German steelmaker ThyssenKrupp has announced on Friday it will construct a new $4.19 billion steel plant in Alabama, which has attracted other German companies, including DaimlerChrysler in recent years. The firm, one of the world’s largest steelmakers, also reported that its second-quarter net profit fell 44 percent due to a multimillion-dollar fine levied by the European Union. The Duesseldorf-based company, whose products range from automotive parts and elevators to slabs of steel, earned €244 million in the January-March period, compared with €441 million a year earlier. The construction of the steel plant would also mark the one of the largest industrial investments in the USA by a foreign corporation in several years.
The board of ThyssenKrupp, meeting in Dusseldorf, Germany, has selected the site for the steel plant that will provide 29,000 construction jobs and 2,700 permanent factory jobs when it starts operating in 2010. The firm had taken the final decision after considering 67 locations in 20 states and the company has pointed the decision to sites in Alabama and Louisiana. Both states have enticed the steelmaker with incentives worth about $300 million for new roads, tax breaks, workers training and site preparation.
However, for Alabama, engaging the massive ThyssenKrupp deal would top almost 15 years of success attracting foreign companies such as Mercedes-Benz, Airbus and Hyundai. ThyssenKrupp conducted extensive due diligence and negotiations to choose a location for the construction of a new facility in the US.
In an official communique, Bob Soulliere, president and CEO of ThyssenKrupp Steel and Stainless USA, said, ‘factors in selecting Alabama 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.’ The plant will have annual capacity of 4.1 million metric tons of carbon steel end products.
ThyssenKrupp had also amplified its planned investment from $2.9 billion as it has planned to produce more steel at the new plant. The company in its statement said, ‘Higher capacities and extended plant configurations were shown to be feasible and economic’. The plant, which will produce flat carbon steel and stainless steel, will have the capacity to produce up to 5.2 million metric tons of steel a year. More than half of that will be made from steel slabs shipped from the company’s mill in Brazil.
The company has further said that it wanted to ‘substantially expand’ its stainless steel business in North America, and that the Alabama project was ‘a central element of ThyssenKrupp Stainless’ growth strategy.’
