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Our robust R&D process identifies projects, goals, benchmarks, schedules and commercial strategies. This includes tracking new manufacturing techniques and technologies in the market, enabling us to stay ahead of the competition and better serve our customers. Our sales, operations and technical teams are always searching for sustainable innovations that help address society’s greatest challenges and make our customers’ job easier. We collaborate between our U.S. and Poland teams to research upcoming innovative technologies to upgrade our operations more efficiently and sustainably. We also depend on data analytics and our massive databases of operational data around the world to measure and track our performance to identify areas for improvement. Last year, we launched a National Sales, Inventory & Operations Planning (SIOP) process and began work optimizing our network of mills to reduce transportation miles driven and better serve our customers. We also regularly update our operating plan to meet evolving customer needs with innovations introduced and implemented across the business in a timely manner. In 2021, we continued to implement our SIOP program, and we are starting to see the benefits of optimizing our mill networks. When our newest micro mill comes online in 2023, we expect a material reduction in miles per ton shipped.
Implementing successful new processes and innovations involves technological breakthrough and commercialization. Our R&D process involves understanding customer needs, forward market trends and potential new product demand. We learn about opportunities from our people at every level of our organization. At CMC, we have an open-door culture and encourage our stakeholders to elevate innovative ideas. We believe all research is valuable and we archive any innovative initiatives for a future application that may influence new projects and industry demands. However, not all innovative ideas are successful. Despite our rigorous planning and data modeling, some projects just don’t provide the return we require. We evaluate new projects monthly or quarterly, depending on their scale, and we accept that part of innovation is knowing that not all good ideas are right for us and our customers.
CMC has a positive track record of developing and acquiring new and innovative products that offer viable solutions to our customers. We are the only U.S. producer of cryogenic rebar, used primarily in the construction of liquefied natural gas storage tanks.
CroyoSteel® is a cryogenic reinforcing steel produced exclusively at our micro mill in Mesa, Arizona, that exceeds minimum performance requirements for strength and ductility at extremely low temperatures (-274°F/-170°C).
We also offer a complete range of rebar options with increasing corrosion resistance levels to reinforce concrete structures with a variety of life expectancy requirements. Our full spectrum of products offers service lives between 20 and 100+ years and includes two products manufactured only by CMC that contribute to the construction of a stronger, more sustainable world by extending the service life of the infrastructure they support.
An uncoated, concrete-reinforcing steel product designed for high-strength capabilities, corrosion resistance and a service life of more than 100 years.
A zinc-alloy-coated rebar that prevents corrosion and has exceptional formability. GalvaBar® is created through a process that is free of volatile organic compounds (VOCs) and hazardous air pollutants and can be fabricated after galvanizing without peeling or flaking, thereby reducing environmental impact.
In 2021, we launched new products in Poland, including industrial quality wire rod with bainitic microstructure steel, cold-climate quality construction bars and freecutting steel. We trialed these innovations with science institutes and customers through our R&D process and determined that they reduce weight while increasing the strength of construction, reduce the energy required for processing, improveductility and support automated digital machining production processes.
CMC Steel Arizona 2 is currently under construction with an anticipated opening in Spring 2023. The Q-One technology first installed in Arizona 1 confirmed that there is value in applying this technology, and, true to our spirit of innovation, we are implementing this technology at our Arizona 2 facility.
Arizona 2 will be the world’s first micro mill to produce merchant bar in a continuous production process (this mill eliminates the reheat furnace, which reduces natural gas consumption dramatically). This will result in lower GHG emissions for merchant bar products manufactured at this mill versus others in the market.
The new micro mill is expected to begin commissioning in spring of 2023, employ roughly 185 people and achieve an estimated nominal annual capacity of 500,000 tons, including 150,000 tons of merchant product.
Located in Mesa, Arizona, Arizona 2 will further optimize CMC’s national mill network and extend our merchant bar offerings to the West Coast.
CMC has longstanding relationships with the railroads that service our mill, recycling and fabrication facilities. In Arizona, we partnered with the Union Pacific railroad and other public and private entities to construct a 6-mile industrial rail branch in southeast Mesa that will serve the transportation and logistics needs of existing and future businesses in the Pecos Advanced Manufacturing Zone, including CMC Steel Arizona 1 and Arizona 2.
This addition will reduce greenhouse gas emissions, traffic congestion and local air pollution by taking over 29,000 truckloads off U.S. highways and local roadways each year, reducing greenhouse gas emissions by 1.2M – 2.6M tons over the next 10 years.