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Capital market-relevant press releases, 2007-02-07, 03:45 PM

ThyssenKrupp concentrates site search for new US steel mill on Alabama and Louisiana

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 at a cost of €2.3 billion. After extensive preliminary investigations, the site selection process is now being concentrated on the states of Alabama and Louisiana. Arkansas was also under investigation as a possible location but proved less suitable. Despite several positive factors, geological conditions, energy costs and logistical disadvantages were the main reasons behind the decision to exclude Arkansas.

This greenfield project is intended to significantly strengthen ThyssenKrupp’s position in North America. The Nafta market is one of the biggest volume markets for high-grade flat carbon steel, and ThyssenKrupp Steel will be able to leverage the strengths of its range of high-quality products. ThyssenKrupp Stainless is already an established producer on the Nafta market with its cold rolling mill in Mexico and sales/distribution bases in the USA. In the coming years, the new plant will serve the fast-growing US market, while Mexinox will concentrate more on its domestic Mexican market.

The central element of the new plant will be a hot strip mill which will be used primarily to process slabs from the new ThyssenKrupp CSA steel mill in Brazil. In addition there will be 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 €1.8 billion.

In addition, ThyssenKrupp Stainless plans to build a plant to manufacture stainless steel flat products. A melt shop will turn out up to 1 million metric tons of slabs per year which will be rolled 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. Around 340,000 tons of the stainless hot strip produced on the hot strip mill will be used to supply the ThyssenKrupp Mexinox cold rolling facility in San Luis Potosi (Mexico). The volume of investment by ThyssenKrupp Stainless is expected to be €500 million.

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