ThyssenKrupp Returns to Profit, Prepares for Start-Up of Steel Mills in the Americas

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Researched by Industrial Info Resources (Sugar Land, Texas)--After three consecutive quarters of net losses, German steelmaker ThyssenKrupp AG (EPA:TKA) (Dusseldorf) returned to profit in the first quarter of the company's 2009-10 fiscal year. ThyssenKrupp's net income was 195 million euros ($265.5 million). While both orders and sales were down year over year, order intakes showed a notable upswing from the previous quarter, moving from 7.5 million euros ($10.23 million) of orders to 9.33 million euros ($12.7 million), an increase of more than 24%. In a conference call discussing the earnings, Chief Financial Officer Alan Hippe touched on the start-up of ThyssenKrupp's Steel Americas mills, comprising mills in Brazil and Alabama.

"The ramp up of the Americas project is going on," said Hippe. "First sales contracts have been signed by Steel Americas--small amounts, but the business is starting, and the interest is high, so we look forward to bringing our projects into play and starting the operations."

The first orders were placed for products from the company's grassroot hot strip mill in Mobile, Alabama, construction of which began in late 2007. Production at the mill is scheduled to begin in the second quarter of this year. Production at the facility will be ramped up as steel demand, which has been extremely low in the midst of the global economic slowdown, begins increasing. The mill will eventually process slabs produced at the company's new steel slab mill in Santa Cruz, Rio de Janeiro, Brazil. However, production at the Brazil facility is not expected to start until early in the third-quarter of this year. Meanwhile, the Mobile facility will process steel slabs shipped from ThyssenKrupp's mill in Duisburg, Germany.

At a shareholder's meeting in January, Chief Executive Ekkehard Schulz said that a "flexible approach is being taken" to the startup of ThyssenKrupp's stainless steel mill in Calvert, Alabama, about 35 miles north of Mobile. The cold-rolling mill is scheduled to begin production in October this year, but will operate at a reduced capacity of 100,000 metric tons per year. The cold-rolling mill has a full capacity of 350,000 metric tons per year. The mill is part of a larger complex, consisting of a stainless steel meltshop, carbon steel mill, cold annealing mill, hot strip mill and pickling line. While the other facilities in the complex are scheduled for completion by 2014, the exact timing of commissioning remains unclear. "The other units for stainless steel products will be started up over an extended period," said Schulz. Industrial Info has tracked construction of these mills since the early planning and scheduling phases and will continue monitoring the progress of these facilities as they near completion. Information on these and other Metals & Minerals Industry projects can be found in Industrial Info's North American and International Project Databases.

Note: Euro-to-US$ conversions were done at the rate of 1 euro = $1.364.

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