Big River Steel Announces $1.1B Mill for Osceola, Will Employ 525

by Mark Carter and Lance Turner  on Tuesday, Jan. 29, 2013 11:03 am  

Big River Steel LLC and Gov. Mike Beebe announced plans Tuesday for the company to build a $1.1 billion steel mill in Osceola (Mississippi County) that will directly employ 525 people with annual average compensation of $75,000 a year.

The project will employ another 2,000 people while under construction, the governor said. When completed, Big River will produce steel for the automotive, oil and gas and electrical energy industries. Customers of the steel will include Siemens, ABB and Emerson Electric.

The mill will produce flat roll steel and low alloy, high strength steel. The corporate headquarters will be in Osceola.

Big Steel CEO John Correnti of Blytheville, a former Nucor executive, said he hoped Little Rock's Welspun would become a customer as well. He said he likes to see the U.S. oil rig count go up because it means more pipe is needed, and more steel for those pipes.

(Video: Watch video of the news conference right here.)

Construction of the mill, which could begin as early as August, will take about 20 months. It will be located on 1,140 acres south of the city on Highway 198 adjacent to the Osceola city limits. The site, which has been considered for large manufacturing projects before, is bordered by the Mississippi River to the east and class 1 rail on the west side of the property. Interstate 55 is three miles to the west.

Correnti called the site "steel mill heaven," and said that average salaries could soon approach $100,000 after the plant opens. Beebe said the project will make Mississippi County the second largest steel producing county in the U.S. and believed it could make the First Congressional District the largest steel-producing district in the country.

Beebe has described the project as "one of the biggest" Arkansas has ever seen, and is luring the company to Arkansas in part with a previously-unused funding mechanism that would let the state borrow up to $235 million to help cover the company's start-up costs.

For the Big River project, the state plans to provide $125 million for start-up costs: a $50 million loan to the company, $50 million for site prep, $20 million for piling and $5 million for bond insurance.

Once Beebe refers the project to the legislative leaders, the Legislature will have 20 working days to conduct its own economic impact study. The plan will then enter the committee process. 

Other state incentives include:

  • sales tax refunds on building materials, taxable machinery and equipment used in the project;
  • a 4 percent income tax credit based on new payroll jobs for five years;
  • $10 million from the Governor's Quick Action Closing Fund;
  • $5 million from the Department of Workforce Services Trust Fund to be used for training;
  • an income tax credit for recycling equipment equal to 30 percent of eligible recycling costs that will include legislation that could extend the credit from three to 14 years;
  • and a sales tax exemption on utilities that will include legislation to fully exempt sales tax associated with the sale of natural gas and electricity.

Mississippi County is providing $12 million from a half-cent, industrial development sales tax to be used on infrastructure needs including gas and sewer lines and purchasing the land. The city of Osceola is pitching in $2 million.

 

 

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