Steel mill chooses Alabama

Published 12:00 am Monday, May 14, 2007

ThyssenKrumpp passes on possible location in St. James for billion dollar industrial project


Staff Reporter

ST. JAMES PARISH – St. James Parish and the State of Louisiana narrowly came out the losers against Alabama in a 15-month long competitive bidding war to bring in one of the largest private industrial projects in the United States over the next decade.

Germany-based company ThyssenKrupp AG would have brought 2,700 permanent jobs and 29,000 temporary jobs to St. James Parish with a $3.7 billion steel mill, but instead elected to locate its factory in Mount Vernon, Al.

The decision came in from the company’s Supervisory Board meeting in Dusseldorf at 2 a.m. central time Friday.

For 15 months representatives from St. James Parish, the Port of South Louisiana and the State of Louisiana persuaded the corporation to construct its steel mill in Convent, in a bidding war that began with roughly 200 players and eventually whittled down to Convent and Mount Vernon in February.

The 150-acre steel mill is expected to process three million tons of steel slabs and produce 4.1 million metric tons of flat carbon steel end products per year.

Louisiana representatives were confident the ThyssenKrupp Group would select Convent as steel mill’s site because barges could easily dock on the Mississippi River next to the facility and workers could load and unload materials directly from the factory to the boat. The Tombigbee River dock in Mount Vernon, Al. can’t be reached by barges because the river is too narrow and materials must be transported roughly 30 miles south to Mobile Bay and the port of Mobile, Al.

(See MILL, Page 2A)

The mill’s raw materials will be transported from a plant ThyssenKrupp AG is constructing near Rio de Janeiro, Brazil.

&#8220The logistics of the deep water of the Mississippi River gave us a clear distinct advantage in the moving of product and I felt they were going to have a very tough time doing the production on a body of water not any larger than the Blind River in Gonzalez. Obviously ThyssenKrupp saw otherwise,” said Joel Chaisson, Executive Director of the Port of South Louisiana.

Louisiana and Alabama offered lavish incentive packages, in the form of tax breaks and financial assistance, although representatives would not comment on the exact figures. However, the Louisiana legislature appropriated roughly $400 million for the steel mill’s infrastructure on Thursday and expected incentive packages far exceeded that total.

Louisiana’s equalization laws gave the state an edge in the competition until Alabama passed a spate of similar laws this past week to give ThyssenKrupp AG special tax incentives. The equalization laws allow Louisiana to match an offer of tax rebates and tax assistance to industry.

ThyssenKrupp AG’s decision to build in Mount Vernon may have been swayed by Alabama’s substantially less expensive electrical costs. The corporation will reportedly save $5 million per year by operating in Alabama instead of Louisiana.

The company used general terms to describe its reasoning.

&#8220Due to its high cost efficiency, Mount Vernon is the ideal location,” ThyssenKrupp AG’s statement said.

&#8220We certainly need to work with our energy companies to see that we can compete on an even playing field for these industries with electrical power and rail connections,” Chaisson said. &#8220We’ve got to learn from this. We’ve been to the Superbowl and all we need to do is find what our weaknesses were and correct them.”

At least two other major industries are interested in building at the site that representatives had set aside for ThyssenKrupp AG, according to Chaisson. He would not name those companies for confidentiality reasons, but said the 15 months spent preparing the site for construction will benefit incoming business.

The two building sites were roughly equal in size, with Convent offering 3,800 acres and Mount Vernon providing 3,500 acres. However, Mount Vernon’s site encompasses numerous acres of wetlands that will need to be treated by the company.

&#8220My feelings are just like a lot of other people in Louisiana – one of disappointed,” St. James Parish President Dale Hymel said. &#8220But we should be proud of the effort we put in to make it to the finals.”

&#8220Louisiana certainly has nothing to be ashamed of. We’ve shown we can compete on a worldwide scale,” Chaisson said.

The steel mill is expected to begin operating in 2010.

The ThyssenKrupp Group is a global technology company based in Dusseldorf, Germany that boasts annual sales of approximately $61 billion per year and has 188,000 employees worldwide.

ThyssenKrupp Steel AG is the holding company for the carbon steel activities of the group based in Duisburg, Germany and generates roughly $14 billion annually in crude steel production. It ranks among the world’s leading steel producers and employs more than 30,000 people. ThyssenKrupp Stainless AG sells roughly $8.3 billion annually in stainless steel flat-rolled products.

The company’s operations can be found in every state in the United States.