ThyssenKrupp might delay Alabama steel plant

05/15/2009

By Dan Carsen

 In a May 12 management report on the first half of fiscal 2008-09, ThyssenKrupp AG said it might put off the construction and startup of the main part of its $4.65 billion steel plant being built outside Mobile, Ala.

“Due to the current global economic situation, it is being considered whether to delay start-up of the Alabama project, currently scheduled for spring 2010,” says the report. ThyssenKrupp officials said a delay might last several months or more, and that a final decision could be released in the next few weeks.

At the massive dual-output facility, which straddles Mobile and Washington counties, carbon steel and stainless steel operations are run by separate subsidiaries with different management structures. Once fully up and running, the plant is expected to employ 2,700 people, with about 1,800 working on the larger carbon steel side. In January, the company announced that the start of stainless steel production would be delayed from late 2009 to late 2010.

The May report said collapsing worldwide steel demand led to a 25 percent drop in orders and a 16 percent drop in sales compared to the first half of fiscal 2007-2008. The German multinational company could lose more than $1 billion this year, which would be the first full-year loss for the company since Thyssen and Krupp merged in 1999.

“The economic fundamentals have deteriorated more sharply than expected in recent months. The world economy is in a deep recession. The collapse in demand for carbon and stainless steel ... has impacted ThyssenKrupp significantly,” says the report. Company and industry analysts, however, are predicting a rebound in steel demand in 2010.

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