Thursday, July 30, 2015

Irving company to invest $250M in new high-tech micro mill, adding 300 jobs

Commercial Metals Company (NYSE: CMC) is bringing a new micro mill to Durant, Oklahoma, that will create an estimated 300 jobs at the mill and through support services that will be needed to support the new facility.

The company announced the new mill Monday in conjunction with Oklahoma leaders, including the city of Durant, the Choctaw Nation, the Durant Industrial Authority and the state. CMC said it will make a $250 million investment in Durant with the plant. That figure includes incentives awarded to CMC by the city and state, though company officials declined to say how much those incentives totaled.

"The incentives cover a broad range, from support for infrastructure to support a mill of this size and scale to various tax incentives," CFO Barbara Smith told the Dallas Business Journal.  

Smith added that CMS spent around $200 million to build its first micro mill in Mesa, Arizona. The facility, which was described at the time as the first in a new generation of steel mills built to serve regional needs, was constructed in 2009. Read more about the Arizona mill here.

The Durant micro mill will include the same improved technology developed from CMC's experience in Arizona, the company said in announcing the plant. Micro mills melt, cast and roll steel from a single strand, producing higher yields and lower energy costs than traditional processes.

"In the steel making process there are a number of components that are very important, energy being one, and yield," Smith said. "In the case of a micro mill, it’s very efficient from an energy perspective and allows us to have higher yield and less scrap."

Oklahoma Gov. Mary Fallin enthusiastically welcomed the investment.

"Our pro-business climate, great quality of life, and skilled workforce make Oklahoma the perfect home for this world class manufacturing operation," she said.

Joe Alvarado, president, CEO and chairman of the CMC board, told the Journal that Durant also offered CMC more space to expand its recycling operations.

"We have recycling and fabrication operations throughout the state of Texas," he added. This is extending our reach a little bit further north."

Pending permit approval, the micro mill is expected to open in fall 2017. CMC said it will fund construction from internally generated capital.

In its most recent fiscal year, CMC reported profit of $102 million on revenue exceeding $7 billion. It employs 9,300 globally. It ranked 16th in the Dallas Business Journal's largest public companies list for 2015.  

Paul O'Donnell and Korri Kezar/ Dallas Business Journal