LA: Benteler Steel Investing $900M for 675-Job Manufacturing Plant
29 Oct, 2012
Gov. Bobby Jindal and Benteler Steel/Tube CEO Matthias Jaeger announced a $900-million, two-phase facility that will include both a seamless steel tube mill (phase one) and a steel mill (phase two). The project will be built on 330 acres at The Port of Caddo-Bossier, where Benteler will create 675 new direct jobs paying an average annual salary of $50,000, plus benefits. The facility will be one of the largest manufacturing projects in Northwest Louisiana's history. Benteler selected Louisiana after a lengthy, competitive site-selection process that included more than a dozen states and 100 potential sites.
An economic-impact analysis performed by Louisiana State University (LSU) indicates that the Benteler project will have a huge impact on Northwest Louisiana. Specifically, LSU estimates that the 675-job project will lead to the creation of approximately 1,540 new indirect jobs, resulting in a total of more than 2,200 new, permanent jobs in the area as a result of the project. Additionally, during the term of Benteler's contract with LED, which runs through 2035, LSU estimates that the project will result in total new earnings of $2.7 billion (approximately $150 million per year at full employment) in Northwest Louisiana and a total, cumulative economic impact of $16.2 billion in the region.
Gov. Jindal said, "This is a huge win for our state as it will be one of the largest industrial projects in the history of Northwest Louisiana that will change the face of this area's economy. Benteler considered building this new project in a dozen other states, but chose Louisiana because we are in the heart of America's energy corridor, have one of the best business climates in the country, have a world-class transportation infrastructure, and because we have the best workers in the world. This project will bring valuable foreign direct investment to Louisiana, help increase our country's energy independence, and create thousands of new career opportunities for Louisianians."
Benteler Steel/Tube GmbH, based in Paderborn, Germany, has decades of experience in the development, production and sale of seamless hot-rolled and seamless cold-drawn steel tubes. The company is a business unit of privately held Benteler International AG, which is based in Salzburg, Austria. The seamless steel tubes produced by the facility will be used for the exploration and transportation of oil and gas, as well as for the generation of power and mechanical applications. Currently, seamless steel tube facilities of various manufacturers in North America are concentrated in Alabama, Ohio, Pennsylvania and Mexico. The output of the new facility at the port primarily will be destined for locations in Illinois, Indiana, Ohio and Texas.
"We are pleased to select Louisiana as the site for Benteler Steel/Tube's first U.S. production plant," Jaeger said. "The talented workforce, welcoming business climate and important geographic proximity to North America's energy corridor were all important factors in our decision to locate here. We are extremely grateful to Governor Jindal and LED Secretary (Stephen) Moret for their leadership throughout the site selection process, and we look forward to working with them as we establish our presence in Caddo Parish."
Benteler's analysis of Oil Country Tubular Goods (OCTG) markets in the U.S. shows strong demand through 2035 as the nation reduces energy imports and increases domestic production.
To secure the project, LED offered Benteler a customized incentive package that includes performance-based grants totaling $57.4 million to reimburse site development, infrastructure and equipment costs incurred by the port and the company over the next few years of construction and operations; a performance-based grant of $12.75 million to reimburse certain relocation and internal training expenses; and the development of a new training facility and specialized equipment focused on manufacturing technology to be built on the campus of the Bossier Parish Community College.
The Red River Waterway Commission will contribute $6 million, The Port of Caddo-Bossier will contribute $3 million, and the Caddo Parish Commission will contribute $2.6 million, all for infrastructure improvements at the port required to support the new facility.
"Benteler's decision to build this new facility at The Port of Caddo-Bossier proves the Red River is a vital source for economic development essential to the future of Louisiana," said Red River Waterway Commission Executive Director Ken Guidry. "The Red River Waterway Commission is proud to help make this decision a reality for the river communities."
"We are delighted and very proud Benteler has chosen The Port of Caddo-Bossier to build their new facility," said President Erica Bryant of the Caddo-Bossier Port Commission. "This is a testament to the quality of our community and the determination of the team that worked to make this investment at the Port possible. It was obvious to us from day one that Benteler is the exact caliber company our community needs. The new employment opportunities this company will create at the Port for the people of North Louisiana will continue to enrich our community well into the future."
