In a press release reporting Q2 financial results, Steel Dynamics, Inc. detailed plans to increase production at the company’s newly acquired Heartland plant.
“We are integrating Heartland into our Midwest flat roll operations, and plan to focus our value-added, lighter gauge flat roll production at Heartland, which while increasing profitability will likely result in less than nameplate cold mill volume at Heartland,” said Mark D. Millett, President and Chief Executive Officer.
Millett said the company plans to increase production at the plant during the second half of 2018 to approximately 40,000 tons per month, with the expectation to reach an annual run-rate of between 800,000 tons and 900,000 tons of cold roll, pickled and oiled, and galvanized flat roll steel by mid-year 2019.
Additionally, based on current purchase price allocation estimates, Millett said he expects SDI’s third quarter 2018 earnings contribution from Heartland to be reduced by approximately $12 million to $15 million (pre-tax), due to fair value accounting adjustments. On a through-cycle basis, Millett said he believes the increased benefit of the Heartland acquisition will ultimately improve the company’s through-cycle EBITDA between $50 million and $60 million per year.