ThyssenKrupp on May 11 announced that it has selected Alabama as the home for its new state-of-the-art steel and stainless steel processing facility. The facility, a cooperative effort between ThyssenKrupp Steel and ThyssenKrupp Stainless, will be located in northern Mobile and southern Washington counties. The decision was approved this morning by ThyssenKrupp AG's Supervisory Board during its meeting in Dusseldorf, Germany.
Initially planned as a $2.9 billion investment, ThyssenKrupp also announced that it will now invest $3.7 billion in this facility. The increased investment primarily results from a rise in both steel and stainless steel capacity, as well as the installation of additional equipment to allow further diversification of the product portfolio.
"Thanks to Governor Riley and everyone who has been part of this project, we are excited to call Alabama home today," said Peter Urban, vice chairman of the ThyssenKrupp Steel Executive Board. "The planned facility in Alabama is a key component of ThyssenKrupp Steel's forward strategy for profitable growth. We are confident that the plant will position us to maximize our competitiveness in the North American market through a combination of cost and technology leadership."
Michael Rademacher, vice chairman and chief financial officer of ThyssenKrupp Stainless, said, "This facility represents the largest investment in the history of ThyssenKrupp Stainless. While our direct entry to the U.S. market is perhaps a bold step, it is also a logical and forward-looking one. The stainless steel market throughout the NAFTA region offers significant potential, and we are now poised to further strengthen our position."
Alabama Governor Bob Riley noted, "With this project, Alabama and ThyssenKrupp are making history. A project this size, with this amount of economic impact, comes along perhaps once in a generation. It is transformational, and we thank our partners at ThyssenKrupp, our state and local economic development team, and Alabama's outstanding workforce for making our success possible."
ThyssenKrupp conducted extensive due diligence and negotiations to select a location for the construction of a new facility in the United States. The process began in February 2006 with 67 potential sites in 20 states. From the initial sites, ThyssenKrupp confined its search to locations in three states: Alabama, Arkansas and Louisiana. In February of this year, the company announced that it narrowed its search to two states, Alabama and Louisiana.
The decision to select Alabama was made based on the criteria the company has been using in the site selection process. Decisive factors included logistical considerations of the company's supply chain from Brazil to our projected customers; operating costs such as electricity and labor; and site-specific capital expenditures.
"This was a very difficult decision. Louisiana made an excellent proposal and has many important and valuable attributes for business development," noted Bob Soulliere, president and chief executive officer of ThyssenKrupp Steel and Stainless USA. "Governor Blanco and her team made a tremendous effort and the professional approach of officials in Louisiana made our decision all the more difficult. We thank the Louisiana team for their hard work, dedication and commitment to the selection process. We recognize this announcement comes as a disappointment to many people in Louisiana, particularly those who worked so hard on this project. But we believe the economic ripple effects of the new plant will benefit the wider regional economy as well."
The new plant complex, which is scheduled to begin operations in 2010, is expected to be one of the largest private industrial development projects in the United States over the next decade. Approximately 29,000 jobs will be generated during the construction phase. When it is fully operational, the plant will employ 2,700 people. Over a 20-year period, the facility is also expected to yield tens of thousands indirect jobs.
Construction is expected to begin by the end of the year. Throughout the process, ThyssenKrupp will post updates on its Web site, www.ThyssenKruppNewUSPlant.com, about employment and vendor opportunities.
The new facility will process carbon steel and stainless steel for high-value applications by manufacturers in the United States and throughout North America. The plant will serve industries including automotive, construction, electrical and utility, in addition to serving manufacturers of appliances, precision machinery and engineered products.
The Alabama facility will include a hot strip mill which will be used primarily to process slabs from the ThyssenKrupp's new steel plant in Brazil. It will also feature cold-rolling and hot-dip coating capacity for high-quality end products of flat carbon steel. The facility will have an annual capacity of 4.1 million metric tons of carbon steel end products. In addition, a stainless steel melt shop will be built with an annual capacity of up to one million metric tons of slabs, which will be also processed on the hot strip mill. A cold rolling facility is to be built, which will be designed initially to produce 350,000 tons of cold strip and 125,000 tons of pickled hot strip. In addition, the stainless plant will provide ThyssenKrupp Mexinox in San Luis Potosi (Mexico) with its required pre-material (340,000 metric tons of hot band).
"We look forward to a long relationship with Alabama," Urban said. "A steel facility of this size and scope will be an integral part of the ThyssenKrupp's overall business operations for decades to come and yield generations of good jobs."
"From employment opportunities to our environmental leadership and responsible social practices, we will demonstrate ThyssenKrupp's commitment to making a positive contribution to northern Mobile and southern Washington counties," Rademacher added.
The ThyssenKrupp Group, based in Dusseldorf, Germany, is a global technology company which consists of five business segments – Steel, Stainless, Technologies, Elevator and Services. The company has annual sales of approximately euro 47 billion (US$61 billion) and employs 188,000 employees in more than 70 countries worldwide.
ThyssenKrupp Steel AG, based in Duisburg, Germany, is the holding company for the carbon steel activities of the group. It is the largest single entity of ThyssenKrupp. Last year, it produced approximately 14 million metric tons of crude steel and generated sales of euro 10.7 billion (US$14 billion). This business segment is focused on high-quality carbon steel flat products and is one of the world's leading producers, ranking second in Europe. The segment employs over 30,000 people. Its subsidiaries are active in processing, coating and steel services. Subsidiaries include Rasselstein GmbH, the world's largest tinplate production site in Andernach, Germany, and Duisburg-based ThyssenKrupp Tailored Blanks GmbH, world market and technology leader in laser-welded blanks for the auto industry.
ThyssenKrupp Stainless AG, also based in Duisburg, Germany, is the holding company for the stainless activities of the Group. It has achieved leading market positions worldwide in stainless steel flat-rolled products, nickel alloys and titanium. With annual sales of euro 6.4 billion (US$8.3 billion), the segment employs 12,200 employees in Germany, Italy, China, Mexico and the U.S.
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