Indianapolis Coke Set to Close

Merchant supplier cites offshore competition

April 16, 2007 — Citizens Gas & Coke Utility has announced it will close its Indianapolis Coke Manufacturing Division, citing declining U.S. demand for metallurgical coke and increasing foreign competition. The public utility had been offering the plant for sale for the past 11 months.

Coke is a fuel made by extracting carbon from coal, using heat and compression, and is used by steel mills and foundries to refine iron ore.

"Steep declines in the U.S. steel and auto industries over the past decade have resulted in greatly reduced demand for domestically-produced coke," Citizens Gas & Coke stated. The rising competitiveness of foreign steel and coke producers is a parallel development to the expansion of offshore automotive and truck manufacturing, according to Citizens.

Indianapolis Coke was established in 1908 to produce gas for the Indianapolis area, with metallurgical coke as a byproduct. The region has been served by interstate gas pipelines for many decades. The merchant coke operation recorded losses totaling $17.6 million in 2006.

About 300 employees will be affected as the plant is phased out of operation over the coming months. Employees were notified of the closing in February, and Citizens Gas is offering a severance package and paid health insurance, as well as outplacement services. Workers above the age of 50 have been offered early-retirement packages.

“Citizens Gas is strongly committed to helping Indianapolis Coke employees find new jobs and will provide a full range of outplacement services to make the employees’ transition to new careers as smooth as possible,” stated president and CEO Carey Lykins.

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