Commercial Metals Co.: Plant Construction, Organizational Restructuring

Dec. 3, 2009
New facility planned in South Carolina, while realignment focuses on regional efforts

The prospect of a manufacturer actually building a new plant in the United States while most companies are trimming workforces and shutting down facilities seems highly unlikely. But that's exactly what Commercial Metals Co. is doing.

The steel and metal products recycler will build an alloy hardeners plant in Cayce, S.C., near its steel minimill, the company said on Nov. 17. The plant will produce briquettes composed of manganese, chrome and iron aluminum and pure aluminum, with the capacity to supply various products to other markets.

The facility will become part of the CMC Cometals division and will operate under the name CMC Cometals South Carolina.

"The investment will elevate our service to customers in the steel and aluminum industries, reflecting CMC's long-term commitment to these industries," said Ryan Campbell, a vice president in the CMC Cometals division.

The majority of the plant's production will serve the North American market, but it also will be used to grow its international business, Campbell said. The company will rely on global suppliers to provide the plant with critical raw materials, including manganese, chrome and other related materials.

"This Greenfield operation is a perfect fit with our long-term strategic plans to produce value-added niche products servicing the steel and aluminum industries," said Ed Skornicki, president of the CMC Cometals division.

Commercial Metals Co.
At A Glance

Commercial Metals Co.
Irving, Texas
Primary Industry: Primary Metals
Number of Employees: 15,276
2008 In Review
Revenue: $10.42 billion
Profit Margin: 2.23%
Sales Turnover: 2.20
Inventory Turnover: 8.20
Revenue Growth: 25.19%
Return On Assets: 6.68%
Return On Equity: 14.98%
The new plant announcement came shortly after the company said it would realign its reporting structure within its CMC Americas and CMC International divisions. As part of the restructuring, CMC Americas now oversees Americas Recycling, Americas Mills and Americas Fabrication.

Two segments within the CMC International Division are now known as International Mills, comprising all mills, recycling and fabrication operations outside the United States, and International Marketing & Distribution, which includes all marketing and distribution operations outside the Americas as well as CMC Cometals in Fort Lee, N.J.

The company merged its two U.S.-based trading and distribution divisions, CMC Dallas Trading and CMC Cometals to form the U.S.-based portion of a re-established International Marketing & Distribution segment. The Singapore-based business units along with CMC Coil Steels in Australia also became part of the new marketing and distribution division.

"The new structure, based on a global focus with a regional approach, couples the strengths of our integrated operations with the global coverage of our marketing network and enables us to leverage growth opportunities whenever and wherever presented," President and CEO Murray McClean said in a statement. "This structure will also better enable CMC to respond to market conditions and to take advantage of the global reach that a unified marketing and distribution structure affords us."

The company is trying to rebound from a year-end quarter in which profit dropped 88% from the same period last year. McClean noted that the federal economic stimulus plan had a "negligible" impact on the company, while China benefited from "an effective stimulus package."

Commercial Metals will report its first-quarter earnings on Dec. 22.

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