Auf Wiedersehen, ThyssenKrupp Moi, Moien, Konnichiwa, Newcomers

Just six years after beginning work on two high-tech steel mills at the Mobile-Washington county line, German industrial giant ThyssenKrupp has sold both mills — the stainless mill to Finnish company Outokumpu Oyj last year and the rolling and finishing mill to a partnership between ArcelorMittal, based in Luxembourg, and Nippon Steel and Sumitomo Metals, based in Japan.

In the wake of a worldwide recession that slashed demand for steel, Thyssen-Krupp sold the pair of mills for far less than they paid to build them. At the beginning of December, Arcelor and Nippon agreed to pay $1.55 billion for the finishing mill.  Outokumpu paid $3.6 billion for the stainless plant.

Outokumpu hopes to capture a quarter of the U.S. demand for stainless steel, which it pegs at 2 million tons. Before buying the Calvert plant, the Finnish company already had a 14 percent U.S. market share. The company hopes to attract customers by offering a full range of products, including the hard-to-find 72-inch plate — the widest made — that is used by storage tank manufacturers.

Arcelor and Nippon hope to use the mill as an entry point to the American automotive manufacturing industry.

“The Calvert plant is the most modern finishing facility in the world, ” said ArcelorMittal Chairman and CEO Lakshmi Mittal in a December press release. “It ideally complements our existing operations in the United States and the Americas and will improve our ability to supply customers in the automotive and other markets in the Southern United States, where we do not have comparable facilities today.”

- Sponsor -

ArcelorMittal is the world’s largest steel and mining company, with operations in 60 countries. It has 25 plants in the U.S., with 18, 000 employees.

ArcelorMittal and ThyssenKrupp were marketplace competitors long before this deal. In 2006, they waged a financial battle for control of Dofasco, Canada’s largest steelmaker. Unwilling to match Arcelor’s $4.8 billion bid, ThyssenKrupp officials told the Financial Times that they could find an alternate entry point to the North American market by building their own new mill. One analyst said at the time that any alternative would end up costing the German company less than it would have paid for Dofasco.

At first it looked that way. Reminiscing about Alabama’s big economic development coup in winning the project, former Alabama Development Office leader Neal Wade recalled the understated request for information that arrived late one Friday afternoon from a site selection consultant. The RFI estimated the project at $2.4 billion.

In a protracted series of negotiations, Alabama beat out rivals for the project, which, by 2008, was valued at $3.7 billion — more than the value of all new industry in the state in 2006, Wade told Business Alabama.

A 2010 fact sheet from ThyssenKrupp put the total price tag at $5 billion.

Almost before the plants were in production, the 2008 recession put a stranglehold on steel sales, and the enormous losses from the two plants and a related steel slab plant in Brazil rocked management of the German company.

Outokumpu currently owns and operates the stainless mill. The ArcelorMittal-Nippon Steel deal still requires approvals from government trade agencies.


text by Nedra Bloom

The latest Alabama business news delivered to your inbox