Indianapolis Coke Closing Due to Declining Market and Foreign Competition
Utility Focused on Helping Employees Find New Jobs

INDIANAPOLIS – Citizens Gas & Coke Utility announced today that it intends to close its Indianapolis Coke Manufacturing Division due to a declining U.S. market and increasing foreign competition. The decision to close the plant comes after the company was unable to sell the facility after 11 months on the market.

Citizens Gas executives announced the closing to the plant’s 300 employees earlier today in meetings at the plant, which is located at 2950 Prospect Street. The plant will be shut down gradually over the next several months and employment levels may be reduced as the process is completed.

Steep declines in the U.S. steel and auto industries over the past decade have resulted in greatly reduced demand for domestically-produced coke, a fuel made from coal that is used by steel mills and foundries. Meanwhile, low-cost foreign steel and coke producers have thrived amidst steady growth in foreign auto and truck production.

“This is a very sad day for all of us at Citizens Gas & Coke Utility,” said Carey Lykins, President and CEO of Citizens Gas & Coke Utility. “The decision to close Indianapolis Coke was an extremely difficult one because of the impact the plant closing will have on the plant’s employees and their families. Indianapolis Coke has been part of the utility for nearly 100 years and has provided many benefits to the citizens of Marion County. Unfortunately, the plant can no longer compete in a world coke market greatly impacted by foreign steel and coke producers, who pay very low wages while not having to meet the stringent environmental standards we face.”

Indianapolis Coke’s difficulty competing in the marketplace has produced substantial financial losses in recent years, including losing about $17.6 million in 2006. Citizens Gas had been working with an investment banker for the past 11 months in an effort to sell the facility to a buyer that would continue operating the plant. The utility received interest from approximately 20 entities and had been negotiating with one prospective buyer for more than five months. Unfortunately, the utility was unable to reach an agreement to sell the facility.

Citizens Gas is now focused on helping employees transition to new careers. Employees will receive severance pay and paid health insurance. More information about severance and other benefits will be provided after talks with IBEW Local 1400. Various outplacement services, such as resume assistance, will be provided in cooperation with the Indiana Department of Workforce Development. The utility has already offered 41 employees age 50 or older an early retirement incentive package.

“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,” Lykins said.

The exact future use of the 120-acre plant site has not been determined. “Citizens Gas looks forward to working with community groups and all appropriate agencies to refurbish the plant site and then determine its future use,” Lykins said.

Built in 1908 to produce gas for the Indianapolis area, Indianapolis Coke now manufactures coke, a substance made by baking coal at 1,800 degrees for more than 24 hours. The coke plant was the primary source of gas for Indianapolis until interstate pipelines began delivering natural gas to the area in the 1950s.

About Citizens Gas
Citizens Gas & Coke Utility is a Public Charitable Trust providing efficient and reliable energy services to more than 266,000 customers in and around Marion County. The Public Charitable Trust means the utility is managed only for the benefit of customers and the community.

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