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Steel Sheet
Monday | 27 September, 2010 | 4:47 am

An ultramodern steel mill

By Lauren Duensing

September 2010 - For two centuries, ThyssenKrupp has refined a business model that focuses on nurturing and supporting long-term customer relationships. The company formed in 1999 through the merger of Thyssen and Krupp and is headquartered in Essen, Germany. It serves customers in more than 80 countries and has nearly 200,000 employees worldwide.

"ThyssenKrupp has been a mainstay in steel in one form or another, either on the Thyssen side or the Krupp side, for 200 years," says Scott Posey, director of communications, ThyssenKrupp Steel USA LLC, Calvert, Ala.

The company wanted to use that expertise to expand its facilities beyond Europe and into the NAFTA region. As a result, it created ThyssenKrupp Steel USA LLC in 2007 to build and operate a carbon steel processing facility in Calvert, Ala., about 35 miles north of Mobile.

The entire operation is the result of a cooperative effort between two separate ThyssenKrupp segments--ThyssenKrupp Steel and ThyssenKrupp Stainless. ThyssenKrupp Steel USA is the carbon steel portion of the project, and it represents 70 percent of the project’s overall investment and employment.

Christoph Lackinger, ThyssenKrupp Steel USA’s president and CEO, points out that the collaboration makes perfect sense from an overall company perspective. "To put in a separate hot-rolling mill for the stainless production would be less efficient," he says. "In addition, the other logistics, like the river terminal for the inbound scrap for stainless and inbound slabs for steel, as well as the plant’s infrastructure are all jointly used," saving time and money.

Strategic location
The new location gives both the stainless and steel operations a home base in a growing market. "There was a site selection of 67 different locations in the Southeast; the process was narrowed down gradually to two in Louisiana and Alabama," Posey says. ThyssenKrupp chose Alabama, specifically the Mobile area, for a number of reasons. Most importantly, "it was a site that was ready to put shovels in the ground, and with this project being so large and unique, that was a rare find," he notes.

In addition, "the industrial base in North America has been historically moving from the Northeast to the Southeast, with the most obvious example being the automotive industry," Posey points out.

"One of the goals when building this facility was to enter the high-quality market, providing value-added products to our NAFTA customers," says Bob Holt, vice president of sales and marketing, ThyssenKrupp Steel USA.

The company will provide hot-rolled bands, pickled coils, cold-rolled coils, galvanized, galvannealed, aluminized, galvalume products, and a full range of steel grades from mild to advanced high strength, high carbon and structural steels for industries including automotive, construction, pipe and tube, and service centers.

Holt says the Southeast was a logical place for the company to invest. "If you look at the expected growth in the automotive business in the next five years, most of the growth is going to be down here in our home market," he points out. "Along those same lines, eight of the 10 major automotive OEMs have facilities down here in our home market.

"Fifty percent of the pipe and tube market and almost all of the energy segment of the pipe and tube market is located in Texas down to the Atlantic and up through Tennessee and North Carolina," Holt continues. "And the appliance and HVAC markets have gradually been moving to the Southeast and down into Mexico. Finally, for the metal-building business, we will have a line built especially to supply the metal-building industry. It’s strongest down here in the Southeast and Southwest, and for those reasons, I think it made sense for us."

In addition to proximity to customers, Posey also points out a number of logistical advantages, including the Port of Mobile, which is a quick trip down the Tombigbee River.

"The port has recently constructed a $100 million steel transloading facility for us on Pinto Island," he says. It also has five Class A railroads. "In addition, our location on the Tombigbee River connects us to extensive waterways so we can ship inbound raw material and outbound product both north into the United States and south back in to the port and then to places around the globe."

High-end service
The new plant’s proximity to these key industries helps ThyssenKrupp Steel USA achieve its ultimate goal of developing strong customer relationships. And those long-term bonds begin when a company ships a correct material order on time. The equipment at the Calvert operation is capable of achieving consistent material quality at tight tolerances.

The hot-strip mill can roll material from 1.5 millimeters through 25.4 millimeters, and the continuous pickle tandem mill can process from 0.3 millimeters up to 3 millimeters. At full production, the four continuous galvanizing lines can produce 1.8 million tons of coated products. Two of the lines can handle products up to 1,870 millimeters wide and the other two up to 1,670 millimeters wide.

Lackinger points out that all the systems have automation that is "key for keeping the highest tolerances." For instance, the cold-rolling mill "has features such as inline inspection and measuring devices, which are all part of a surface control to ensure the best quality."

In addition, the equipment also has an environmentally friendly side. For example, "on the cold-rolling mill side, we put in the newest technology for the regeneration plant. The hydrochloric acid can be regenerated more efficiently at lower temperatures and, as a result, uses much less energy than other regeneration facilities," Lackinger says.

"In addition to the fact that we’re close to customers, we’re putting in a state-of-the-art mill with capabilities we think are going to be second to none,” says Holt. "Our intention is to support our customers, not only with products but also with technical support. We’ve built into our commercial organizations the product applications and the technical service organization necessary to cover both the automotive and non-automotive markets.

"We tend to try to stay away from spot business," he continues. "Our goal is to establish long-term relationships with customers that they can depend on. That fosters a better and stronger relationship and better performance."

The company’s close relationship with its customers allows it to provide support in the form of technical advice. Holt says if a ThyssenKrupp Steel USA customer is developing a new platform for the automotive industry, the customer can request the company’s expertise on a proposed new grade of steel.

"We’ll send our technical-services people and product-applications people in there and also maybe use our research and development group in Duisburg to help support this development," he says. "We will also go in from time to time, if they’re having trouble with an existing part or an existing application. We may see a way to form it a little bit differently, and we can possibly suggest a different grade of steel.

"We have just in the last year come out with a program called InCar, which was developed in Germany by several of our industry divisions with the sole purpose of developing what we thought were key solutions to automotive problems," Holt continues. "This has been a three-year project that recently came to conclusion, and we have been taking that program on a road show to all of our automotive customers and demonstrating to them some of the things we’re able to do from a technology standpoint and a standpoint of maybe supporting them in the development of new ideas and products."

Strong focus
"We’re trying to build a culture here that we think is really unique," says Holt. The first item the core leadership team tackled after arriving in Alabama was the company’s mission, vision and value statement. "It wasn’t something we did in a couple of hours," Holt notes. "We gave it a lot of thought, and as the rest of the team came on board, we tried to integrate it into the day-to-day culture that we have here. We incorporate it into our meetings; we incorporate it into introductions of new employees. It’s something that we believe in and we continue to strive to make a part of our day-to-day lives."

Once completed, the facility will have an annual capacity of 4.3 million metric tons of American-made carbon steel products. "We have rolled our first coils in the hot strip mill," Lackinger says. "The cold-rolling mill is about to start up, the continuous pickling line will follow a month later, and then at year’s end, we will fire up the first hot-dip galvanizing line. ... We plan to be fully operational with all lines by the end of the second quarter next year."

"We have to get started, and we have to prove ourselves," Holt says. "But we have high expectations that the product we make will exceed the standards people are accustomed to and will set new standards for the industry in the NAFTA market."

"You don’t invest $4.6 billion dollars in a business plan to say that we’re going to be just as good as everyone else," Posey says. "It will only work if you are better than everyone else. And that’s our plan." MM

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