CHICAGO Steel Dynamics Inc. (SDI) plans to spend nearly $27 million to install a new heat-treating system at its structural and rail division in Columbia City, Ind.
The Fort Wayne, Ind.-based steelmaker said Tuesday that the system would be able to produce up to 350,000 tons of standard strength and head-hardened plain, carbon steel rails.
SDI has said it was looking to boost rail output at the Columbia City facility in part to make up for sluggish demand for construction-related products (amm.com, Oct. 19).
Site preparation will begin immediately, SDI said, and construction is expected to start in the first quarter of 2013. The heat-treating system is expected to be commissioned by 2014, with a ramp-up to full production by early 2016.
SDI said the new heat-treating capabilities would make it the "pre-eminent" rail manufacturer in North America, given that the system would be capable of processing 320-foot-long rail instead of the 80-foot lengths produced by some of its competitors. Longer rails, some welded together in quarter-mile strings, reduce the number of welds and weld-related problems and maintenance costs, the company said.
"This investment will allow us to further expand and diversify our structural and rail divisions market in a capital-efficient manner," SDI chief executive officer Mark Millett said in a statement. "Customers will be able to make us their one-stop shop for all cut or welded rail products."
But he stressed that the structural and rail division in Columbia City would continue to offer the products it traditionally has, including beams and piling.
SDI said that the project would create approximately 40 jobs and that it planned to source much of the material for it domestically.