Russian Parent Adopts
Correnti’s Baby: SeverCorr
Management of SeverCorr in Columbus, Miss., has changed under a plan by its majority owners in Russia to consolidate the new steel mill as a SeverStal company and buy out the ownership interests of founder and CEO John Correnti and up to six other senior managers.
SeverStal, the Moscow-based steel and mining giant, owned about 75 percent of SeverCorr before deciding to exercise its option to buy out the remaining shares.
SeverStal has appointed a new senior management team at SeverCorr, led by new Chief Executive Officer James Hrusovsky. The former chief operating officer of SeverStal North America Inc., the company’s other U.S. business, Hrusovsky has over 26 years of industry experience in both strategic and operational roles, and will relocate to Mississippi.
Sergei Kuznetsov, chief financial officer of SNA, has been named the new CFO of SeverCorr. He will have financial management and reporting responsibilities for both SeverCorr and SNA and will remain based in Dearborn, Mich.
“John Correnti and his team have been tremendous partners and we wish them the very best in the future,” says SeverStal CEO Alexey Mordashov. “In a relatively short period, they built from scratch one of the most technologically advanced mills in the steel industry, strategically located to serve the fast-growing southern region of the U.S. SeverStal remains committed to John’s vision and to SeverCorr’s employees, customers, partners and the Golden Triangle region and state of Mississippi.”
Company officials do not expect the transition of the executive management team and anticipated change of ownership to affect SeverCorr’s operations or distribution. Other senior operational managers will remain in place.
SeverCorr will continue its successful production ramp-up, they add, and the Phase II expansion, which will more than double the mill’s output to three million metric tons, is on track to be completed by late 2010.
“We’re proud of what we’ve accomplished at SeverCorr, and I want to thank everyone who has helped make it possible,” says Correnti. “As SeverCorr moves from an entrepreneurial venture into an operating steel mill, it made sense for me and other founding senior managers to transition executive management responsibilities. SeverStal was a valuable partner in getting this mill to where it is today.”
SeverCorr is an unusual mill in that it produces high-quality steel by combining an electric arc furnace steelmaking process using scrap metal with an integrated finishing plant. It is located near a number of large steel customers, making the distribution channels more efficient. SeverCorr complements SeverStal’s other U.S. business, SNA, which primarily serves the manufacturing hub of the Midwest U.S.
The U.S. currently contributes 16 percent to SeverStal’s total revenues and is a priority market for the company. In 2006, SeverStal produced 17.6 million metric tons of steel worldwide and had revenues of $12.4 billion.
Also in December, SeverCorr announced that its advanced coating line had become operational. At full capacity, the line will galvanize or galvanneal 450,000 tons of steel annually. Those products will include commercial, drawing, deep drawing and extra deep drawing, structural and high-strength low-alloy steels.
The line features a strip cleaning system with electrolytic degreaser, one galvanizing pot, and a vertical annealing furnace and post-treatment section for chromating. Coated products will be available in thicknesses ranging from 0.014 to 0.059 inches and in widths ranging from 36 to 72 inches.
ArcelorMittal Plans
Russian Long Products Mill
ArcelorMittal, Luxembourg, has signed an agreement with the Tver region of Russia to construct a greenfield long-carbon-steel production unit. The agreement makes available land to build a steel complex consisting of an electric arc furnace, with an annual capacity of one million tons, and two bar mills.
The steel complex will be built in two phases, beginning with a bar mill with the capacity to produce 600,000 tons of rebar and merchant bar. Work on the site will start during the second quarter, and commissioning of the mill is scheduled for early 2010.
“I am very excited about this project, as this will become our first steel production unit in Russia. The mill in Tver will give us exposure to a construction sector that is expected to grow at a yearly rate above 10 percent,” says Malay Mukherjee, a member of ArcelorMittal’s group management board.
ArcelorMittal also has announced plans to build a $380 million beam mill in Contrecoeur and the restructuring of its steel production activities in Canada. Flat carbon production will be consolidated in Hamilton and long carbon production in Contrecoeur. With this restructuring, the Contrecoeur site will close down its hot-mill operations on Jan. 31 and its cold-mill operations on Feb. 29.
“ArcelorMittal wants to develop a sustainable Canadian steel business. With the former Dofasco facility now part of ArcelorMittal in Hamilton, it does not make business sense to have Contrecoeur compete with a sister company in the flat carbon segment while Dofasco has unused capacity,” says Jos Jacqué, CEO, Long Carbon, North America.