"The Caddo Commission is pleased to assist with the infrastructure improvements and tax abatement for the project in order to increase the number of jobs in Caddo Parish and further economic development in the region," said President Michael Thibodeaux of the Caddo Parish Commission.
In addition, Benteler Steel/Tube Manufacturing Corp., the U.S. entity operating the Shreveport site, will receive the services of LED FastStart™ – ranked the No. 1 state workforce-training program in the nation. The company also is expected to utilize Louisiana's Quality Jobs and Industrial Tax Exemption incentive programs.
The new training center initially will focus on meeting the training needs of Benteler; once Benteler's initial needs have been met, the facility will serve the broader needs of growing manufacturers throughout the region. The total value of the new training center will be approximately $22 million, including land, infrastructure, building and equipment. The Greater Bossier Economic Development Foundation, the City of Bossier City and the Bossier Parish Police Jury will contribute a combined $1 million, of the $22 million total, to provide road and other infrastructure improvements needed for the new training center.
"The Greater Bossier Economic Development Foundation committed a large amount of money to this project to help bring it to fruition. We are very proud to be a partner with the port, the city and the parish of Bossier and LED to make this project a reality for our community," said Executive Director and President David Rockett of the Greater Bossier Economic Development Foundation. "Today marks a great day in Northwest Louisiana with all the aforementioned entities, as well as our partners in Caddo and Shreveport, working together to make a project of this size, scope and complexity – a reality."
"Bossier City is excited to be a part of what we believe will be a tremendous economic engine for Northwest Louisiana for many years to come. Benteler Steel/Tube will provide a major boost to our economic climate by creating and retaining a significant amount of construction and permanent jobs," said Bossier City Mayor Lo Walker.
"The Bossier Parish Police Jury is proud to be a participant with all the other entities in bringing this project to Northwest Louisiana. We think it's an excellent addition and will help diversify the regional economy," said President Rick Avery of the Bossier Parish Policy Jury.
"Our employers in this regional economy depend on a productive workforce to be competitive," said Bossier Parish Community College Chancellor Jim Henderson. "We at Bossier Parish Community College take pride in delivering programs that meet the needs of these employers and provide our citizens pathways to rewarding careers. The training center will allow BPCC and FastStart to provide Benteler Steel/Tube a well-trained team on day one and will enhance our ability to develop talent for the manufacturing, construction, and energy sectors for decades to come."
Benteler will begin construction of the first phase of the plant in 2013, and the project will create more than 1,000 construction jobs. The first tubular mill phase of Benteler's Shreveport complex is expected to be completed in the second half of 2015, followed by the opening of a steel production mill within the next four years. The bulk of the full-time employee hiring for the first phase of the project is anticipated to occur in 2014. Together the two phases of this huge project will be 1.35 million square feet in size.
Interested parties may register for updates at www.bentelerjobsinlouisiana.com. The site includes background on the company, a video about the region's quality of life, and a sign-up form that will allow job seekers to be contacted when hiring begins.
"This is a major economic boost for Northwest Louisiana and I am elated to see such a dynamic company join the ranks of the outstanding businesses that already know the benefits of having their employees live, work and play in one of the finest regions in the entire state," Shreveport Mayor Cedric Glover said.
"NLEP is excited to be part of the team that recruited Benteler Steel/Tube to North Louisiana. Collaboration between state, regional and local partners sealed the deal, which will create hundreds of new jobs," said Chairman Todd Perry of the North Louisiana Economic Partnership.
Benteler Steel/Tube GmbH develops and produces customized tubes for selected customer groups and applications. Being a specialist for the manufacturing and processing of seamless hot-rolled steel tubes and seamless cold-drawn precision steel tubes, the company serves international customers in the automotive, OCTG/line pipe, heat transfer, hydraulics/precision engineering, and construction sectors. The parent company, Benteler International AG, posted operating revenue exceeding $9 billion in 2011, an increase of about 14 percent over the prior year. Benteler International AG employs more than 25,000 people at 170 locations in 38 nations worldwide. For more about Benteler, visit www.benteler.de.