SDI Sketches Out Acquisition of Idled Kentucky Electric Steel Mill

SEATTLE (Scrap Monster): The Fort Wayne, Indiana-based steelmaker, Steel Dynamics, Inc. (SDI) announced that it plans to purchase the idled Kentucky Electric Steel mill in Ashland, northeast Kentucky. The announcement to this effect was made by Mark Millet, Chief Executive, SDI during the second quarter 2018 earnings conference call. Millet classified the proposal under company’s list of planned acquisitions. However, he declined to mention any timeframe for the acquisition.

The Kentucky Electric Steel mill, owned by Hammond, Indiana-based Specialty Steel Works, has closed its operations earlier this year, resulting in job losses of nearly 100. The facility, with around 200,000 short tons of rolling capacity, has been a major producer of special bar quality (SBQ) and merchant bar quality (MBQ) flat products. In addition, the facility has an electric arc furnace with an estimated annual melting capacity of 400,000 short tons. Initially, SDI plans to restart the rolling operations, Millet said.

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SDI reiterated its commitment to future growth through investment in new acquisitions as well as existing operations. It must be noted that SDI had recently completed the acquisition of flat roll steel processing capabilities of Heartland for approximately $400 million. Also, it had announced investment of around $140 million in new galvanizing line at its Columbus Flat Roll division. This is in addition to the $75 million investment to utilize excess melting and casting capabilities at facilities including Roanoke Bar Division.

The company had announced robust second quarter 2018 financial results, with steel shipments hitting new record high. The net income had more than doubled over the previous year from $154 million or $0.63 per diluted share to $362 million or $1.53 per diluted share. The Q2 income from operations had surged higher by 55% over the previous quarter.