In other action, ArcelorMittal agreed to acquire 100 percent of the shares of Austrian steel distribution company Eisen Wagner GmbH. Eisen Wagner sold 140,000 tons of material in 2007.
ArcelorMittal also recently acquired Cinter S.A., a stainless steel tube producer in Uruguay. Cinter had sales of $47 million in 2007.
In another development in South America, the Argentine Securities Regulator has approved ArcelorMittal’s cash offer to acquire the outstanding shares of Acindor it does not already own. Acindor, which is already 65 percent owned by ArcelorMittal, will become a key platform in the company’s long products strategy in Latin America, company officials say.
Esmark’s Sparrows Point
Agreement Terminated
Esmark’s plan to add Sparrows Point to its mill and distribution holdings has been derailed, at least temporarily.
ArcelorMittal, which owns the Maryland mill, has terminated its agreement to sell the facility to E2 Acquisition Corp., an Esmark-led joint venture. ArcelorMittal cited E2’s failure to secure financing for its decision.
The two sides had agreed to the sale in August, with a closing date of Nov. 30. ArcelorMittal later agreed to extend the date to Dec. 11, at which point it terminated the agreement.
Esmark Inc., the Chicago-based service center company had been trying to add Sparrows Point following its acquisition of Wheeling-Pittsburgh Steel Corp. Esmark CEO James Bouchard has said the appeal of Sparrows Point was its slabs, which could be delivered to Wheeling-Pitt.
Esmark reportedly is still interested in purchasing the mill and is trying to line up new investors. Partners in the E2 venture included Franklin Templeton Investments, Industrial Union of Donbass Corp., and Vale, a Brazilian company formerly known as Companhia Vale de Rio Voce.
The world’s largest steel company was ordered to divest Sparrows Point by the U.S. Department of Justice following the 2006 merger that created ArcelorMittal. Luxembourg-based ArcelorMittal will continue to operate the plant during the divestiture process.
Steel Dynamics Completes
Minnesota Mining Deal
Steel Dynamics Inc., Fort Wayne, Ind., has completed the purchase of approximately 6,000 acres in Hoyt Lakes, Minn., from Cleveland Cliffs Inc. Steel Dynamics also has obtained the mineral rights for this property, as well as mineral rights on additional land that is contiguous to the purchased parcel. These properties are at the site of a taconite mine on the Mesabi Iron Range that was previously operated by the former LTV Corp. and was later purchased by Cleveland Cliffs.
Steel Dynamics plans to re-open the mine, to conduct surface mining of iron deposits, and to construct and operate a facility for the concentrating of iron ore. Operations could begin in late 2009 or early 2010. The cost of this venture is estimated at $165 million. The company expects to hold approximately $65 million in equity and will be the sole owner of the mining and concentrating company, to be known as Mesabi Mining LLC.
Separately, Steel Dynamics and Kobe Steel Ltd. have formed a new corporation, Mesabi Nugget Delaware LLC, to construct and operate an iron nugget manufacturing plant on the site. The plant is expected to have an annual capacity of 500,000 metric tons and to begin iron nugget production in mid-2009.
Steel Dynamics anticipates that all of the iron mined from the site will be concentrated on site and delivered to the nugget plant or to future additional plants on the site. All of the output from the nugget plant will be consumed in SDI’s minimills, primarily in Indiana.
Evraz to Acquire Claymont Steel
Evraz, Luxembourg, will acquire all of the shares of Claymont Steel, a Delaware-based steel producer, for $564.8 million. The transaction will be completed through Evraz’s wholly owned subsidiary Titan Acquisition Sub.
Claymont Steel is a minimill focused on custom discrete plate. It has an annual capacity of more than 500,000 tons.
“We are excited at the opportunity to become part of a company with a significant international presence,” says Jeff Bradley, Claymont Steel’s chairman and CEO. “As a plate producer, we believe Claymont Steel will be able to contribute to and complement Evraz’s North American operations at Evraz Oregon Steel Mills. We believe that our customers will also support this deal.”
Claymont provides material to most major plate markets, including service centers, bridge fabricators, railcar manufacturers, heavy construction machinery, material handling and others.
“This transaction represents yet another important step in the implementation of our long-term strategy to develop higher-value downstream markets,” says Alexander Frolov, Evraz’s chairman and CEO. “It will expand our presence in North America, one of the most important steel markets globally. Having acquired Oregon Steel Mills at the beginning of this year, we laid the foundation of our American plate business and intend to continue to strengthen it now with Claymont Steel’s steel plate production.”
