By CHRISTOPHER LENOIS

LAPLACE – An improving economy, along with actions by federal and state government are serendipitously coming together at time when Bayou Steel needs it most.

The importing of low-priced steel from foreign sources and slumping economy have put the St. John Parish-based company on the brink of bankruptcy. According to Vice President of Finance, Richard Gonzalez, the company has lost $45 million, cut the number of employees to 350 and scaled back the work week from seven days to four.

While the new tariffs on imported steel imposed by President George W. Bush will not offer a direct benefit to companies like Bayou Steel, whose medium-size angles and beams are not protected, Gonzalez said he thinks there will be a “residual benefit,” from the new laws.

Of greater benefit is the bill Sen. Gary Smith said he and Sen. Joel Chaisson will propose jointly either at the regular April congressional session, or the March 25 emergency session – should Gov. Mike Foster call for one.

Smith announced the proposed bill at a New Orleans Regional Chamber of Commerce luncheon this week, which will provide the $2.5 million tax exemption Bayou Steel earned under the Recycling Tax Credit program as a cash refund.

Bayou Steel was the only business in Louisiana to qualify for the Recycling Tax Credit program. But the economic downturn has made it impossible to take advantage of the $2.5 million exemption.

“Credit against income tax doesn’t help when there’s no money,” said Gonzalez.

Gonzalez said the refund could be spread out over a period of 10-15 years, allowing the company to ride out the current downturn and eventually restore the employee base in St. John to 500 people.

Bayou Steel has already experienced a 20 percent increase in shipments since the last fiscal quarter. Gonzalez said that shipments had tailed off last November when their second largest customer declared bankruptcy.

But he sees new prospects in the future which has allowed them to return to a five day work week in the past month, and to being making preparations to re-hire a third shift of workers which will allow them to operate seven days a week at full capacity.