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Russel Metals Inc. plans to consolidate its Ontario operations, closing a plant in the Niagara region and shrinking its work force by 40 people.

The Toronto-based metals distributor said Monday it will combine its structural steel operations at its existing plant in the southwestern Ontario city of Cambridge.

The resulting closing of its Port Robinson plant will affect 80 employees, but the steel company plans to hire 40 employees in a $6-million expansion of the Cambridge plant.

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"The decision to close a location is never easy as it impacts long-service employees," said president and chief executive officer Brian Hedges.

"We are pleased to be able to expand in Cambridge and create 40 jobs at this location. The expansion at the Cambridge branch allows us to fulfill our commitment to provide better service to our customers and rationalize, as needed, our operations in Ontario."

Russel Metals said the restructuring will make it more competitive by cutting its operating costs.

Russel Metals is one of the largest metals distribution companies in North America and operates under a variety of brands. The company runs metals service centres, steel distribution outlets and sells and processes pipe, valves and tubing for use in the oil and gas industry.

The company employed nearly 2,700 people at the end of 2008 and generated revenues of nearly $3.37-billion in that year.

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