Stockholders of Claymont Steel, Claymont, Del., will receive $23.50 in cash per share. Following the transaction, which has been approved by Claymont’s board of directors, Claymont Steel will become a subsidiary of Evraz.
Aluminum Extrusion Billet
Plant Planned in Indiana
Alexin LLC, a new aluminum extrusion billet producer, will locate its first manufacturing facility in Bluffton, Ind. Alexin plans to launch operations in November 2008 following the construction of a new 350,000-square-foot facility. When fully operational, Alexin will produce more than 210 million pounds of aluminum billet annually.
“We believe the extrusion market needs high quality, large-diameter billet delivered by a regionally focused, service-oriented business partner,” says Tom Horter, president of Alexin. “We plan to redefine service, technology, processes and value to the customers.”
Location was a governing factor in the plans for Alexin. With 29 aluminum extruders in Illinois, Michigan and Indiana, Alexin can supply billet quickly from its northeastern Indiana location to these aluminum extrusion customers.
“We have found that many billet suppliers have located their facilities convenient for themselves rather than their customers,” Horter says. “We will be able to get products and services to customers faster and in a more cost-effective manner.”
Another deciding factor in the creation of Alexin is a growing gap between capacity and demand. “Existing capacity is quickly becoming sub-optimal. The need for high-quality billet production is expected to grow, while supply is distant, fraught with high cost, antiquated technology and unresponsive customer service models,” he adds.
People
Gary Stokes, senior vice president, sales and marketing, will assume the role of senior vice president, water transmission group for Northwest Pipe, Portland, Ore. Charles Koening, who oversees the water transmission group, will retire in July 2008. Also, Stephanie J. Welty has been named chief financial officer, replacing John Murakami.
Claudio Schultz has been named director of spare parts North America for Trumpf, Farmington, Conn. He will lead the spare parts team including customer service representatives, buyers and planners, stock room and return authorization groups.
David Cox has been named president of Moundridge, Kansas-based The Bradbury Co. Cox, who joined Bradbury in 1997, will maintain his duties as chief operating officer.
Marlon Piva has been named industrial sales manager for Cattron-Theimeg Americas. Piva will be responsible for sales of the company’s industrial products throughout Brazil.
Peter Laman has been hired as the new director of the Port of Indiana-Burns Harbor. Laman has 25 years experience in port operations, including work along the Gulf of Mexico and on the West Coast.
John Barneson has been named senior vice president, corporate development, for Kaiser Aluminum, Foothill Ranch Calif. He had been senior vice president and chief administrative officer. Kaiser also appointed John M. Donnan as senior vice president, general counsel and oversight; James E. McAuliffe as senior vice president, human resources; and Lynton J. Roswell as vice president and CAO.
John Walker, the chief executive officer of Global Brass and Copper Inc., has been elected to the board of directors of Nucor Corp., Charlotte, N.C.
Joseph Kinsch has announced plans to step down as chairman of the board of directors of ArcelorMittal. He will leave his position in May.
Shannon Forthuber has been hired as an inside salesperson at Morse Industries, Kent, Wash. Morse supplies aluminum, stainless steel and other materials to the marine, architectural and fixture industries.
Briefs
Concast Metals Product Co., Mars, Pa., has announced the creation of an environmentally friendly, regulatory-compliant lead-free copper alloys web site, www.GreenAlloys.com. The site pulls together information about no-lead alloys, including benefits and applications for use, while serving as a resource for designers, engineers and manufacturers who are looking for green solutions in the metals marketplace.
Northwest Pipe Co., Portland, has received orders to supply pipe to three separate projects. The company will supply $12 million of pipe for Colorado’s Prairie Works project; $11 million of pipe for the Spanish Fork Reach project in Spanish Fork, Utah; and $5 million of pipe to the Des Moines Water Reclamation Authority in Iowa. Northwest Pipe also has acquired the assets of the square tubing business of S Square Tube Products, Commerce City, Colo. S Square Tube Products manufactures a variety of products used in the traffic industry, primarily perforated tubing used in traffic sign posts.
Butech Bliss is manufacturing a high-strength scrap chopper for Sociètè Arcelor’s facility in Montataire, France. The new scrap chopper is part of an upgrade of an existing 2.0 mm thick x 1,750 mm wide finishing line and is scheduled to ship in late 2007.
ArcelorMittal has signed an agreement with the Republic of Mozambique to explore the mining of iron ore and coal, with a focus on metallurgical coal. ArcelorMittal also plans to build a new bar rolling mill with a yearly capacity of 400,000 tons.
