U.S. Steel announced during a Wednesday conference call with investors it plans to pump an additional $200 million into its steel mills over the next few years.
Chief Executive Mario Longhi said the steelmaker would do multiple projects, many less than $10 million, over the next three to four years to improve profitability and competitiveness. Some of the projects will involve rolling mills that recently had trouble, causing production to dip in the fall.
Spokeswoman Erin DePietro said the company would not comment on where the projects would be. Some of the investment would almost certainly come to Northwest Indiana though, where U.S. Steel operates Gary Works, its largest mill. Locally, the steelmaker also runs East Chicago Tin and the Midwest Plant in Portage.
U.S. Steel lost $440 million last year, a significant improvement from the $1.6 billion it lost in 2015. The company coped with the lowest steel prices since 2004, but is starting to see dividends from all the trade cases it's filed against foreign steel dumpers.
"We have also been investing in our facilities, and as we indicated last quarter, increasing both the pace and magnitude of our efforts in this area is a priority for this year," Longhi said on the conference call.
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Analysts on the call questioned whether $10 million really went that far in a steel mill, and Investor Relations General Manager Dan Lesnak said the projects would have a cumulative impact. He said U.S. Steel was looking at smaller projects, so they could be moved around so as not to interfere with the order book.
"You could have a $5 million project to replace a drive on a line somewhere," he said. "You could have a couple of millions to replace sensors or upgrade the sensors or side-trimming, anything and everything. So, there is not any one big-ticket project. You will have multiple projects on an individual facility that will add up over time."
Longhi said the plan is a comprehensive one that will help the steelmaker provide customers with higher quality steel, and can be scaled back if the market worsens again.
"We will be implementing this plan over the next 3 to 4 years in order to minimize disruptions to our operations and to ensure we continue to support our customers throughout this process," he said. "Our asset revitalization plan is not just sustaining capital and maintenance spending. These projects will deliver both operational and commercial benefits."