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Area Development - Site Selection, Facility Planning and Workforce Development

Severstal North America Celebrates $1.4 Billion Dearborn, Michigan Steel Plant Renovation

06/26/2012
Severstal North America, a subsidiary of Russian-based OAO Severstal, a vertically-integrated steel and steel-related mining producer, held the grand opening of its $1.4 billion renovated steel making facility at the former Rouge Steel plant in Dearborn, Michigan, which is estimated to retain and create approximately 2,000 jobs.

"This investment is a win for Michigan because it builds on our automotive heritage and it's a win for Severstal because it places the company in the world's automotive epicenter, with a skilled workforce and know-how that are unmatched anywhere in the U.S.," Governor Rick Snyder said. "We welcome this facility and congratulate Severstal for the tremendous improvements and expansion they have already made here."

In 2004, Russian-based Severstal Group acquired the assets of the former Rouge Steel from bankruptcy for $345 million and formed Severstal NA. Since then, the company has invested $1.3 billion in upgrading the facility and dramatically improving its quality. Upgrades include a new blast furnace, hot dip galvanizing line, pickle line tandem cold rolling mill, and significant upgrades at the basic oxygen furnace, caster and hot strip mill.

Severstal CEO Alexey Mordashov said "the company had a long-term vision for the plant from the first day it acquired the Rouge assets eight years ago. We saw opportunities to succeed by creating strong industry and community ties and servicing our customers with high quality products and advanced technologies."

"Being located here in the heart of the automotive industry with strong heritage and spirit of innovation, we are proud to be able to continue on the traditions of the great past and on to the bright future," he added.

To date, Severstal North America has spent $1.4 billion modernizing the Dearborn plant, including constructing of a pickle line tandem cold mill complex, where steel receives its acid bath, and hot-dip galvanizing line. The $450 million new "pickle line" has highly sophisticated control systems and cutting-edge operating practices and the $285 million galvanizing line, with advanced technologies, ensures consistent coating thickness and surface texture. The new facilities are capable of producing the newest generation of coated advanced high-strength steels for the most demanding applications, the firm said.

As an incentive, the Michigan Economic Development Corporation supported Severstal's investments in 2005 with Michigan Economic Growth Authority job retention tax credits valued at up to $49 million over 20 years, Brownfield credits valued at $51.25 million, training grants, and city of Dearborn local tax abatements.

Michigan Economic Development Corporation President and CEO Michael A. Finney said "Severstal's decision to locate in Dearborn demonstrates Michigan's strong advantages as a great place to do business. Severstal's commitment sends a message around the world that Michigan's highly competitive business climate and tremendous workforce capabilities mean real opportunities for leading edge companies."

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