Company News, 2006-11-13, 03:37 PM
Statement on Dofasco
On January 26, 2006, ThyssenKrupp AG concluded an agreement with Mittal Steel Company N.V. under which Mittal Steel undertook to sell the Canadian steel producer Dofasco to ThyssenKrupp at a price of CAD68 per share in the event that Mittal Steel acquired Arcelor.
Despite board resolutions by Mittal Steel Company N.V. and Arcelor S.A. requesting the directors of foundation to dissolve the foundation, last Friday the foundation's board of directors decided against dissolution. Arcelor Mittal is reviewing the consequences of this, as the dissolution of the foundation is a prerequisite for the sale of Dofasco.
ThyssenKrupp will exhaust every possibility to bring about the sale of Dofasco to ThyssenKrupp, as bindingly agreed by Mittal Steel.
ThyssenKrupp has previously announced that it is planning to build a new steel mill in the USA should an acquisition of Dofasco prove impossible. This greenfield project by ThyssenKrupp Steel AG and ThyssenKrupp Stainless AG will significantly strengthen the position of both companies in the North America region. 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.
In its meeting on August 11, 2006 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.