April 11, 2006 — Steel Dynamics, Inc. announced plans to add additional production capacity at its Columbia City, Ind., minimill. The expansion will allow SDI to add lighter weight structural shapes and merchant bars to its product offerings, and to produce a higher volume of rail products. The mill's current primary product is wide-flange beams.

The new project will include modifications to the existing caster to permit the production of higher volumes of beam blanks and blooms, as well as an additional reheat furnace and a second rolling mill (with associated material handling systems). SDI says the mill's current meltshop is more than capable of meeting the added hot-metal requirements of the new rolling mill.

When in full operation, the expansion is expected to add about 600,000 tons per year of new capacity, bringing Columbia City's finished steel production capacity to about 1.6 million tons per year. The company says that the cost of adding new rolling capacity at Columbia City is significantly less than the cost of building a separate stand-alone facility to make these products.

"We believe this project represents a great opportunity to continue to grow volume and earnings at Columbia City," said Keith Busse, President and CEO of Steel Dynamics. "This is a very cost-effective investment, all of which we expect to be able to finance from operating cash flow over the construction period. While this investment will expand the capacity of the Columbia City facility, we are not appreciably increasing production capacity for wide-flange beams, but are further diversifying the mill allowing us to produce new structural shapes while at the same time increasing the time available on the existing mill for the production of high quality rail.

"We have made excellent progress in the structural steel business since we began shipping wide-flange beams in 2002. Recent strength in non-residential construction has led to a record order backlog at Columbia City and has resulted in current production and shipping rates of nearly one million tons per year," Busse said.

Dick Teets, Vice President and General Manager of the company's Structural and Rail Division, said, "The additional rolling mill will permit us to achieve operational efficiencies and cost savings by balancing production between the existing rolling mill and the new rolling mill. We are very excited about this project's potential to allow us to produce a higher volume of rail products and become a major producer serving this important segment of the North American steel market. This project is a natural progression in the continued development of our Columbia City facility and the growth of SDI's steel business. Increasing the mill's output capacity by more than 50 percent will serve to compress our unit costs and allow us to achieve a greater operating profit per ton than would otherwise be possible.

"In addition to rail, we will be able to provide new light structural products currently purchased by many of our existing structural steel service center and fabricating customers. Currently, the smallest beams we are able to produce are 6-inch. We expect that our ability to produce lighter structural products will allow us to serve new Midwest OEM customers, such as manufacturers of recreational vehicles, mobile and modular homes, and truck trailers. In addition, New Millennium Building Systems, our wholly owned steel-fabricating subsidiary which uses steel angles to produce joists and girders, can take advantage of the internal supply of these products," Teets continued.

The Indiana Department of Environmental Management has approved modifications to the mill's Air Permit that will allow construction of the mill expansion to begin immediately. This permit allows SDI to operate both of the existing electric-arc furnaces simultaneously and to construct and operate a second reheat furnace to serve the new rolling mill.

Construction for the expansion, which should begin this spring, is expected to take about 18 months to complete, with the first shipments expected in the second half of 2007. The project is estimated to cost about $200 million, and will result in the addition of about 150 new jobs to the mill's current workforce of 400 employees.

Steel Dynamics' Structural and Rail Division is based at Columbia City, Ind. The Division supplies wide-flange beams in a variety of standard lengths and weights with web heights from 6 to 36 inches. The mill's rail production capabilities will include the production of long rails (240-foot and 320-foot) and the welding of these rails into quarter-mile strings at a rail welding facility that is currently under construction. By mid-2006, the company expects to begin shipment of standard rails to one or more of North America's Class I railroads and, later, to produce premium (head-hardened) rails. Ultimately, Steel Dynamics expects to supply approximately 300,000 tons of rail per year to U.S. and Canadian railways.