Severstal Columbus welcomes campus partners to provide value-added services for customers

To expand its range of services to light flat rolled steel consumers, Severstal Columbus LLC yesterday officially welcomed two new downstream campus partners to its Lowndes County facility.

At a groundbreaking event attended by Mississippi Governor Haley Barbour, James Hrusovsky, Chief Executive Officer of Severstal Columbus, said that the location of Mississippi Steel Processing and New Process Steel on Severstal’s campus “further strengthens the position of Severstal Columbus as the premier steel maker in the southern United States. These projects also demonstrate the strong commitment to job creation in manufacturing and the determined spirit of the government and people of Mississippi.”

At the event themed “creating jobs and economic growth while delivering value to manufacturers,” Mississippi Governor Haley Barbour told over 200 government, business and community leaders, “I am delighted that New Process Steel and Mississippi Steel Processing are locating operations in Mississippi. Utilizing steel produced by Severstal, these two companies will create high-quality jobs for Mississippians and add value to the steel products already produced in the state.”

The addition of two campus partners has been part of OAO Severstal’s, the owner of the Columbus steelmaker, long-term vision for the greenfield electric-arc furnace plant. “From the very beginning, we recognized the strength of character and commitment of the local region and its people, and we always envisioned a facility that would eventually become more than just a steel plant to provide a multitude of services to our customers. Mississippi Steel Processing and New Process Steel put us well on the road toward achieving that vision,” said Mr. Hrusovsky.

Mississippi Steel Processing and New Process Steel are constructing facilities that will offer downstream services to Severstal Columbus’s customers as well as customers of other steel companies. Both are building on the 1,400−acre Severstal Columbus tract because of the active involvement of state and local economic development organizations. Each downstream processor will begin operation late in the first quarter of 2011.

Mississippi Steel Processing, incorporated in 2009, is a toll processor that will provide value-added services of leveling, slitting, storing, logistics and fabricating of light flat rolled steel products including those of heavier gauge. Logistical services include managing delivery via truck, rail and barge as well as warehousing. Steel will be processed from Severstal Columbus as well as other steel companies.

“Mississippi Steel Processing located on this campus to create a dynamic steel processing and manufacturing environment. When you have a world-class steel mill and combine it with a world-class processing plant, the end product will be impressive,” said Chip Gerber, President of Mississippi Steel Processing.

Its new facility will consist of 136,000 square feet of floor space expandable to 300,000 over the next five years. Mississippi Steel Processing will ultimately hire 55 employees from the local Lowndes County workforce.

New Process Steel is locating onsite to service the lighter range of carbon and coated flat rolled steel products. Its services will include slitting, stamping, sheeting, warehousing and fabricating of products. New Process Steel works with galvanized, Galvalume, aluminized and prepainted products.

“We are proud to be part of this project, and we view this Severstal facility to be one of the finest and most efficient makers of steel sheet products in North America,” said Bob Proch, President of New Process Steel. “With the support of the local community, we think we can be a big part of the economic growth Lowndes County and the state of Mississippi are expecting.”

Also expandable in response to increased demand, New Process Steel will begin operations in a 66,000−square-foot facility that can be increased four fold. Initial employment, also from the Lowndes County region, will be about 30 people. New Process Steel, founded in 1906 and currently headquartered in Houston, Tex., has other service centers in Texas, Illinois, Indiana and Alabama as well as in Mexico.

At the completion of anticipated expansions by both campus partners over the next few years, Mississippi Steel Processing and New Process Steel will have the combined potential to employ 120 people.

While construction is under way of the two new Columbus partners, work is also continuing on the expansion of Severstal Columbus, which will double the plant’s crude steel capacity to 3.4 million tons, matching Columbus’s hot strip mill capacity and allowing the plant to achieve greater economies of scale. The project includes a second electric arc furnace complex with a ladle metallurgy facility, vacuum degasser expansion, a second thin strip caster, a second shuttle-type tunnel furnace and a second downcoiler at the hot mill. The finishing side expansion will feature the addition of a fourth pickle tank to the existing continuous pickle line/tandem mill, additional hydrogen batch annealing bases and furnaces, a push/pull pickle line and a second galvanizing line. Anticipated completion is in late 2011 through 2012.

Projects under way by Severstal Columbus as well as by Mississippi Steel Processing and New Process Steel will further increase the plant’s participation in the growing industrial markets in the southern United States and in Mexico. Products from Severstal Columbus are purchased primarily by the distributor, automotive, construction, and pipe and tube end markets.

About Severstal North America:

Severstal North America is the fourth largest steelmaker in the United States and specializes in the full range of the highest quality light flat rolled products. Fully integrated operations are located in Michigan, Maryland, Ohio and West Virginia. A new state-of-the-art electric arc furnace operation in Mississippi serves the growing demand for steel in the southeastern United States. Severstal North America also has several joint ventures for the highest quality coated products.