Rheem Manufacturing recently purchased a new Red Bud precision multi-cut blanking line for the company’s plant in Fort Smith, Ark. This line will be built and assembled at the vendor’s Red Bud, Ill., plant and is scheduled to ship in September 2008.
Georg Automatic Feed Co. Ltd., a joint venture of Automatic Feed Co. and Heinrich Georg GmbH Maschinenfabrik, has launched its web site, www.gaf-ltd.com. The web site presents GAF’s products, including slitting lines, edge trimming and inspection lines, cut-to-length lines, packaging lines and press feeding lines.
Greer Steel, Dover, Ohio, has completed the addition of a Zenar 40-ton, top-running crane to service the company’s pickling and primary slitting departments. Greer will also install a new hot-rolled slitter, with a quarter-inch by 60-inch DMS slitting line. The slitting line will become operational in the first quarter of 2008.
Century Aluminum Co., Monterrey Calif., has completed the cell energizing for the 40,000-ton expansion at its primary aluminum smelter in Grundartangi, Iceland. This expansion takes rated capacity at the plant to 260,000 tons.
Pingguo Aluminum of GuangXi, China, has chosen Belding, Mich.-based Granco Clark to provide extrusion pullers for two press lines. The double pullers will be installed in a cut-on-the-fly arrangement.
Innov-X, Woburn, Mass., has installed systems for online QC testing of stainless steel tubes at Sandvik Materials Technology in Scranton, Pa. The FOX-IQ On-line XRF analyzer is an automated elemental analysis system to be used for high-throughput alloy sorting and quality control.
Sapa Industrial Extrusions has completed a $7 million rebuilding and upgrade of its No. 9 press at its Cressona, Pa., plant. The project, which required nearly one year of work, included complete disassembly of the entire press and replacement of all wearable components. The equipment employs indirect extrusion technology with a 5,700-ton capacity and 16-inch cylinder size. The press and its peripheral systems are now rated to be in “as new” condition.
California Steel Industries will implement a demand planning solution from Broner Metals Solutions at its facility in Fontana, Calif. Broner’s Demand Modeller will be implemented to improve customer service, planning of slab acquisition and capacity management.
Ullrich Aluminum Pty Ltd. has selected Granco Clark to provide a new extrusion handling system at its facility in Hunter Valley NWS, Australia. The handling system includes a runout cooling duct system along with a high-pressure spray quench to allow for the maximum extrusion speed with minimum space requirements.
Alcoa, Pittsburgh, has reached an agreement with the State of New York and the New York Power Authority on a new, renewable energy contract to supply the company’s Massena, N.Y., operations, which paves the way for an upgrade of the Alcoa operations. Alcoa operates two smelters in Massena with a combined output of 255,000 tons per year.
UC Rusal, Moscow, will proceed with the purchase of 25 percent plus one share interest in MMC Norilsk Nickel from Oneixm Group. The acquisition is part of Rusal’s plans to create a global, diversified metals and mining company.
WCI Steel Inc., Warren, Ohio, has entered into an agreement to modify its existing $150 million credit facility with Harbinger Capital Partners Master Fund I Ltd. “This amendment provides the company with substantial additional liquidity and the necessary flexibility as we return to full operations after the November fire at the blast furnace hydraulic control rooms and rebuild our working capital,” says Leonard M. Anthony, WCI Steel president and CEO.
In a letter to the White House, the Consuming Industries Trade Action Coalition joined 48 U.S. companies and trade organizations to urge the administration to abide by WTO decisions and to reject any legislative effort to require the United States to ignore or defy decisions by the WTO Dispute Settlement Body. The letter specifically references recent legislative proposals to ignore WTO decisions on the practice of zeroing, an accounting method that artificially inflates dumping duty margins.
The American Welding Society, Miami, has agreed to purchase Weldmex, the largest welding trade show in Latin America, from Trade Show Consulting. Under the terms of the agreement, AWS will maintain primary ownership of Weldmex, and assumes the rights to organize, promote, produce and manage Weldmex under the new name, AWS Weldmex.
Singer Steel Co. recently installed a Red Bud half-inch cut-to-length line with Stretcher Leveler and SCS Sheet Cleaning Line at its Streetsboro, Ohio, service center. This combo gives Singer the ability to produce ultra-flat material from coils up to 75 inches wide with weights up to 80,000 pounds. The SCS system is a patented process that takes hot-rolled black material through a simple, environmentally friendly process to produce a smooth, clean paintable surface that is rust resistant without the use of oils.
