May 15, 2012

State of Alabama
Press Release: Alabama Department of Commerce

Statement on ThyssenKrupp

Alabama Department of Commerce Secretary Greg Canfield


The Alabama Department of Commerce has been in contact with officials from ThyssenKrupp since the release of the Executive Board’s statement that it intends to “examine strategic options in all directions for the plants of Steel Americas in Brazil and the USA.”

“In our conversations, it is clear that the $5 billion investment which ThyssenKrupp made in Alabama will continue to hold a leading position in the market in terms of technology and product quality,” Secretary Canfield said.

“The projections for the North American steel market remain strong- in fact they are better than those projected for the European steel market. The question remains as to when North American steel demand will begin its recovery. Coupled with the fact that the Calvert operation depends solely on the steel slab raw material manufactured at ThyssenKrupp’s Brazil plant, the Calvert plant has been locked into a purchase price for these slabs at an artificially high cost,” he continued.

“We are told that the company will examine three strategic options, none of which are a threat to the operation of the Calvert plant nor the staffing levels of employees needed to produce steel there,” he said.

The first option would include decoupling the raw material agreement between the Brazil plant and the Calvert plant so that the Calvert plant can purchase raw materials on the open market at more favorable costs. The second option includes the company finding a business partner to bridge the time necessary for North American steel demand to rise. The third option would be to consider selling the Calvert operation to a third party much in the same way the stainless steel operation is in the process of being sold to Finland's largest stainless steel company, Outokumpu.

Secretary Canfield said the State of Alabama continues to have a project agreement in place and will continue to support ThysenKrupp’s management for ongoing viability of the plant in a manner that is consistent with the project agreement and expectations of employment levels for operation of the plant.

 



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