EMPIRE Industries is continuing its shift out of fabricated steel and into engineered products after selling its historic Winnipeg base of operations, Empire Iron Works, earlier this month.
Edmonton-based Supreme Group, the largest privately owned steel fabricator in Western Canada, bought Empire Iron Works and will continue to employ all 70 people at the Jarvis Avenue plant.
Guy Nelson, CEO of Empire Industries Ltd., said the company will continue to maintain its corporate head office in Winnipeg as well as its specialty metals fabrication shop, Parr Metal Fabricators. Empire also has plants in B.C. and Alberta, a joint venture in China and a joint-venture machine shop and steel service operation in Fort McMurray, Alta.
In addition to Empire Iron, the company also sold its Hopkins Steel Works facility in Welland, Ont., to the Supreme Group for a total of $3.8 million.
"It's always a question as to where to put your resources," Nelson said. "As a relatively small fabricator in Western Canada, with the past recession and the continued expectations of a high Canadian dollar going forward, we did not have the winning hand (in the fabricated steel business)."
Supreme, on the other hand, might have such a hand. Supreme's owner, John Leder, who grew up in Transcona and started his Edmonton-based business in the 1970s, said he is very familiar with Empire Iron Works.
"They had been doing work for us for some time," Leder said. "But it really was not big enough to be able to bid on larger projects. We think we can do better with the facility than Empire has in the past."
Supreme has plants in the three western provinces already. Leder said the premise for acquiring Empire Iron Works was to increase the company's capacity in Western Canada, a market he believes will continue to grow.
He said owning a Winnipeg production facility isn't just about keeping Manitoba jobs. He said it also means it will be easier for the company to enhance its presence in this market and maybe give it a better chance of winning work here.
The competition is fierce. Nelson said one of the reasons his company backed away from the market is because he believes industry capacity outstrips demand.
His deal to sell his plants to Supreme was negotiated during the past year at the same time Quebec-based ADF Group had been in talks about making a major investment in Manitoba.
Last year, ADF negotiated a $10-million loan from the province through its Manitoba Industrial Opportunities Program and had plans to build a 100,000-square-foot plant on the old Dominion Bridge site.
But an official with the province said the loan application has been withdrawn, and in its third-quarter results issued last month, ADF said it is postponing the project after negotiating for 18 months to purchase the property.
However, the company has entered a joint venture with another Winnipeg company called Capitol Steel.
Officials from ADF and Capitol Steel were unavailable Monday.