SSAB Starts Production at Axis Expansion
06/13/2012 - SSAB announced that the US$220 million expansion of its Axis, Ala., steel mill is nearly complete and recently began production.
SSAB announced that the US$220 million expansion of its Axis, Ala., steel mill is nearly complete and recently started production.
The Swedish steel firm will finish a 275,000-square-foot expansion by the end of the year that includes a quenching and tempering line for steel plate, allowing the company to strengthen more steel produced at the mill. SSAB already has a smaller heat treating facility in Axis.
The hardened steel sells for higher prices and is often used in heavy-duty applications like mining and construction equipment.
The expansion will create at least 130 new jobs for the Mobile area, primarily in operations. The company currently has 450 employees at the site, including permanent contractors working for SSAB.
SSAB said the new line will increase its capacity of quenched and tempered steel up to 220,000 tonnes annually. The plant's smaller line already has a 100,000-tonne yearly capacity.
President of SSAB Americas Charles Schmitt said most of the hiring and training for the new facility is complete, and last week the company made the first finished product to ship to customers. He expects the plant will reach full capacity by January.
"It's still early on and we have a very aggressive schedule to ramp up quickly," Schmitt said. "Right now the line is fairly limited in its capabilities. It's a process and a schedule that certainly take a few months to complete."
Schmitt said the demand for quenched and tempered steel is growing and with the completion of the facility the company will be better positioned for a broader expansion in high strength steel products.
"Our ambition is that the product itself is very well received," Schmitt said. "The intention from the start was to not only satisfy a growing North American demand for a more durable steel, but also to expand our reach beyond North America to South America and Asia."
SSAB had originally proposed a US$460 million investment in the Axis plant in October 2008 before suffering through a steep downturn in demand in 2009. As a result, the firm cut its investment and the capacity of the new heat treating line from 330,000 tonnes to 220,000 and pared down the number of employees it would add. The company started the project in November 2010.
"With the economic downturn, we thought it might be a good time to take a pause and recheck the landscape, conserve capital and reassess the short term marketplace," Schmitt said. "It was just a matter of timing to resume the project."
State and local governments have offered SSAB an incentive package worth more than US$24 million, including more than US$2 million in cash. They had originally offered an incentive package worth more than US$45 million before the project was stalled.
