Lecco Metallurgical Plant in Italy relaunches production

Lecco's steel mill, formerly owned by Italy's second largest steelmaker Lucchini, is due to resume production in May and plans to hire nearly 100 employees, including former workers.

Lucchini was formerly owned by the Russian Severstal, but was taken under special control by the administration in 2012, as the company was hit hard by fierce competition from metal products from Asia and weak demand after the financial crisis of 2008-2009.

The company then sold the Lecco plant, located in the north of the country, to the private steel company Duferco and Feralpi late last year, after selling its main steel mill in Piombino on the Tuscan coast to the Algerian conglomerate Cevital.

Steel prices, under pressure from oversupply, continue to be at their lowest in nearly six years. So while the restart of the Lecco plant will be welcomed by the Italian government, which is struggling to pull the country out of the recession, rival steelmakers will be less pleased.

Duferco and Feralpi said they have formed a new company, Caleotto, which will own and operate the Lecco plant, and hire employees who were laid off by Lucchini, as well as employ additional employees. The new owners also plan to invest over € 5 million ($ 5.4 million) in the plant through 2019.

Italy's steel sector, which is Europe's second largest after Germany, has been hit hard by the post-financial crisis austerity measures imposed in the country.