Big River Steel announced Friday (June 29) a $1.2 billion expansion at it’s scrap recycling and steel production facility in Osceola. The move will create at least 500 new jobs that will pay a minimum of $75,000 per year, Arkansas Economic Development Commission Director of Communications Brandi Hinkle told Talk Business & Politics.
The expansion is among the largest in terms of money spent in the history of the state, Hinkle added. It will double Big River Steel’s hot-rolled steel production capacity to 3.3 million tons annually. The expansion also will facilitate the company’s ability to produce higher grades of electrical steel, demand for which is expected to increase with continued focus on energy efficiency and the increase in hybrid and electric vehicle sales, according to the company.
“Our $1.2 billion expansion will further cement Big River Steel’s position as a global leader in terms of advanced manufacturing and environmental stewardship,” BRS CEO Dave Stickler said. “Announcing this investment less than 18 months after beginning operations is a testament to the hard work and great success of the men and women on our team.”
The only state incentive offered for the expansion is a recycling equipment income tax credit, Hinkle said. The credit is for up to 30% of eligible recycling equipment costs.
Engineering efforts are underway with SMS group GmbH, the primary technology provider, and will continue throughout the summer months. Construction will begin later this year and continue for approximately 24 months.
BRS also is considering the installation of a next generation coating line focused on automotive applications, according to the company. Such an installation may involve a steel industry partner. BRS is also exploring opportunities to supply the market with grain-oriented steel products, either within this expansion phase or as a future endeavor.
“When Big River Steel chose Arkansas as the site of its new plant, it was the largest economic development project in the state’s history,” Gov. Asa Hutchinson said in a statement. “Our state’s pro-business climate has led to the company deciding to expand here. That means even more jobs and more investment in Arkansas.”
BRS broke ground on its initial $1.2 billion facility in September 2014. The company received $125 million in general obligation bonds under the state state’s Amendment 82 provision that allows for so-called “super projects.” It also received a $50 million loan, that was paid back 17 years early, and another $50 million for site preparation, according AEDC. BRS received $20 million for subsurface stabilization, and another $5 million for bond insurance. Th company also received a package of tax credits and incentives to build its plant in the state.
When it was first announced, it was the largest industrial project in Arkansas history. BRS was obligated to employ 525 for the incentive package, and it now has 541 employees, Hinkle said. Those employees make on average more than $100,000 per year, she said.
BRS makes steel for electrical component and automaker uses, officials said. Vehicles with heavier steel tend to be safer, while vehicles with lighter steel are more fuel efficient BRS’s goal is to develop steels that meet the federal government’s safety and fuel standards better, he said. BRS along with Nucor Steel in Blytheville have made Mississippi one of the top steel producing counties in the country.
“Big River Steel continues to perform beyond expectations,” AEDC Director Mike Preston said. “Thanks to Big River Steel’s commitment to Arkansas coupled with our talented workforce, low cost of doing business and a pro-growth governor, this expansion further solidifies the state’s position as a leader in steel production and industrial manufacturing.”