State Seeks Incentives for Steel Plant

Mississippi lawmakers are drafting a bill that could allow up to $25 million in incentives to a steel company in hopes it will build a $650 million plant in Lowndes County and bring up to 450 jobs to the area.

The company, SteelCorr, would invest about $250 million in construction and between $400 million to $450 million for equipment, said Rep. Jeff Smith, D-Columbus, who sits on the Ways and Means Committee that will take up the bill.

The steel mini-mill would need 1,400 acres of the 1,500-acre mega site. Production workers would earn an average $70,000 salary minus benefits. A mini-mill turns steel scraps into goods rather than makes steel relatively from scratch like a traditional mill.

The mega site is in Columbus and is near the Golden Triangle Regional Airport. As part of the potential deal, the state would be asked to pad or prepare the area for construction, which SteelCorr anticipates would begin next spring. "The company (would then) take over and put the building over it," Smith said.

A significant amount of equity and a roster of respected investors will cover the cost of the project, the company reports. The company CEO is John Correnti, former president of Charlotte, N.C.-based Nucor Corp., another steel company that has an operation in Flowood.

Some 1.5 million tons of flat-rolled steel sheets would be produced annually in hopes of supplying the more than 10 automotive plants in the Southeast, including Nissan Motor Co.'s Canton site.

In a move to avoid the outcome of the failed state-funded Mississippi Beef Processors plant, that's now under investigation by the FBI and state auditor, the steel project is being scrutinized, Smith said. The Mississippi Development Authority is playing a key role. The agency is expected to review the plant's economic impact in upcoming weeks.

The Tennessee Valley Authority and the Columbus-Lowndes Development Link, parties close to the potential deal are not commenting.

However, SteelCorr officials told The Clarion-Ledger they are looking at the northern Mississippi land because of its proximity to the Tennessee -Tombigbee Waterway and rail system.

Access to the TVA's proposed transmission line that would extend 20 miles from its West Point substation to power the area is another draw.

Nearby universities, including Mississippi State University and the University of Alabama, which could help the company's recruiting efforts, are other attractions.

SteelCorr also viewed a site in Osceola, Ark., though it is unclear if the land there is still a contender.

If the mill opens in this region, it would support a trend in the automotive industry to move commodities closer to the final source of production, said Michael Robinet, vice president of global forecast services for CSM Worldwide Inc., which tracks the automotive industry.

Suppliers' proximity to plants helps reduce transportation costs, he said.

SteelCorr officials said they have not made a decision to build at the Columbus site but characterized their involvement with the state as serious.

Smith said Mississippi plans to make the company sign a "memorandum of understanding" which means SteelCorr would have to guarantee the 450 jobs it says the plant would generate. If there's a default, the company would have to pay for every job it didn't produce.

The Ways and Means Committee will vote on the bill, which will then go to the full House for a vote. - The Clarion (Miss.) Ledger