The new direct reduction plant in Corpus Christi produced the first tonnes of high-quality sponge iron on September 28, 2016, with the start of test operations. Many customers in the NAFTA region and Europe, as well as voestalpine’s Austrian sites in Linz and Donawitz, have already started receiving shipments of the pre-material from Texas in late 2016. On April 1, 2017, the plant shifted to regular production, and recorded a positive result even in its first month of operation, both in terms of profit from operations (EBIT), and operating result (EBITDA).
The overall project costs determined in the 2016/17 Annual Report amount to USD 1.012 billion. This is only slightly above the interim figure of around USD 990 million published in January 2017. The increase is the result of finishing work at the plant. As originally planned, the overwhelming majority of the investment required for the project has already been included in the financial statements for the past three business years (2013/14, 2014/15, and 2015/16). Only a relatively modest investment sum was carried over into the most recent business year 2016/17 (ending March 31, 2017).
The total costs for the project, calculated and accounted for in US dollars, were estimated at USD 742 million at the start of the project in 2012. As repeatedly explained on past occasions, the increase in investment expenditure is essentially due to delays caused by a longer period of critical weather conditions during the first phase of the project, significant cost inflation as a result of the unforeseen construction boom in the Corpus Christi area starting 2014, as well as additional investments, technical optimization, and environmental measures (warehouse design, noise control). Over the last months of the run-up phase, further efficiency-raising measures have also been taken with respect to infrastructure and materials handling technology.
Ultimately, the state-of-the-art plant in Texas paves the way for voestalpine to secure steel production at its Austrian sites, and to reduce CO2-emissions in the steel production process. As a Group primarily specialized in manufacturing high-tech steel products, the Steel Division’s new plant represents a significant reduction in energy input in future, site-specific reduction in CO2-emissions of up to 5%, and a wider and more flexible raw materials basis through the addition of versatile, high-quality HBI.