Steel Dynamics, Inc. announced Tuesday a plan to add an expansion valued at nearly a quarter billion dollars to its Lowndes County facility, which is expected to create at least 45 jobs in the next three years.
The steel mill in the Golden Triangle Industrial Park near Golden Triangle Regional Airport will add a third galvanizing line to the facility, which produces flat roll steel products, according to a company press release.
Golden Triangle Development LINK CEO Joe Max Higgins said the company will invest $140 million in the new line, while investing another up to $100 million in other improvements and upgrades.
“I’m not sure that there’s been a capital investment announcement of this size in the state this year, and if there has been, I’m not aware of it,” Higgins said. “It’s a quarter of a billion dollars.”
Steel Dynamics, an Indiana-based company that is one of the largest steel producers and metal recyclers in the country, purchased the local steel mill from Severstal North America in 2014. This is the second multi-million dollar expansion to the mill since that purchase, including a paint line it completed in 2017.
“Since our acquisition of Columbus in 2014, the team has done a tremendous job transforming the through-cycle earnings capability of this facility,” Steel Dynamics President and CEO Mark D. Millett said in the press release. “This wave of investment is the next step in our vision.”
SDI representatives did not return phone calls from The Dispatch by press time.
Public financial support
Lowndes County and the state have both stepped up to offer financial support and incentives to the new project, with Mississippi Development Authority providing the county with a $1.4 million railroad loan to build a new railroad around the site, president of the Lowndes County Board of Supervisors Harry Sanders said. The loan has no interest and will be paid off over 10 years, he added.
He said the Lowndes County Industrial Development Authority will also upgrade the facility’s sewer system, an approximately $150,000 project.
“You can’t ask for anything better as a corporate citizen than SDI,” Sanders said. “.. (The investment) increases our tax revenue, it’s giving us 45 more jobs, it’s value added to their project, to their production. … It makes them a better industry here.”
Additionally, Higgins said the state provided two grants totaling about $3.3 million to cover rail and paving costs associated with the project.
Higgins said the company will enter into a new fee-in-lieu agreement with Lowndes County, which will allow the company to pay taxes on one-third of the new facility’s assessed value rather than the full ad valorem rate. The agreement lasts 30 years, Higgins said, but new equipment and machinery can only reap the benefits for 10 years.
He estimated even with the agreement, the county would reap $456,000 in taxes and Lowndes County School District $560,000 in taxes the first year.
“Even with the fee-in-lieu, SDI’s going to pay the city and the county over $1 million in … taxes a year,” Higgins said.
SDI’s local impact
Steel Dynamics is one of the largest steel producers and metal recyclers in the United States, based on estimated steelmaking and metals recycling capability, with annual sales of $8.8 billion in 2014, more than 7,700 employees and manufacturing facilities that include steel mills, steel coating facilities, iron production facilities, metals recycling locations and steel fabrication plants throughout the United States and Mexico.
The plant in Lowndes County currently employs 740 workers.
The plant’s new galvanizing line will unroll coils of commodity steel and coat them in a protective coating of zinc, which adds value to the steel, Higgins said. The line will be constructed over the next two years and is expected to begin operations in mid-year 2020, the press release said.
Higgins did not say how much the 45 planned jobs would pay, but he said if they’re comparable to what other employees at the plant make, they will likely be in excess of $100,000 per year.
He added the line may create more than 45 jobs.
“Good companies always, always under-promise and over-deliver,” Higgins said. “When we did the paint line, they said they were going to create 45 to 50 jobs. All said and done, they did 140.
“There’s no guarantee they’ll do that this time, but I’m not worried at all that they’re not going to create 45 jobs,” he added.
Higgins said projects such as the planned galvanizing line and last year’s paint line only add further value to the commodity steel already produced at the site. Moreover, he said, they’re only the latest expansions in a steel mill that keeps bringing further investments to Lowndes County.
When the steel mill first located at the site in 2005, Higgins said, he expected a $650 million investment. With SDI’s expansions, it has since become closer to a total of $2 billion.
“This is a mega industry on a mega site,” Higgins said. “I will tell you this, the day that SDI bought that mill was a bright day for Lowndes County. … (SDI) had a vision for Columbus. They’re a major producer of steel in the county and they have made a commitment to us. When you have these big companies that continue to make ungodly reinvestments and investments in their facilities, it gives you a good feeling that they’re probably not going to be picking up and moving tomorrow.”