Undeterred by depressed steel market, German company continues $4 billion North American investment
By Peter A. Buxbaum, AJOTShipments of breakbulk steel by U.S. steel mills have plummeted since the global recession hit the industry in the fourth quarter of 2008. In late 2009, projections showed that United States steel consumption would be dropping 43 percent on the year, that deliveries to many categories of steel consumers, from distributors to construction contractors to oil and gas companies, were down by over 50 percent in 2009, and that the domestic steel industry was operating at 49 percent of capacity.
But all of that did not deter ThyssenKrupp Steel USA from proceeding with a project that will sink $4.65 billion into a new state-of-the-art steel and stainless steel processing facility in Calvert, Alabama. The ThyssenKrupp site, which includes 7 million square feet of building on 3,500 acres of land, will have the capacity to produce annually 4.1 million metric tons of carbon steel products for customers in the automotive, construction, pipe and tube, service center, and appliance industries. The facilities are slated to become operational later this year.
When completed, the project will include a river terminal on the Tombigbee River, a rail terminal, a hot strip mill, cold rolling mill and four hot dip coating lines. Raw steel will be shipped for processing from ThyssenKrupp CSA, ThyssenKrupp’s new manufacturing facility in Brazil. The Brazilian facility, which began production in 2009, has the capacity to produce five million metric tons of slabs per year.
ThyssenKrupp’s strategy is to focus less on the current state of affairs than on the future potential for the facility. “The new facility will help meet the future demand for high quality value-added flat carbon steel products in the NAFTA market, particularly the southeast U.S. and Mexico,” said Ulrich Albrecht-Frueh, president of ThyssenKrupp Stainless USA. “When operational, we will concentrate on flat steel products that have strong growth potential. We intend to be a major player in these markets for high-value and value-added flat carbon steel. We are working to ensure steel continues to shape technical progress in NAFTA, and particularly in the United States, through the 21st century.”
ThyssenKrupp’s timing may prove to be fortuitous. For the last several months, the American Iron and Steel Institute have been reporting increases in U.S. steel mill shipments. In October 2009, U.S. steel mills shipped 6,097,000 tons, a 5.3 percent increase over September. September’s total of 5,793,000 tons represented a 3.9 percent increase over August, while August’s 5,570,000 tons beat July 2009 by a 5.7 percent margin. All of these figures, however, still represent significant monthly decreases when compared to the same periods in 2008.
ThyssenKrupp is no stranger to doing business in the United States. Through predecessor companies, ThyssenKrupp has been part of the U.S. business landscape for 170 years, dating back to 1837 when Alfred Krupp, founder of predecessor company Krupp, provided coin minting machine prototypes to the U.S. ThyssenKrupp operates in all 50 states, with 400 locations, 25,000 employees, and nearly $10 billion in annual sales.
The ThyssenKrupp Group, based in Düsseldorf, Germany, is a global technology company which consists of five business segments: steel, stainless, technologies, elevator and services. The company employs over 190,000 employees in 70 countries and has annual sales of over $64 billion. ThyssenKrupp Steel, based in Duisburg, Germany, is the holding company for the carbon steel activities of the group and is its largest single entity. ThyssenKrupp Stainless is the holding company of the stainless segment. Based in Duisburg, Germany, it brings together all of ThyssenKrupp’s activities in the areas of stainless steel flat-rolled products, nickel alloys, and titanium.
“The central element of ThyssenKrupp’s new plant will be a hot strip mill with a capacity of u