SDI to Expand Rail Business

Steel Dynamics Inc., headquartered in Fort Wayne, Ind., (SDI) has announced plans to install a heat-treating system at its Columbia City, Ind., Structural and Rail Division (SRD) facility. According to an SDI release, when operational, the new system will be capable of producing up to 350,000 tons of standard strength and head hardened plain, carbon steel rails for North America's railroad industry.

The company estimates that the equipment and installation will cost less than $27 million. SDI says site preparation will commence immediately with construction to begin by the first quarter of 2013. The project is slated to be complete by the end of 2013.

The company adds that production ramp-up is expected to continue through 2015, reaching full production of 350,000 tons by early 2016.

SDI says the process being installed will involve a modern universal mill capable of rolling high-quality 320-foot-long rails. SDI points out that the longer rails will be cut to customer-required lengths or welded together into quarter-mile long strings using only four welds. The company adds that reducing the number of welds used will reduce the potential for weld-related track issues, dramatically reduce associated production costs and provide customers with a quality rail product.

"We are excited to announce this important growth initiative," says Mark Millett, SDI CEO. "This investment will allow us to further expand and diversify our Structural and Rail Division's market in a capital efficient manner.

“During 2012, we shipped our rail products to many of the American and Canadian Class 1 railroads, as well as to Mexico's largest railroad. Our rail customers have encouraged us to expand our product offerings to not only include head-hardened rail, but in these longer rail strings, thereby enabling our customers to reduce their cost of rail maintenance and replacement. This project will provide that need.

“Adding this product further demonstrates our entrepreneurial and innovative response to a marketplace demand, providing our customers with high quality, cost-effective products they want and need,” Millett continues. “Moreover, customers will be able to make us their 'one-stop-shop' for all cut or welded rail products.”

"Since 2002, when we began production at our Structural and Rail Division, our team has partnered with a variety of customers, supplying them with consistently high-quality products. We have achieved a reputation for on-time performance, scheduling flexibility and consistently high quality. With this new investment, we expect to be able to build on that reputation. We will of course continue to offer our traditional, high quality products to our existing structural beam and piling customers, and we look forward to expanding our relationships with our new rail customers," Millett concludes.