Nucor Corp. opened its $230 million cold mill Thursday (April 12) on its campus in Hickman, just outside of Blytheville. The expansion will employ about 100 more workers, and will bring the total number of Nucor workers in Mississippi County to about 1,600, Nucor Steel Arkansas vice president and general manager Mary Emily Slate told Talk Business & Politics. The new jobs will pay about $80,000 per year.
Along with Big River Steel, nearly 3,000 people work in the steel industry in Mississippi County, Gov. Asa Hutchinson said during a ribbon cutting ceremony. It makes the county the fourth largest steel producing county in the country, he said. Arkansas has a total of 5,500 workers in the steel industry, according to the Arkansas Economic Development Commission. The jobs created by Nucor are high skill, high paying jobs – the kind of jobs needed in the Natural State, he added.
“When we recruit industries to the state, we point to Nucor. … Cotton fields have become steel mills,” the governor said.
Nucor CEO John Ferriola told Talk Business & Politics there were other sites around the country considered for the cold mill. The number one factor was the productivity of the workforce with facilities at their disposal, he said. The final decision was made in September 2016 to locate the mill in Hickman.
President Donald Trump has proposed billions in controversial tariffs on Chinese steel in an effort to make American steel companies more competitive on world markets.
Ferriola said he supports the tariffs, and the Chinese aren’t the only “unfair actors” selling steel. Other countries such as Vietnam and Turkey also use government subsidies to prop up their steel industries. It’s difficult for American companies to compete against state-sponsored counterparts in these countries, he said.
“They’re not exporting steel … they’re exporting unemployment,” he said. “We’re not asking for a hand out. We’re asking for an even playing field, that’s it. If the playing field is level our company will out compete any other company or country in the world.”
Steel tariffs need to be long term, Ferriola said. Investments such as the new cold mill take years to recuperate a company’s investment. The American steel industry suffers from cheap steel on international markets, and capital investors make less in the steel sector than in the manufacturing sector as a whole on average, he said. The manufacturing sector contributes $17 billion to the Arkansas’ economy each year, he said.
While not likely to fall under the category of “state-sponsored,” the Nucor project will receive the InvestArk and Advantage Arkansas state incentives.
Created in 1985, InvestArk provides existing Arkansas companies a 7% tax credit if they invest at least $5 million in upgrading and modernizing equipment. The credit can be applied to up to half of the company’s sales tax liability for a given year and can be spread over five years. It was originally designed for manufacturers but since has been expanded to corporate headquarters, call centers and other facilities.
The Advantage Arkansas program provides a tax credit for each job created that pays more than $10.99 an hour.
“The income tax credit cannot offset more than 50 percent of a business’ income tax liability in any one year and may be carried forward for nine years beyond the tax year in which the credit was first earned. The credit begins in the tax year in which the new employees are hired. Employees included in the new additional payroll under the project must be Arkansas taxpayers,” noted the AEDC website.
AUTO MARKET SUPPLIER
Ducker Worldwide, a market research firm, estimates that four million tons of high-strength, low-alloy steels will be needed for the auto market by 2025. The specialty cold mill complex will give Nucor the capability to produce products the company does not make. Locating the cold mill with Nucor’s sheet mill in Arkansas will give the company a transportation advantage over competitors outside the region supplying the local market and the growing Mexican market, company officials have said.
Ladd Hall, Nucor flat rolled products executive vice president, said the mill will produce 750,000 tons of steel per year. It will be stronger, lighter weight specialty steel, he said. The steel will be used in the automotive industry among others, he said.
Nucor opened its first facility in Mississippi County in 1992. The investment in the state in the region has been tremendous, and the reason the company continues to invest here is the dynamic workforce that’s been created, Ferriola said. This new mill is the latest indication of how committed the company is to Northeast Arkansas, and is one of only four like it in the world, he said.
Before the ceremonies ended, Ferriola offered one light moment. It was noted that Nucor year ago made garbage cans, and new technologies have allowed steel to be recycled in many ways.
“Your brand new Chevy might have been a washing machine in its previous life,” he said to laughter.