Saturday, August 12, 2006

ThyssenKrupp to Build New Steel Plant

As part of their forward strategies for profitable growth, ThyssenKrupp Steel AG and ThyssenKrupp Stainless AG plan to jointly build a new plant in the USA. This greenfield project is intended to significantly strengthen their position in North America. The NAFTA market is one of the biggest volume markets for high-grade flat carbon steel. Above-average growth is forecast in the coming years for stainless steel flat products.

At its meeting today, the Supervisory Board of ThyssenKrupp AG approved a project development budget of US$50 million, to be used to commission consultancy and engineering services, prepare the choice of site and purchase the real estate.

Central to the plans for the greenfield project is the construction of a hot strip mill which will be used primarily to process slabs from the new CSA steel mill in Brazil. The new plant will also feature cold rolling and hot-dip coating capacities for high-quality end products of flat carbon steel. ThyssenKrupp Steel’s investment in the plant, which will have an annual capacity of 4.5 million metric tons of end products, is estimated at EUR1.8 billion.

In addition, ThyssenKrupp Stainless plans to build a melt shop with an annual capacity of up to 1 million metric tons of slabs, which will be processed on the hot strip mill. A cold rolling facility is also to be erected which, in the first phase, will be designed to produce 325,000 tons of cold strip and 100,000 tons of pickled hot strip. Furthermore, ThyssenKrupp Mexinox will be supplied with hot strip from the USA as starting material. The volume of investment by Stainless is expected to be EUR500 million.

The ideal site is being sought for this joint plant complex. Three potential locations have now been identified in the southeastern states of Alabama, Arkansas and Louisiana.

In the next few days, the Executive Board will continue negotiations on the acquisition of the Canadian steel producer Dofasco. In January 2006, ThyssenKrupp signed an agreement with Mittal Steel Company N.V. under which Mittal Steel undertook to sell Dofasco to ThyssenKrupp AG in the even of a takeover of Arcelor.

Source AZOM

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