Continuous Casting Operations at Usx Corp. Case Analysis

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DOMD CASE ANALYSIS Continuous Casting Investments at USS PGPX 2014-15 GROUP K Abhinav Upadhyay Jaideep Singh Panwar Mayukh Basu Shishir Saraiya Soumendra Das Sarma Soumika Dutta Singh Executive Summary This report provides an analysis of the possible answers to the question confronting Keith Kappmeyer, vice president for Engineering & Research at the USS Division of USX Corporation. The dilemma for Kappmeyer is whether he should approve a proposal for a $600 million twophased investment to upgrade the company’s Mon Valley steelmaking complex. He is aware that this will, in all probability, be the last such investment, and the complex will be forced to operate for decades before USS could consider employing more advanced technology. Compact-Strip Production (CSP), a radically different and futuristic approach to slab casting, had already been endorsed by Nucor, a potential threat to USS. Recommendations for Kappmeyer have been discussed in this report. Methods of analysis include study of technical feasibility, total capital and cash flow analysis for the various options and study of the feasibility of delivering existing customer commitments. Recommendations discussed include:    Phased installations at the Edgar Thompson and Irvin sites. Installation of an electric arc and a CSP unit of 1 million tonne per annum at Irvin. Addition of a 1.6 million tonne CSP unit at the Edgar Thompson site. While studying the technical feasibility and computing cash flow analysis, the authors have made the following assumptions:   While computing cost for installing a new CSP unit, the amount spent by Nucor on a similar unit has been taken as baseline cost. There are no space constraints at the Edgar Thompson and Irvin units with respect to installing new CSP units. Objective USS needs to decide whether to upgrade the Mon valley plant using existing and

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