SDI plans expansion

June 25th, 2012

News Coverage:

SDI plans expansion

By Dave Kurtz

Monday, June 25, 2012, 12:00am

BUTLER — Steel Dynamics Inc. plans to spend $18.5 on an expansion of its Butler steel mill, creating 10-15 jobs.

The company has asked for a tax abatement on the expansion from the DeKalb County Council, which is likely to vote on the request July 2.

The project will help Steel Dynamics stay competitive by offering a higher-quality and more consistent product, the company said in its application for the tax incentive.

The new employees will earn between $65,000 and $70,000 per year, for a total of $650,000 to $1 million, the application says.

The company intends to start construction of the project this summer and finish by next summer, according to the document signed by Glenn Pushis, vice president and general manager of the Butler mill.

Despite its size, the project is modest on the scale of Steel Dynamics, which employs 630 people at Butler with a payroll of $54 million.

The project calls for $6.7 million in a building addition and $11.8 million in new equipment, the application says. The equipment would include cranes and coil-handling equipment.

Steel Dynamics is asking to phase in property taxes on the expansion over 10 years. County officials usually grant a maximum of 10 years on buildings, but only five years on equipment.

A committee of the council has met to review the application and voted unanimously to approve SDI’s request, said Councilman Bob Wilder of St. Joe

“The equipment that they’re putting in, some of it would be similar to what they put in in 1994, so it has a long life to it,” Wilder said about the reasoning behind the longer abatement.

Steel Dynamics is paying more than $3.5 million in property taxes in DeKalb County in 2012, according to county Treasurer Holly Albright.

If the expansion were assessed for taxation at its stated value of $18.5 million, annual property taxes in the expansion would be approximately $250,000 at this year’s rate for rural Wilmington Township. With an abatement, SDI would pay no taxes on the expansion in the first year, gradually increasing to full taxes after 10 years.

In its application, Steel Dynamics said it would move forward with the expansion whether it receives a tax abatement or not.

According to the application, the Butler mill can produce 3 million tons of steel per year. It refines 1.6 million tons by processing it in a cold mill at the Butler site. The remaining 1.4 million tons are sold as “unprocessed hot band” steel.

“In order to stay competitive in the hot band market, our customers are demanding a higher-quality and more consistent product,” the application says.

The new expansion, which SDI describes as a “leveler” project, would process up to 600,000 tons of hot band steel ranging from .04 inch to .375 inch thick.