Indiana, US-based steelmaker Steel Dynamics Inc (SDI) has announced on September 27 that it has agreed to acquire from affiliates of Commercial Metals Company (CMC) certain facilities and assets of CMC's former steel-joist manufacturing operations.
According to a company statement, the assets will become a part of SDI's wholly-owned subsidiary, New Millennium Building Systems, and the transaction is expected to close within the next 30 days.
In February 2010, CMC announced its exit from the joist business and began the process of closing down all its operations that had produced and marketed these products.
"With our purchase of these assets, New Millennium will become the nation's second largest provider of steel joists and decking," said Keith Busse, chairman and CEO of Steel Dynamics. "Although the non-residential construction markets that New Millennium serves remain weak this year, we believe the long-term prospects for this business are sound and, as a consumer of steel, the fabrication business is very complementary to our steel business," Busse said.
The purchase will include three joist-manufacturing plants that New Millennium intends to reopen and begin operating in the coming months. These plants are located at Hope, Arkansas; Fallon, Nevada; and Juarez, Mexico. They will facilitate and accelerate New Millennium's expansion to serve construction markets in the Southwest and the West.
In addition to the plants mentioned above, the agreement includes the purchase of complementary assets, primarily production and material handling equipment from the other plants that were shut down by CMC. In total, Steel Dynamics is paying $17 million for the purchase of the CMC joist-making facilities and assets. The company estimates that the current average cost to build and equip a single new joist plant would be about $20-25 million.