to Egypt and it has about 20 years of history as a customer at ArcelorMittal Dofasco.

Empire Steel sells flat-rolled steel coils to automotive, construction and appliance sectors in Africa and Europe. It has moved its inventory into about 150,000 square feet of the Milton Avenue plant that has been empty since Siemens Canada closed its gas turbine factory in July 2011 and moved the operation to North Carolina.

Company president Sherif Khalifa says he has lured at least three other companies to the Hamilton site, all from outside the city and including one coming from the U.S. Midwest. The goal is to manufacture auto parts and other components on site, rather than simply ship away the raw steel.

“We’ve struck a deal with a fabricator and manufacturer and a couple of others but I can’t talk to many details,” said Khalifa. He says that the sagging fortunes of the steel industry make it necessary to bring several players under one roof.

“I don’t think a lot of people are courageous enough to take over a 620,000-square-foot building in this economy unless they are convinced good things will happen.”

Construction crews are creating doors and entrances and installing new lighting and heating systems, but much of Empire’s inventory is already on site. There are also large steel presses covered with plastic tarps, awaiting installation.

Khalifa, 40, says the sprawling plant, portions of which date back more than a century, was in perfect condition when he took possession Jan. 1. He and Siemens worked for 18 months on a deal. Now, he spends more time there than at his Markham home. He jokes the building is like his fourth child.

“I get mesmerized here. This building, for its age, it’s impeccable. It’s very solid. Some of the beams in here are strong enough to hold a bridge.”

He says this as a 250-tonne overhead crane plucks a 35-tonne coil of steel off the floor and into the air as if it were a spool of thread. The cranes here are the biggest in Canada.

Khalifa’s deal with Siemens also includes a former office building across the street at 30 Milton. He says it’s perfect for government use.

Khalifa’s father, Awad, was getting set to retire but has personally invested in the new venture and will stay active in the company. He says his dad’s wisdom and his youth are fuelling Empire’s new direction.

And the former Siemens plant was the ideal place to launch it, thanks to the cranes, 65-foot ceilings and a rail line that comes into the building. Khalifa says a study has been completed into building a rail link between the building and the Hamilton port.

“This is the building of all buildings … There are lots of opportunities in this building.”

He expects to see the place fully operational and employing at least 150 people sometime this year.

“Everything that comes up fast, falls fast. We are very careful. We have to do it right.”

Neil Everson, the city’s manager of economic development, said he was aware Empire Steel was interested in the Siemens site, the Barton Street and Sanford Avenue area, and the city is always happy to see a new use for an idled industrial plant.

Khalifa acknowledges that Siemens took a lot of heat in Hamilton for closing its operation. But he says the company, which bases its Canadian headquarters in Burlington, cares about Hamilton and carefully studied his business plan.

“They were very adamant about having the right person for Hamilton. They are a worthy company and this is a state of the art building.”

Siemens bought the plant from Westinghouse in 1997 as part of a $1.53-billion deal. That ended Westinghouse’s 111-year history in Hamilton.

Siemens once employed 550 at the Milton Avenue plant but shifted its operation to Charlotte, N.C., saying the gas turbine market was shrinking in Ontario. The city and state also offered $157 million in incentives to sweeten the deal.

Hamilton and Queen’s Park officials, along with labour groups, vigorously fought the move.

Then there were high hopes a wind turbine plant would come to the Hamilton property but Siemens located the plant in Tillsonburg instead.

Article courtesy of Meredith MacLeod, The Hamilton Spectator.

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