Commercial Metals Announces Plan To Build State-Of-The-Art Micro Mill
IRVING, Texas, Jan. 10, 2022 /PRNewswire/ -- Commercial Metals Company (NYSE: CMC) ("CMC") today announced, as the next phase of its long-term growth strategy, a plan to construct another state-of-the-art micro mill geographically situated to primarily serve the Northeast, Mid-Atlantic, and Mid-Western United States markets. CMC believes that the location and capabilities of the planned facility will significantly augment CMC's scale in the Eastern U.S. and synergistically complement its existing operational footprint. CMC is currently in the site selection process and exploring several suitable options.
The new micro mill will be among the most environmentally friendly steelmaking operations in the world. The technology to be employed is lower in both energy consumption and greenhouse gas emissions compared to traditional steelmaking processes.
Barbara R. Smith, Chairman of the Board, President and Chief Executive Officer, commented "This is an exciting new investment for CMC and our customers. The new micro mill will fortify our position in the large construction markets within the region and optimize CMC's existing Eastern U.S. operational footprint through enhanced production flexibility, improved service capabilities, and logistical efficiencies."
Ms. Smith continued, "the recent enactment of the Infrastructure Investment and Jobs Act should provide an additional tailwind to what was already an attractive expected return on investment for the project. We anticipate the legislation will stimulate substantial incremental demand for construction steel, particularly in the targeted geographies where core infrastructure is among the oldest in the U.S."
"CMC was the first in the world to adopt the innovative micro mill steelmaking process, and today's announcement further solidifies our position at the forefront of this revolution in long steel production. Once the project is completed, we expect that nearly a third of our North American steel output will be produced in a micro mill, giving CMC the most operationally efficient and environmentally friendly plant network of any long steelmaker globally."
Following receipt of state and local incentives, permitting, and other necessary approvals, the construction of the planned mill is expected to take roughly two years.
About Commercial Metals Company
Commercial Metals Company and its subsidiaries manufacture, recycle and fabricate steel and metal products, and provide related materials and services through a network of facilities that includes seven electric arc furnace ("EAF") mini mills, two EAF micro mills, one rerolling mill, steel fabrication and processing plants, construction-related product warehouses and metal recycling facilities in the United States and Poland.
This news release contains forward-looking statements within the meaning of the federal securities laws with respect to general economic conditions, key macro-economic drivers that impact our business, the effects of ongoing trade actions, the effects of continued pressure on the liquidity of our customers, potential synergies and organic growth provided by acquisitions and strategic investments, demand for our products, metal margins, the effect of COVID-19 and related governmental and economic responses thereto, the ability to operate our steel mills at full capacity, future availability and cost of supplies of raw materials and energy for our operations, share repurchases, legal proceedings, the undistributed earnings of our non-U.S. subsidiaries, U.S. non-residential construction activity, international trade, capital expenditures, our liquidity and our ability to satisfy future liquidity requirements, estimated contractual obligations and our expectations or beliefs concerning future events, including with respect to the benefits and capabilities of the new micro mill and the timing for its construction. The statements in this release that are not historical statements, are forward-looking statements. These forward-looking statements can generally be identified by phrases such as we or our management "expects," "anticipates," "believes," "estimates," "future," "intends," "may," "plans to," "ought," "could," "will," "should," "likely," "appears," "projects," "forecasts," "outlook" or other similar words or phrases, as well as by discussions of strategy, plans, or intentions.
Although we believe that our expectations are reasonable, we can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Except as required by law, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or any other changes. Important factors that could cause actual results to differ materially from our expectations include those described in Part I, Item 1A, "Risk Factors" of our annual report on Form 10-K for the fiscal year ended August 31, 2021, as well as the following: changes in economic conditions which affect demand for our products or construction activity generally, and the impact of such changes on the highly cyclical steel industry; rapid and significant changes in the price of metals, potentially impairing our inventory values due to declines in commodity prices or reducing the profitability of our downstream contracts due to rising commodity pricing; impacts from COVID-19 on the economy, demand for our products, global supply chain and on our operations, including the responses of governmental authorities to contain COVID-19 and the impact of various COVID-19 vaccines; excess capacity in our industry, particularly in China, and product availability from competing steel mills and other steel suppliers including import quantities and pricing; compliance with and changes in existing and future laws, regulations and other legal requirements and judicial decisions that govern our business, including increased environmental regulations associated with climate change and greenhouse gas emissions; involvement in various environmental matters that may result in fines, penalties or judgments; evolving remediation technology, changing regulations, possible third party contributions, the inherent uncertainties of the estimation process and other factors that may impact amounts accrued for environmental liabilities; potential limitations in our or our customers' abilities to access credit and non-compliance of their contractual obligations, including payment obligations; activity in repurchasing shares of our common stock under our repurchase program; financial covenants and restrictions on the operation of our business contained in agreements governing our debt; our ability to successfully identify, consummate and integrate acquisitions, and the effects that acquisitions may have on our financial leverage; risks associated with acquisitions generally, such as the inability to obtain, or delays in obtaining, required approvals under applicable antitrust legislation and other regulatory and third party consents and approvals; operating and startup risks, as well as market risks associated with the commissioning of new projects could prevent us from realizing anticipated benefits and could result in a loss of all or a substantial part of our investments; lower than expected future levels of revenues and higher than expected future costs; failure or inability to implement growth strategies in a timely manner; impact of goodwill impairment charges; impact of long-lived asset impairment charges; currency fluctuations; global factors, such as trade measures, military conflicts and political uncertainties, including changes to current trade regulations, such as Section 232 trade tariffs and quotas, tax legislation and other regulations which might adversely impact our business; availability and pricing of electricity, electrodes and natural gas for mill operations; ability to hire and retain key executives and other employees; competition from other materials or from competitors that have a lower cost structure or access to greater financial resources; information technology interruptions and breaches in security; ability to make necessary capital expenditures; availability and pricing of raw materials and other items over which we exert little influence, including scrap metal, energy and insurance; unexpected equipment failures; losses or limited potential gains due to hedging transactions; litigation claims and settlements, court decisions, regulatory rulings and legal compliance risks; risk of injury or death to employees, customers or other visitors to our operations; and civil unrest, protests and riots.
SOURCE Commercial Metals Company
Company Codes: NYSE:CMC
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