Severstal to beef up production in 2010

January 13, 2010 9:19:00 AM

Kristin Mamrack -

 

In the worst year of the industry''s history, Severstal''s Columbus mill operated at an astonishing 84 percent capacity in 2009, Severstal Columbus, LLC CEO Jim Hrusovsky told members of the Columbus Rotary Club Tuesday, updating them on the company''s business last year and goals for 2010. 

 

Last year was "extremely challenging" for the steel industry, Hrusovsky said, noting the steel industry, as a whole, operated at 33 percent capacity by late 2009.  

 

"This is the worst I''ve ever seen it," he added. "But Severstal Columbus did very well." 

 

The Columbus mill, which reached full capacity in April 2008, has 545 employees, 441 of which are hourly employees and 85 percent of which are "local hires." 

 

Only 50 of Columbus Severstal''s employees had "ever made steel before," Hrusovsky said, noting the average annual salary paid is $72,000. 

 

More than $900 million was invested in the mill''s Phase I construction and more than $200 million has been invested in Phase II construction, with more than $300 million likely to be invested in the next two years for a total of $1.4 billion invested in the mill. 

 

The Phase II construction, which will double the capacity of the mill to make 3.4 million tons of steel annually and result in the addition of 93 employees, is expected to be complete in 2011, Hrusovsky said, relaying the company''s accomplishments in 2009. 

 

Additionally, Severstal Columbus began its campaign of community support, with involvement in the United Way of Lowndes County and other agencies. 

 

"The community has given to us and we want to make sure we''re giving back to the community," Hrusovsky said. 

 

Goals for 2010 include reducing the rate of on-the-job injuries by 50 percent, along with boosting production and revenue. 

 

New markets for Severstal Columbus include line pipe for the oil and gas industry, tread plate for decking, motor lamination for the motor manufacturing industry and renitrogenized steel for water heaters. 

 

And construction for Severstal Columbus'' "campus partners," toll processors New Process Steel of Houston, Texas, and Mississippi Steel Processing of Columbus, will begin before spring, Hrusovsky said. 

 

Mississippi Steel Processing, a start-up company, is expected to construct a 160,000-square-foot plant north of the Severstal steel mill in the Golden Triangle Industrial Park and purchase steel coils from Severstal. 

 

The company is projected to bring about a $15 million investment to the county, and more than 50 jobs, company President and Principal Chip Gerber announced in mid-2009. 

 

New Process grew out of a roofing and supply business established in Texas in 1906; it now has five production sites in the U.S. and one in Mexico. 

 

Challenges for the year include improving safety at the mill, dealing with an unstable economy, high domestic unemployment curbing consumer spending, a poor credit market, and the steel industry still struggling, he added, explaining Severstal Columbus soon will have competition in the form of a ThyssenKrupp mill in Mobile, Ala., expected to be completed in the summer. 

 

The $3.7 million plant is expected to be operational this year, turning out carbon steel and stainless steel and creating up to 2,700 jobs when fully operational. 

 

Hrusovsky concluded by noting the reasons Severstal chose to locate in Columbus, including the area''s "available talent" and employees'' work ethic, offered development grants to "stimulate the project," infrastructure development, megasite development, local and state sales tax incentives and community support. 

 

"Our success confirms the selection of the Golden Triangle as the best choice," he said.