Welspun Expansion Could Position Arkansas For Major Steel Mill

Welspun Pipe, which located in Little Rock’s Port Authority in 2009, announced its second facility expansion today, adding 200 new jobs and $100 million in new investment.

It could be the foundation for even more.

Welspun currently employs 530 workers at its pipe construction facility in Little Rock. It has invested $280 million prior to today’s commitment. In total, Welspun’s annual payroll is expected to top $40 million.

“We are extremely delighted at the performance of our Little Rock facility, which has cemented the firm’s global reach in servicing some of the largest oil and gas companies in the world,” said Welspun Chairman B.K. Goenka. “We believe that this new investment will pave the way for Welspun to continue on its path of becoming one of the most respected line-pipe companies in the world and we are thankful to the City of Little Rock for the support that they have extended in fulfilling our dream.”

The expansion will add a new pipeline product for the oil and gas industry to Welspun’s portfolio and bring the company’s annual production to more than 500,000 tons.

Welspun will receive $4.5 million from the state for site preparation and building and infrastructure development. It will also qualify for $300,000 in training reimbursement from the state and a variety of potential payroll tax rebates and construction material tax breaks. The city of Little Rock will contribute $500,000 to the expansion project from its newly enacted sales tax hike.

Gov. Mike Beebe (D) lauded the Indian-based company’s investment in state. “Welspun belongs to us. They’re not in 49 other states,” he said.

BIGGER & BETTER?
Little Rock Mayor Mark Stodola said the expansion could lead to bigger and better economic projects. “This $100 million pumped into this community is going to do wonders for this community and for Little Rock,” Stodola said.

After the press conference, Stodola said he has been told the volume of pipe being produced at Welspun and in the region could position central Arkansas for a major steel mill.

“I know there’s lots of discussion about that. From what I understand, the capital investment in those kind of things here in 2012 is a huge, huge number,” Stodola said. “I think we’re a prime location from a distribution standpoint, so having a manufacturing facility like that is probably making a lot of sense to some folks that are in that business.”

Stodola also said that site visits through the Little Rock Chamber of Commerce suggested improving economic prospect. “There is really a good uptick in the number of inquiries, more so than last year. It really looks up for the first two months of the year,” he said.

Rajesh Chokhani, a vice-president for Welspun, agreed with Stodola’s assessment that a major steel mill — a potential billion-dollar investment — could eye central Arkansas for a location.

“Certainly, it will be an ideal location,” Chokhani tells Talk Business. “Little Rock would certainly be a location for a potential steel mill in the future.”

Major steelmakers, such as ThyssenKrupp and SeverCorr, have flirted with Arkansas before. Nucor Steel has major operations in northeast Arkansas around Blytheville. Recent moves from those companies suggest they are bullish on American prospects for growth.

Chokhani also said that employees laid off by Welspun due to the delay of the Keystone Pipeline project, a Canada-to-Texas pipeline project, could benefit from this expansion. He said those employees would be prime candidates for the new jobs. At the press conference, he singled out a representative from the Canadian consulate who was in attendance.