Steel Dynamics to Ramp Up Capacity at Columbia City Mill

Steel Dynamics(STLD Quote), a steel manufacturer, said it plans to add additional production capacity at its Columbia City, Indiana mini-mill in an effort to diversify its product offerings. It will allow the plant to make lighter-weight structural shapes of steel and merchant bars and more rail products. The mill's current primary product is a wide-flange beam.

The Fort Wayne, Indiana-based company expects to add capacity of about 600,000 tons per year with the expansion, taking the mill's total steel production capacity to about 1.6 million tons per year. The company said about 150 new jobs would be added to the mill's current workforce of 400 employees.

The company is estimating that the project would cost about $200 million. The project beginning this spring will take about 18 months to complete, and first shipment is expected in the second half of 2007.

The company also said that 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.

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. With this, the company expects to supply about 300,000 tons of rail per year to U.S. and Canadian railways.

"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," the company said. "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."

The company's stock is trading at $56.92, up 12 cents, or 0.2% Monday.