A BRIEF HISTORY OF ACME METALS INCORPORATED

The Acme story began in 1880, when McMasters & Company of Shelbyville, Missouri, began manufacturing barbed steel staples for the packaging market. In 1884 the Acme Flexible Clasp Company began producing a similar steel staple in Chicago. The two companies merged in 1899, consolidating their operations in Chicago under the Acme name.

Acme grew rapidly during the early years. Unfortunately, the company often found its ambitions frustrated by the quality and availability of steel. Acme's solution was to roll its own steel, and accomplished this by purchasing several small rolling mills.

In 1925, the company became Acme Steel Company, reflecting the growing importance of its flat-rolled strip steel products. In addition, Acme's reputation continued to grow in the packaging market as well. Its steel strapping products established themselves as the market's quality leader through innovations and product improvements.

The austerity of the Depression and the munitions and material requirements of World War II limited Acme's commercial growth, however, after the war the company prospered, thanks to investments and acquisitions in steel, packaging and consumer products.

In 1957, Acme Steel Company began construction of new ironmaking, steelmaking and rolling mill facilities at its plant located in the Chicago suburb of Riverdale. The company's growth continued in 1964, as Acme Steel Company and the Interlake Iron Company merged, combining Interlake's extensive mining, iron, and coke production facilities with Acme's steel producing and finished product capabilities. The new company became the Interlake Steel Corporation, then the nation's 11th largest steel producer.

Following the merger, Interlake continued Acme's strategy of growth in steel and steel products, including steel strapping. The company also broadened its non-steel operations, becoming a leader in aerospace components, material handling, and powder metallurgy.

As Interlake Steel Corporation grew, it became more difficult to manage an organization with two separate personalities--steel and non-steel manufacturing. Following a reorganization of Interlake in 1986, Acme once again became a public company. The newly formed Acme Steel Company consisted of Interlake's former iron, steel, and domestic steel strapping operations.

Almost immediately, the company began growing. A strategy of modernizing existing facilities and acquiring new downstream steel-using operations was designed to improve competitiveness in steel making, and then leverage that competitiveness in steel-using businesses.

Major technological updating of existing facilities resulted in improvements in product quality and the reduction of operating costs. In addition, acquisitions strengthened Acme's existing product lines, such as steel strapping and strapping tools, and broadened the company's opportunities into new markets--auto and light truck jacks, welded steel pipe and tube, and processed steel, to name a few.

Acme Steel Company's growth and diversification were major reasons why, in 1992, shareholders approved creation of Acme Metals Incorporated, a holding company overseeing the operations of Acme's operating subsidiaries. The new structure permits those subsidiaries to focus more closely on their markets and opportunities, making them even more responsive to customer needs. Through its three operating subsidiaries, the company competes in two business segments: steel making (Acme Steel Company) and steel fabricating (Acme Packaging Corporation; Alpha Tube Corporation).

Acme Steel Company is North America's smallest integrated steelmaker and competes in the high quality, narrow hot rolled U.S. steel markets. Customers in these profitable niche markets tend to order small quantities of custom-produced steels in special chemistries and widths. Acme offers a wide variety of steel grades and a full range of in-house processing services to over 400 customers. Larger integrated steel makers have facilities designed for larger markets, while mini-mill competitors can't match the quality inherent in Acme's liquid steel making process. Since 1994, Acme has invested approximately $400 million in a technologically advanced continuous thin slab caster/hot strip mill. First of its kind worldwide, the new MiniGratedTM Steel facility combines state-of-the-art mini-mill casting and rolling technology with Acme's high quality, low cost traditional liquid steel making operations.

Acme's steel fabricating businesses hold solid positions in their respective markets. Acme Packaging Corporation holds approximately 40 percent of the U.S. steel strapping market. Alpha Tube Corporation manufactures mechanical steel tubing and holds approximately 10 percent of the markets in which it competes. These businesses provide a captive market for up to 30 percent of Acme Steel's tonnage, reducing the cyclical impact of steel demand on the company's overall financial performance.