ArcelorMittal, Nippon Steel Name Modernized Facility

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ArcelorMittal (MT) and Japan’s Nippon Steel & Sumitomo Metal Corporation (NSSMY) have announced the new name for the world’s most modern steel finishing facility – AM/NS Calvert (formerly known as ThyssenKrupp mill) – in Alabama. The announcement was made during a private employee reception held at the facility.

ArcelorMittal expects the facility to produce the highest quality products and build a strong reputation for Calvert. Both the companies reaffirmed their commitment of achieving  the potential of Calvert, which has a total capacity of 5.3 million tons and features state-of-the-art hot rolling, cold rolling, coating and finishing lines will achieve the standard-setting potential.

The companies also appointed Chris Richards as the president of AM/NS Calvert, who will be responsible for the operations of the new joint venture.
ArcelorMittal recently closed the acquisition of ThyssenKrupp Steel USA (TK Steel USA). ArcelorMittal, in Nov 2013, signed a 50-50 joint venture pact with Nippon Steel to acquire ThyssenKrupp’s 100% interest in TK Steel USA for $1.55 billion.

This acquisition is an important strategic fit for ArcelorMittal and is expected to deliver $60 million of annual synergies for the company.

ArcelorMittal holds an identified franchise business in the automotive market and the acquisition is expected to reinforce the company’s existing auto business in the U.S. The NAFTA (North American Free Trade Agreement) automotive market is expected to see a roughly 15% rise in vehicle production over the next decade.

This transaction will also uplift ArcelorMittal’s position in supplying to the NAFTA energy industry, which is expected to demonstrate growing demand for energy pipe and tube products due to increases in oil and natural gas exploration and production.

The newly formed joint venture is also expected to meet the growing needs, especially of Japanese car manufacturers, for ultra-high tensile strength products with good formability.

ArcelorMittal currently carries a Zacks Rank #3 (Hold).

Other companies in the steel industry with favorable Zacks Rank are AK Steel Holding Corp. (AKS) and United States Steel Corp. (X). Both these companies retain a Zacks Rank #2 (Buy).

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