Less than a year after the first announcement of its closing, Keokuk Steel Castings in Keokuk, IA, has been purchased and preparations are in progress to restart the operations. The Mills Group, a manufacturing holding company owned by Brad and Annie Mills, closed the acquisition of the 300,000-ft2 plant on November 30. They have installed a skeleton team of workers to rehabilitate the electric melting and casting operation, targeting a January 2017 restart.
Brad Mills, an engineer as well as an investor, is drawing on his past success with business “turnarounds” to restore the foundry and install a new business plan.
"This is more than a turnaround. It's a full restart," Mills explained to the Des Moines Register. "This business and foundry is dead, or was dead, completely, and has been idled for a number of months. So that adds to the challenge."
The Mills Group owns and operates four companies in Iowa, all fabricators of equipment used in agricultural processes and livestock handling equipment. The group has not announced the cost of its purchase, though earlier this year the proposed acquisition price was reported to be $3.1 million. The Iowa Economic Development Authority contributed incentives worth $1.63 million, and the City of Keokuk lent $200,000 for the purchase.
Until February of this year Keokuk Steel Castings produced carbon, alloy, and stainless steel parts for oil-and-gas, nuclear, military, mining, rail, and construction equipment markets. The former owner, Matrix Metals LLC, cited declining demand for cast products in oil-and-gas exploration and drilling when it announced the closing in December 2015.
At that time, Keokuk Steel Castings had 192 workers, and the new investors have indicated their intention to restore a comparable level of employment. The Mills Group agreed to restore a comparable level of positions as part of the incentives it received to finance the purchase, but according to local reports it aims eventually to have about 500 workers.
Brad Mills indicated to the Register that the restarted foundry would aim to supply castings to the same types of customers it had served under the former owners: agricultural equipment producers, military contractors, and oil-and-gas exploration parts manufacturers and distributors.