Export finance to the tune of USD 800 million for sheet steel plant in the US
Frankfurt am Main (ots) -
- KfW IPEX-Bank finances one of North America's largest and most state-of-the-art production facilities - Supporting Germany as a high-tech manufacturing location: SMS Siemag to supply core components for the highly efficient steel plant - Recycling: Using scrap steel as the primary raw material conserves resources in the production of high-strength steels
KfW IPEX-Bank is lending USD 794 million to finance the export of a complete, scrap-based, sheet steel production facility to the USA. The borrower and client for this new-build project is Big River Steel LLC, a company based in Mississippi County, Arkansas. The core components for the mill - which will be one of the largest and most state-of-the-art scrap steel recycling facilities in North America - are to come from Germany. They will be supplied by the steel mill systems provider SMS Siemag in Düsseldorf. KfW IPEX-Bank is acting as the mandated lead arranger and underwriter for the complex financing package that has a term of ten years and includes substantial export credit insurance from the German Federal Government (Hermes cover).
"This financial close shows that German engineering expertise is in demand around the world, especially in connection with modern and forward-looking production technologies," said Markus Scheer, member of the Management Board of KfW IPEX-Bank. "In this case we are financing a highly efficient steel mill while also safeguarding many qualified jobs for the exporter in Germany."
The facility financed by KfW IPEX-Bank is designed to produce 1.6 million tonnes of high-quality steel annually. The primary raw material used will be scrap steel sourced from regional markets. The total project costs for the construction of the facility in Osceola, Arkansas come to USD 1.6 billion.
The production facility being financed by KfW IPEX-Bank will be based on state-of-the-art technology supplied by SMS Siemag in Germany, the market leader in this segment. In addition to the facilities themselves, which will include an electric arc furnace, a thin slab casting and rolling plant, a cold steel press and other stages of the steel refinement process, the German exporter will also operate a service workshop for Big River Steel to ensure the maintenance of relevant production modules through SMS Millcraft LLC, its subsidiary in the US. SMS Siemag and KfW IPEX-Bank have a long-standing business relationship.
Big River Steel produces a wide range of high-quality steels, including innovative products such as strong, multiphase steels that help improve energy efficiency and safety in the automotive industry. Its main buyers are US companies in the automotive, pipe and energy sectors. The project's location in the southeast of the USA means it stands to benefit from the particularly favourable prospects for growth in that region.
About KfW IPEX-Bank GmbH
Within the KfW Group, KfW IPEX-Bank is responsible for international project and export finance. Its function of providing financing to boost the German and European economy is derived from the legal mandate assigned to KfW. It offers medium- and long-term financing to support key export industries, to develop economic and social infrastructure and to fund environmental and climate protection projects. KfW IPEX-Bank operates as a legally independent group subsidiary and plays a major role in fulfilling KfW's promotional mission. It is represented in the most important economic and financial centres across the globe.
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