Commercial Metals Company, headquartered in Irving, Texas, announced December 20 plans to construct a steel manufacturing facility, a "micro-mill," in the greater Phoenix, Ariz., area. The micro-mill is a "continuous continuous" design where metal flows uninterrupted from melting to casting to rolling. It is more compact than existing, larger-capacity steel mini-mills, taking advantage of both lower initial capital construction costs and ongoing operating efficiencies by focusing on cost-effective production of a limited product range. It is anticipated that the project will cost approximately $130 million with production anticipated to commence in early 2009, contingent upon the successful completion of site, regulatory, environmental and permitting issues.
The micro-mill, when completed, will be a "focused factory" designed to produce primarily reinforcing bar. It will have an estimated capacity of 280,000 tons per year and will create approximately 110 new jobs for the area.
Russ Rinn, president and CEO of the CMC Steel Group, said, "CMC has worked closely with Danieli to jointly develop an innovative combination of proven technology that will result in a highly efficient, lower-capital and lower-operating-cost facility. The micro-mill will market to a localized, underserved rebar area and is intended to vertically integrate with our expanding downstream fabrication operations in the Pacific Southwest. The greater Phoenix area continues to grow, has an abundant supply of scrap and a solid construction market which will provide good access to locally generated raw material and nearby end-use markets. We are also pleased that our agreement with Danieli contains provisions which provide CMC, as the first industry participant utilizing this innovative concept, the right to replicate the micro-mill in other suitable locations."
Commercial Metals Company president and CEO Murray McClean added, "As we continue the execution of our growth objectives, we constantly evaluate the merits of greenfield opportunities versus the purchase of existing capacity. The current market conditions for acquisitions have convinced us that building this first micro-mill is the most economic method to achieve our objectives."
Commercial Metals Company and subsidiaries manufacture, recycle and market steel and metal products, related materials and services through a network including steel mini-mills, steel fabrication and processing plants, construction-related product warehouses, a copper tube mill, metal recycling facilities and marketing and distribution offices in the United States and in strategic overseas markets.
About the Author
