Annual Report & Accounts 2013
Severstal Annual Report 2013 Home > Performance > Severstal International > Key production facilities
 

Key production facilities

The division’s steel production business comprises the following assets:

Steel production

Severstal Columbus is one of the most technologically advanced steel-making facilities in North America. Commissioned in August 2007, it is the newest mini-mill in North America and the only EAF compact strip process plant in the world designed to make exposed automotive steels. The mill produces high-quality flat-rolled products, including hot-rolled bands, hot-rolled processed sheet, cold-rolled full hard and cold-rolled fully processed sheet, and hot-dipped galvanised sheet. The mill is strategically located in Columbus, Mississippi, where there is outstanding access to rail, truck and water routes, enabling us to deliver product faster and more economically than other steelmakers throughout the growing southeastern US manufacturing region and into Mexico. The site is designed to allow for additional processing operations, which are being developed.

Severstal Dearborn, in Michigan, dates back to the earliest days of automotive manufacturing. It is strategically located close to major automotive customers, the Great Lakes waterways and three large railroads in North America, all of which provide access to raw materials and customers. Dearborn’s products include hot-rolled, cold-rolled and galvanised steel, as well as high-strength, high-carbon and low-alloy steel, largely targeted at the automotive industry. Other markets include pipe and tubing, strip re-rollers and galvanisers, service centres, construction, appliances and furniture.

Joint ventures and associates

We have a number of joint ventures and associates with local players on the US market. These have two main aims:

  • To ensure self sufficiency in raw materials;
  • To expand our manufacturing of value-added products. Our joint ventures help us to extend our client outreach and minimise our capital exposure.

Coke sufficiency:

Mountain State Carbon LLC is a 50-50 joint venture with Renco Group. It has four coke oven batteries (three three-metre and one six-metre refurbished in 2006) providing high-quality coke for steelmaking operations. Mountain State Carbon meets approximately 60 per cent of Dearborn’s coke needs.

Extending the value chain:

Double Eagle Steel Coating Company is a 50:50 joint venture with United States Steel Corporation. Adjacent to Severstal Dearborn, it is the world’s largest electro-galvanizing line, producing premium-quality galvanized sheet steel primarily for automotive customers. The plant has a production capacity of 789 thousand tonnes a year, approximately half of which is dedicated to Dearborn.

Spartan Steel Coating LLC is an associate with Worthington Steel of Michigan – Severstal Dearborn owns 48 per cent and supplies the steel sheet used as substrate. Located in Monroe, Michigan, it produces hot-dip galvanized sheet steel primarily for the automotive and service centre industries. It has a production capacity of 544 thousand tonnes a year, about 80 per cent of which is dedicated to Dearborn.

Mississippi Steel Processing LLC (MSP), of which Severstal Columbus owns 20 per cent, is a processor of heavy gauge, hot roll and hot roll pickle and oil products. It is a joint venture with Merlo Holdings Inc (40 per cent) and Layhill Ventures LLC (40 per cent). Construction was completed and production began in the first quarter of 2011, and 2013 output was 252 thousand tonnes.

CEO statement

Our strategic goal remains the same: we aim to be a leader in value creation. In the current volatile and challenging market environment, this means the ability to generate solid positive free cash flow throughout the market cycle.

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Chairman statement

Since listing we have been committed to the highest standards of corporate Governance and aim for full compliance with the UK Corporate Governance Code.

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Performance review 2012

Severstal achieved a solid set of results in 2012, despite worsening economic conditions, maintaining the Group’s EBITDA margin at 15.0%, reflecting the resilience of the business.

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Performance review 2012 - Severstal International

Severstal is now strongly positioned in one of the world’s largest and most dynamic markets. We have invested heavily in our US operations since 2004 and now this modernisation is complete, we are making good progress towards our production targets.

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